Feb 5, 2024 - Business

Wegovy maker inks $16.5 billion deal to boost weight-loss drug supply

Illustration of a bathroom scale with a dollar sign formed by the indicator in the weight scale window.

Illustration: Aïda Amer/Axios

Novo Holdings, the parent company of Danish pharma giant Novo Nordisk, agreed to buy New Jersey-based contract manufacturer Catalent for around $16.5 billion in cash.

Why it matters: This deal is about boosting production of Wegovy, the anti-obesity drug whose demand has far outpaced supply.

  • Novo Nordisk also makes Ozempic, but hasn't run into the same capacity issues because U.S. regulators only have approved that drug for diabetes, whereas Wegovy can be prescribed for more general weight loss.

Details: The $63.50 per share purchase price represents a 16.5% premium to Friday's closing price, and a 39.1% premium to trading before Catalent's board announced a strategic review in late August.

  • Novo says has the support of activist investor Elliott Management, which took a 2% stake in Catalent last year.
  • As part of the deal, Novo Nordisk will buy three of Catalent's fill-finish sites from Novo Holdings for $11 billion.

Go deeper, per the WSJ: "The popularity of Wegovy has seen the company restrict supply while it scrambles to increase stocks. In recent months, it has outlined plans to invest more than $6 billion to increase capacity. Last month, Novo Nordisk began gradually increasing supplies of lower-dose strengths, having limited supply in the U.S. since May to safeguard access for current patients."

Go deeper