Healthy Earnings: An enormous deal to spice up Novo Nordisk's production is nearing completion

Novo Nordisk has just moved one step closer to significantly improving supplies of its blockbuster weight-loss drug Wegovy and diabetes drug Ozempic.

The Danish drugmaker's parent company, Novo Holdings, received permit Last week, European antitrust regulators urged it to maneuver forward with its planned $16.5 billion takeover of U.S. drugmaker Catalent, a deal that had raised concerns amongst rival drugmakers and lawmakers alike.

That leaves the U.S. Federal Trade Commission as the ultimate hurdle Novo Holdings must overcome to solidify the colossal deal the corporate announced in February. Novo Holdings and Novo Nordisk said they expect the deal to shut by the tip of the month.

Catalent is a sexy takeover goal for Novo Holdings, which owns 77% of the voting shares in Novo Nordisk.

The deal could increase availability of the drugs as Catalent is the essential supplier of fill-finish work, which incorporates filling and packaging syringes and injection pens for Wegovy and Ozempic. Novo Holdings will immediately sell three Catalent sites to Novo Nordisk for $11 billion upon completion of the transaction, making the drugmaker higher prepared to fulfill increasing demand for its products.

“In the anti-obesity arms race, capacity continues to matter, and the completion of this deal could significantly accelerate Novo's ability to serve this growing market,” Evan Seigerman, an analyst at BMO Capital Markets, wrote in a note on Friday. “Novo emphasized last quarter that it continues to see no issues with patient demand and that for every dose discussed, capacity is the biggest bottleneck to growing its GLP-1 franchises.”

The European Commission, the chief arm of the European Union, explicitly stated that the transaction wouldn’t pose a big threat to competition. The commission said drug manufacturers continued to have access to several alternative manufacturers of prefilled syringes and orally disintegrating tablets.

“The transaction would not result in customers lacking alternative sources of supply to Catalent,” the Commission stressed, noting that “there is sufficient spare capacity on the market.”

Rival drugmakers have rejected the deal.

Earlier this 12 months Eli Lilly was the primary to indicate that there may very well be problems for the reason that company is a significant competitor to Novo Nordisk in the load loss drug space. In August, Eli Lilly CEO David Ricks also told analysts that the corporate relies on a Catalent site for some production, but that “it's more of an oddity that your main competitor is also your contract manufacturer, and how to resolve this situation.”

RocheThomas Schinecker, the company's top executive, also said in a media call in October that the Catalent deal would have no impact on the company but “could pose an issue for other smaller players.” He said it was “not a superb idea” to limit competition in the weight-loss drug space, which Roche wants to join.

Also in October, a coalition of more than ten labor unions, public interest organizations and consumer groups wrote a letter to FTC Commissioner Lina Khan urging her to “challenge this transaction” and ensure that “competition is protected and consumers.” have unrestricted access to treatment.” .”

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Nearly 80 Nobel laureates in chemistry, medicine, economics and physics signed a letter Monday urging the Senate to oppose the confirmation of Robert F. Kennedy Jr. as Health and Human Services secretary.

President-elect Donald Trump announced Kennedy as his HHS pick last month after saying in October that he would let him “go wild” on health care. Kennedy, who briefly ran as an independent candidate within the presidential election, has previously spread misinformation and conspiracy theories on topics resembling… VaccinationsCovid-19 and autism, amongst others.

If the Senate confirms Kennedy as head of HHS, he can be answerable for managing the Food and Drug Administration, the Centers for Disease Control and Prevention, the Medicare and Medicaid insurance programs and the National Institutes of Health.

In the letter, obtained by CNBC on Monday, the Nobel laureates said they “strongly urge” senators to vote against Kennedy's nomination. The New York Times first reported the letter.

“In addition to his lack of qualifications or relevant experience in medicine, science, public health, or administration, Mr. Kennedy has been an opponent of many health-protecting and life-saving vaccines,” the letter said.

“Given his record, placing Mr. Kennedy at the helm of DHHS would endanger public health and undermine America's global leadership in the health sciences in both the public and commercial sectors,” it said.

The letter's signatories include 31 Nobel Prize winners in medicine, 18 in physics, 17 in chemistry and 11 in economics. Victor Ambros and Gary Ruvkun, who won the Medicine Prize this 12 months for his or her ​​Discovery of microRNAsigned the letter. Daron Acemoglu and Simon Johnson, who won this 12 months's economics prize for his or her work on How Institutions affect the prosperity of countries also signed the letter.

Here is the total text:

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