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Catalent (CTLT) Expands Presence in Japan Via New Facility

·3-min read

Catalent, Inc. CTLT recently announced the opening of its new clinical supply facility in the Shiga prefecture of Japan. The facility has been inaugurated in the aforementioned strategic location to meet the growing demand for end-to-end services, including primary packaging and white glove services.

For investors’ note, the Shiga site was acquired from Teva-Takeda Pharmaceuticals in July 2020 and has been significantly revamped to optimize Catalent’s service offerings.

The latest site addition is expected to solidify Catalent’s foothold in the Clinical Supply Services space.

Significance of the Latest Site

The latest Shiga site is expected to offer flexible clinical supply solutions, serving local and global biotech and pharmaceutical companies. The facility, one of the largest of its kind in Japan, is likely to play a crucial role in expanding Catalent’s Asia-Pacific network. Further, the site is anticipated to work alongside two locations in China and one in Singapore to ensure better clinical trials for customers throughout the region.

Per management, the new site builds upon decades of Catalent’s in-country presence. In addition to bi-lingual English and Japanese projects and clinical supply management, the site is likely to offer primary and secondary packaging and labeling, storage and distribution, cold chain handling, and in-country returns and destruction services. The site will also likely add specialized solutions for Asia-Pacific markets like Catalent’s FastChain demand-led supply, white-glove handling and logistics.

Industry Prospects

Per a report by MarketsandMarkets, the global clinical trial supplies market is anticipated to reach $2.9 billion by 2026 from $1.9 billion in 2021, at a CAGR of 8.5%. Factors like rising research and development expenditure in pharmaceutical and biopharmaceutical companies and the increasing number of clinical trials worldwide are likely to drive the market.

Given the market potential, the latest site addition will likely provide a significant impetus to Catalent’s global Clinical Supply Services business.

Notable Developments

Of late, Catalent has witnessed a few notable developments across its business.

In September, the company signed a commercial supply agreement with Phathom Pharmaceuticals for its lead compound, vonoprazan — a novel, orally active-potassium competitive acid blocker (P-CAB).

Catalent, in August, reached an agreement to acquire Bettera Holdings, LLC, which will complement and accelerate growth of its global softgel and oral dose formulation and manufacturing business.

In the same month, the company signed a commercial supply agreement with Edenbridge Pharmaceuticals, LLC, for a novel formulation of glycopyrrolate using its proprietary Zydis orally disintegrating tablet delivery technology for use as adjunctive therapy to treat peptic ulcers. The FDA’s approval for the Zydis formulation of glycopyrrolate is currently pending and is expected in December 2021.

Price Performance

Shares of the company have gained 38.7% in the past year versus the industry’s 20.2% fall and the S&P 500's 27.2% rise.

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Zacks Rank & Key Picks

Currently, Catalent carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are DexCom, Inc. DXCM, Omnicell, Inc. OMCL and West Pharmaceutical Services, Inc. WST.

DexCom’s long-term earnings growth rate is estimated at 15.3%. The company presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Omnicell’s long-term earnings growth rate is estimated at 16%. It currently holds a Zacks Rank #2.

West Pharmaceutical’s long-term earnings growth rate is estimated at 27.3%. It currently carries a Zacks Rank #2.

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Catalent, Inc. (CTLT) : Free Stock Analysis Report

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