By Bhanvi Satija
(Reuters) -Catalent’s shares shot up 12% on Monday as the contract drug manufacturer posted third-quarter results after a long delay caused by persistent production issues at its major facilities.
The company reported a larger-than-expected quarterly loss and cut its annual revenue forecast for the second time, but strength in its biologics unit drove quarterly sales past Wall Street estimates.
Catalent’s “results cleared an admittedly low bar”, Stephens analyst Jacob Johnson said in a note.
The company had delayed its quarterly results report thrice in less than a month, hit by production snags at three of its key facilities – Maryland, Brussels and Indiana, where it does fill-and-finish for Novo Nordisk’s obesity drug Wegovy.
The issues drove up expenses and further hampered the company’s cost-cutting efforts already under pressure from regulatory inspections and subsequent corrective actions.
Shares of the company have fallen nearly 40% since it first disclosed manufacturing issues in April.
On Monday, Catalent said it has observed productivity improvements at its Bloomington and Brussels plants since its last update in May.
“We currently see strong operational performance at the (Maryland) site following downtime at the end of the third quarter and beginning of the fourth quarter,” said CEO Alessandro Maselli, adding that improved financials will eventually follow.
Catalent reported a third-quarter loss of 9 cents per share, compared with Wall Street estimates for a loss of 3 cents, according to IBES data from Refinitiv.
The company will also amend its 2022 results filing with a $26 million deduction caused by a revenue recognition error at its Bloomington plant.
The contract drug manufacturer cut its fiscal 2024 revenue forecast to a range of $4.23 billion to $4.33 billion.
Quarterly sales fell 18.5% to $1.04 billion, but came in above estimates of $952.7 million.
(Reporting by Bhanvi Satija and Sriparna Roy in Bengaluru; Editing by Devika Syamnath)
