As Novo Holdings hopes to close its $16.5 billion acquisition of CDMO Catalent by the end of the year, the deal is facing a fresh round of lawmaker scrutiny.
Wednesday, Sen. Elizabeth Warren, D-Massachusetts, sent a letter (PDF) to the chair of the U.S. Federal Trade Commission (FTC), Lina Khan, calling on the antitrust agency to “carefully scrutinize” the multibillion-dollar merger—and to block it if necessary under U.S. competition laws.
“I am concerned that this deal could increase Novo Nordisk’s dominance over vital GLP-1 inhibitor drugs, reducing competition and increasing prices for patients,” Warren wrote.
Warren’s concerns come about eight months after Novo Holdings launched its $16.5 billion offer for Catalent in early February.
Novo Holdings acts as a holding company for Novo Nordisk, the Danish pharma responsible for the immensely popular GLP-1 drugs Ozempic and Wegovy. Under the proposed deal, Novo Nordisk—which has struggled to maintain consistent supplies of its semaglutide-based meds—is set to acquire three Catalent fill-finish sites through an $11 billion upfront purchase from Novo Holdings.
As it stands, Novo Nordisk controls a 55% share of the Type 2 diabetes and obesity market, primarily through its GLP-1s Ozempic and Wegovy, and the Danish company already relies on Catalent to help fill and package syringes and injection pens for its meds, Warren said.
Novo’s chief metabolic rival, Eli Lilly, which markets counterparts to Ozempic and Wegovy in Mounjaro and Zepbound, also depends upon Catalent’s services, Warren noted.
Warren went on to voice concerns that Novo Holdings’ Catalent merger could grant Novo Nordisk “unprecedented visibility into and control over its competitor’s production capacity, costs, and business practices.” She also stressed that Novo could potentially hinder Lilly’s use of Catalent to produce its own GLP-1 drugs should the deal go through.
The potential for the deal to limit competition could further exacerbate an “affordability crisis,” putting GLP-1s out of reach for many people living in the U.S., the senator added.
Late last month, Warren joined several other lawmakers urging the secretary of the Department of Health and Human Services, Xavier Becerra, to use the agency’s authority to distribute licenses to generic semaglutide makers in an effort to promote competition and bring down costs.
Warren’s letter to the FTC makes a “compelling case” around issues of access and competition, David Balto, former FTC policy director and current Washington, D.C.-based antitrust lawyer, told Fierce Pharma over email.
“This is a textbook case of an illegal vertical merger,” he said. “Senator Warren's letter will make this investigation a key priority for the FTC.”
Balto is currently representing consumer groups that oppose the Novo-Catalent merger.
Naturally, Novo Nordisk sees things differently.
In an emailed statement regarding Warren’s letter, a Novo Nordisk spokesperson stressed that it is indeed Novo Holdings, not Novo Nordisk itself, that is pursuing the Catalent acquisition.
“As previously stated, Novo Nordisk will honor all existing contracts at the Catalent sites,” the spokesperson said. “We are not aware of any competitive GLP-1 products being manufactured for commercial sale at the three sites that Novo Nordisk is planning to acquire. In particular, Catalent has no role in the manufacturing of Zepbound and Mounjaro, two of Eli Lilly’s GLP-1s.”
While Novo Holdings hopes the Catalent acquisition could close before the end of 2024, the deal has faced several delays already.
Following “informal discussions with FTC staff,” Novo Holdings’ parent company, the Novo Nordisk Foundation, elected in April to resubmit its application for the merger, triggering a 30-day waiting period during which the FTC was tasked with reviewing the forms.
Then, in early May, Catalent and the Novo Nordisk Foundation received a request from the FTC for additional documents and information on the transaction, triggering another delay. At the time, the companies said they were working to satisfy the FTC’s request “as expeditiously as possible.”
Novo Nordisk’s spokesperson confirmed Thursday that it's still expecting the deal to go through “toward the end of the calendar year.”