The addition of Paragon Bioservices places biomanufacturing at around 31% of Catalent’s business mix. The CDMO expects it to be “north of 40%” by 2024 as high demand continues.
Catalent reported revenues of $617.5 million (€552 million) for its third quarter FY2019 revenues, a slightly down on the same period last year.
Traditionally a small molecule encapsulating contract development and manufacturing organization (CDMO), the firm’s Softgel Technologies segment dropped 6% year-on-year to $214.5 million. However, business was buoyed by its Oral Drug Delivery unit – thanks, in part, to the acquisition of Juniper Pharmaceuticals last year – and, more relevantly, its Biologics and Specialty Drug Delivery segment that brought in $172 million, up 4% year-on-year.
Catalent has been growing and investing in its biologics manufacturing business over the past decade; opening a single-use site in Madison, Wisconsin in 2013, and acquiring Cook Pharmica in 2017. Most recently, the CDMO announced plans to buy Paragon Bioservices for $1.2 billion in a deal expected to close in the next few weeks.
Once the deal closes, Catalent’s biologics business will jump from roughly 26% of its total business to 31%, and as customer demand in the space grows and new capabilities come online, this will continue rising.
“We actually show biologics approaching near 50% of the overall revenues of the company over a 5-year strat plan,” said CEO John Chiminski on a financial call.
“Look at the investments that we’re making in Bloomington [Indiana] and Madison that are essentially going to double their capacity, and then you layer on top of that the aggressive growth and capacity expansions that we’re going to have from Paragon.”
According to Chiminski, Paragon will grow its business from 2018 to 2019 from $100 million to $200 million, and while it will not double every year, he expects continued high growth in the viral vector space Paragon serves.
“[The biologics contribution] certainly will be north of 40% given the fact that we’re already sitting at 31%. And by the way, that’s not at the expense of the other business units. It’s just it’s growing at a much faster clip than the core business.”