Catalent (NYSE: CTLT) gained in trading on Tuesday after the contract drug maker entered into a cooperation agreement with Elliott Investment Management. Elliott is one of the company’s largest investors and as a part of this agreement, it has agreed to “customary standstill, voting, confidentiality, and other provisions.”
Last month, the Wall Street Journal reported that Elliott had built up a significant stake in the company.
Along with the new agreement, Catalent has added four new independent directors, expanding its Board of Directors to 16 members. Catalent’s four new Board of Directors are Steven Barg, Frank D’Amelio, Stephanie Okey, and Michelle Ryan. The company also announced the formation of a new Strategic and Operational Review Committee “to conduct a review of the Company’s business, strategy and operations, as well as the Company’s capital-allocation priorities, in order to maximize the long-term value of the Company.”
Elliott Senior Portfolio Manager Marc Steinberg commented, “We believe the changes announced today – including the new additions to the Board, the appointment of John Greisch as Executive Chair, and the creation of a Strategic and Operational Review Committee with a clear mandate to maximize the long-term value of the Company – represent critical steps toward ensuring that Catalent reaches its full potential. We look forward to continuing our constructive work with Catalent’s Board and management.”
Catalent Results – Preliminary
The company has also announced its preliminary fiscal Q4 and FY23 results. Catalent’s fiscal Q4 net revenues declined by 17% year-over-year to $1.07 billion but ahead of Street estimates of $1.05 billion. The company’s adjusted earnings fell to $0.09 per diluted share in Q4 as compared to $1.08 in the same period last year and fell short of analysts’ estimates of $0.11 per share.
In FY24, Catalent has guided for revenues in the range of $4.3 billion to $4.5 billion while adjusted net income is projected to be between $113 million and $175 million.
The company also announced that it will file with the SEC a notification of late filing on Form 12b-25 as it requires additional time to file its annual 10-K filing.
Analysts remain sidelined about CTLT stock with a Hold consensus rating based on four Buys, seven Holds, and one Sell.
