Catalent shows willing to up spending in CGT space

Catalent’s Q3 results revealed the demand for its CGT services means it is willing to increase its investments in the sector.

Contract development manufacturing organization (CDMO) Catalent revealed plans in September 2020 to invest $130 million at its gene therapy campus in Harmans, Maryland to add five additional Phase III through to commercial-scale manufacturing suites.

Last week, the firm said it would shell out a further $230 million at the same site to construct three additional multi-room commercial suites.

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While John Chiminiski CEO of Catalent told shareholders during its Q3 fiscal year 2021 report that the increased costs of $360 million “is already factored into our initial fiscal 2022 capex plans,” chief financial officer Thomas Castellano explained why.

“To answer on the increase in costs, I would say we certainly improve[d] the layout of the suites which have substantially increased the cost of it, but also have given us more and more flexibility in being able to meet the needs of our customers,” said Castellano.

“I’d also say that there are additional investments related to warehouses, to parking garages, and things that we need to be able to make sure we can keep up with the pace of growth and hiring that’s going to be needed at the site that’s also contemplated in that investment.”

CGT drive

Catalent began its journey in the advanced therapy sector in May 2019 through the acquisition of gene therapy CDMO Paragon Bioservices for $1.2 billion and has since made further purchases.

These include, the acquisition of two viral facilities from Novavax, acquiring Delphi Genetics in February 2021 to launch plasmid DNA (pDNA) manufacturing capabilities to its service offerings, and buying RheinCell Therapeutics in June.

Chiminski said Catalent’s decision to continue to invest in the gene therapy sector is the demand it sees for its own service offerings.

“If we just take a look at the overall pipeline, there is more than 300 new gene therapy assets that entered into the pipeline in 2021, and we see that pipeline growing from about 900 assets to about 2,900 assets if you were to go all the way out to 2027 with the kind of work that we do and understanding the overall pipeline. We feel really good about these investments and clearly, it’s going to make us a leader in the overall gene therapy development and manufacturing area.”