The temperature is heating up around Novo Holdings’ acquisition of contract manufacturer Catalent, as consumer and union groups write to the Federal Trade Commission to “challenge” the deal, with a second letter in a week calling for the acquisition to be blocked.
Around 10 consumer groups and two labor unions wrote to FTC’s Chair Lina Khan warning the deal will affect competition for weight loss and cell and gene therapy drugs.
“We believe this transaction, if consummated, would be harmful to competition across various therapeutic areas and ultimately reduce patients’ access to these vital treatments,” the letter dated Thursday and addressed from former FTC leader and attorney David Balto says.
The acquisition will see Novo Holdings buy Catalent for $16.5 billion, and then sell three of Catalent’s sites to Novo Nordisk for $11 billion. Catalent is a large CDMO with over 50 facilities, and has been making GLP-1s since 2017. It is one of few manufacturers with the “specialized” capabilities needed to manufacture GLP-1s, the letter states.
If the FTC greenlights the acquisition, it will remove Catalent as an option for other companies with GLP-1 assets. Pharma companies like Amgen, AstraZeneca, Pfizer, Roche, Structure Therapeutics, Sun Pharma and Viking Therapeutics all have GLP-1 assets in their pipeline.
Not only will the deal impact GLP-1 drug development, but other assets like cell and gene therapies are also made at Catalent’s sites, including Sarepta’s Elevidys and Novartis’ Zolgensma.
The letter goes on to warn Catalent is likely to prioritize Novo’s drugs and could charge higher prices and provide worse customer service to Novo’s competitors — Eli Lilly has already voiced its concerns over the deal.
Further, the acquisition will allow Novo Nordisk to be privy to competitors’ manufacturing processes, a concern also voiced by Sen. Elizabeth Warren (D-MA).
Last week, Warren wrote to the FTC seeking more scrutiny of the acquisition, arguing the deal will give Novo an unfair advantage in the GLP-1 market. Further, the FTC has already requested further information at least twice, in May and in April, on the Novo-Catalent deal, pushing back its decision deadline a month at a time.
“In our view, there is no adequate remedy that resolves the competition concerns raised by this transaction,” the latest letter concludes. It lists the following organizations as signers: American Federation of State, County and Municipal Employees (AFSCME), Beta Cell Action, Consumer Action, Doctors for America, Service Employees International Union, Social Security Works, US Public Interest Research Group, Citizen Action/Illinois, Generation Patient, Health Care Voices, Popular Democracy and Salud y Farmacos, US.