• Q2'24 net revenue of $1.03 billion decreased 10% as reported, or 11% in constant currency⁽¹⁾, compared to Q2'23.

• Q2'24 net revenue, excluding COVID-related revenue of ~$260 million in Q2’23 and ~$75 million in Q2’24, increased 8% compared to Q2'23.

• Q2'24 net loss of $(204) million compared to $81 million of net income in Q2'23 due primarily to a decline in COVID-related demand.

• Q2'24 Adjusted EBITDA⁽¹⁾ of $124 million decreased 56% as reported, or 57% in constant currency, compared to Q2'23.

• Raised $600 million in term loans and used proceeds to pay down revolver; ~$1.3 billion in total available liquidity as of December 31, 2023.

• Announced on February 5, 2024 that Novo Holdings will acquire Catalent in an all-cash transaction that values Catalent at $16.5 billion on an enterprise value basis.

“I am proud of the progress the Catalent team made in our second quarter and our ongoing momentum, including strong non-COVID sequential revenue growth in both the Biologics and PCH segments. We also continued to invest in our operational improvement initiatives and areas of high growth,” said Alessandro Maselli, President and Chief Executive Officer of Catalent, Inc. “Our commitment to providing customers with premium development and manufacturing solutions is our north star and our recently announced transaction with Novo Holdings is further proof of that. With the benefit of Novo Holdings’ expanded resources, we will be able to accelerate investment in our business and enhance key offerings for current and prospective pharma and biotech customers. Indeed, we remain focused on continuing to serve our valued customers, as we always have.”

Catalent, a leading provider of advanced delivery technologies, development, and manufacturing solutions for drugs, biologics, cell and gene therapies, and consumer health products, has released its consolidated financial results for the second quarter of 2024. The company reported a net revenue of $1.03 billion, indicating a 10% decrease compared to the same period last year. This decline, amounting to 11% in constant currency, is primarily attributed to decreased demand for COVID-19 related programs. Organic net revenue also experienced an 11% decrease over the same period, excluding the effects of acquisitions, divestitures, and currency translation.

Shift in Financials

The company reported a net loss of $(204) million, translating to $(1.12) per basic and diluted share, in contrast to net earnings of $81 million, or $0.45 per basic and $0.44 per diluted share, in the second quarter of the previous year. EBITDA from operations showed a significant decrease of $258 million, standing at $6 million compared to $264 million reported a year ago. Adjusted EBITDA for the second quarter of fiscal 2024 was $124 million, or 12.0% of net revenue, marking a 56% decrease as reported and a 57% decrease on a constant-currency basis compared to the same period in fiscal 2023.

Segment Performance Analysis

In the Biologics segment, net revenue amounted to $446 million, showing a 24% decrease from the previous year, while Segment EBITDA decreased by 79%. Similarly, in the Pharma and Consumer Health segment, net revenue reached $587 million, marking a 1% increase, with Segment EBITDA decreasing by 9%.

Balance Sheet and Liquidity

During the quarter, Catalent issued a new $600 million term loan, utilizing the proceeds to repay outstanding borrowings under its revolving credit facility, resulting in total available liquidity of approximately $1.3 billion as of December 31, 2023. The company's total debt stood at $5.01 billion, with a net debt of $4.78 billion, compared to $4.74 billion in total net debt as of September 30, 2023. Catalent's net leverage ratio as of December 31, 2023, was 10.3x, up from 7.6x at September 30, 2023, and 3.8x as of December 31, 2022.

Merger Agreement with Novo Holdings

Catalent recently announced a merger agreement with Novo Holdings A/S, valued at $16.5 billion on an enterprise value basis. Subject to customary closing conditions, including approval by Catalent stockholders and regulatory approvals, the transaction is expected to close towards the end of calendar year 2024. Consequently, Catalent will not host an earnings conference call or provide forward-looking guidance during the pendency of this transaction.