In a recent press call, Roche CEO Thomas Schinecker expressed opposition to the proposed acquisition of Catalent by Novo Holdings, the controlling shareholder of Novo Nordisk. Schinecker emphasized that the deal could have a negative impact on competition in the market for weight loss drugs, especially those based on the gut hormone GLP-1.
Roche, a major player in the pharmaceutical industry, is not directly affected by the deal but was one of the first to raise concerns about its potential impact.
“It’s not a good idea to limit competition in this space,” Schinecker said, highlighting the potential problems small businesses could face if the number of contract manufacturers declines. He added: “From an industry perspective, this would be a bad decision by the authorities.”
The acquisition was also criticized by a coalition of American consumer, patient and worker advocacy groups, which last week petitioned the Federal Trade Commission (FTC) to block the deal. They argue it could limit competition in the weight loss drug and gene therapy markets.
Eli Lilly, Novo Nordisk’s main competitor in the obesity and diabetes drug market, also expressed concerns. It was particularly concerned that Novo Nordisk would directly own three of Catalent’s sites involved in filling injection pens.
Rights groups have raised concerns that the acquisition could impact competitors including Amgen, Pfizer (NYSE:), Roche, AstraZeneca, Viking Therapeutics, Structure Therapeutics and Sun Pharma. These companies are said to be developing their own obesity treatments, some of which are based on complex peptides.
In response to these concerns, Catalent said it believed the deal was pro-competitive and noted that it was not aware of any competing GLP-1 products being manufactured for commercial sale at the three sites. Catalent also said it plans to continue working with European and U.S. regulators and expects the deal to close by the end of 2024.
Roche’s head of pharmaceuticals, Teresa Graham, confirmed that Roche’s capacity is secured with other contract manufacturing organizations (CMOs), indicating that the company is not dependent on Catalent to produce its obesity treatment. Roche also noted that it will utilize both internal and external manufacturing for the commercial production of its obesity treatment in the future.
Neither Novo Nordisk nor Novo Holdings responded to requests for comment on the latest objections, although Novo Holdings previously said there were “pro-competitive grounds” for the acquisition.
It’s worth noting that other pharmaceutical giants, such as Pfizer and Boehringer Ingelheim, also own contract manufacturing businesses that provide services to their competitors.
InvestingPro Insights
As the pharmaceutical industry grapples with the potential impact of Novo Holdings’ acquisition of Catalent, it is worth taking a look at the financial health and market position of Eli Lilly (LLY), a key company mentioned in the article and Novo Nordisk’s main competitor in the obesity and diabetes drug market. There is.
According to InvestingPro data, Eli Lilly boasts a significant market capitalization of $812.86 billion, demonstrating its significant presence in the pharmaceutical sector. The company’s revenue growth has been impressive, up 31.87% over the last 12 months as of Q2 2024, with an even stronger growth of 35.98% in the most recent quarter. This strong growth is consistent with the company’s position as a major competitor in the lucrative weight loss drug market.
InvestingPro tips highlight that Eli Lilly is a major player in the pharmaceutical industry, which is especially relevant given the current discussion about market competition. The company’s strong financial performance is further evidenced by its strong returns over the past year and decade, demonstrating its track record of delivering value to shareholders.
However, investors should note that Eli Lilly is trading with a high P/E ratio of 110.83. This assessment may reflect market expectations for continued growth in the obesity and diabetes drug markets, in which Eli Lilly actively competes.
For those interested in a more in-depth analysis of Eli Lilly’s financial health and market position, InvestingPro offers 18 additional tips to provide you with a comprehensive view of your company’s strengths and potential challenges in this competitive environment.
Reuters contributed to this article.
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