Catalent Drops on Warning Productivity Issues Will Hurt Sales
Shares of Catalent (CTLT:US) are trading more than 25% lower on Friday after the drug manufacturing company warned that investors should expect lower FQ3 revenue figures.
Due to “productivity issues and higher-than-expected costs” at the three facilities, of which two are Catalent’s largest, the company disclosed material impact to its FQ3 and full-year numbers.
Moreover, the CTLT stock was further hit by the news that CFO Thomas Castellano left the company, effective immediately. He will be replaced by Ricky Hopson, who had been serving as the Company’s President, Division Head for Clinical Development & Supply.
“Ricky is an experienced financial executive who deeply understands Catalent and can successfully lead our financial function through this interim period until we identify a new, permanent CFO,” said Alessandro Maselli, President and Chief Executive Officer.
The ramp at Catalent’s BWI facility was “slower than expected” due to “certain operational challenges.” As a result, revenues from this plant are expected to be “significantly reduced” for FQ3 and FQ4, Catalent said.
“The Company expects to recover related revenue in the second half of calendar year 2023 (the first half of the Company’s 2024 fiscal year),” the company added in a press release.
As a result, Catalent implemented a number of “management and operational changes” to tackle issues at three production facilities.
Catalent shares have enjoyed a strong start to the year. Congress members Ro Khanna, Susie Lee and Kurt Schrader were all trading the stock in the last 12 months.
Earlier this week, Rep. Khanna disclosed that he sold some Catalent shares at the end of March 2023, therefore avoiding a more than 20% drop in the share price, which threatens to single-handedly erase almost all YTD gains.
