The PharmSource Blog by Jim Miller

Now that it has announced its new name, what should we expect next from Catalent Pharma Solutions, formerly known as Cardinal Health Pharmaceutical Technologies and Services?

Initial indications are that the new owner, the Blackstone Group, is looking for opportunities to pare down costs by reducing staff and shedding some facilities. This is consistent with the way private equity firms operate, and Catalent appears to offer ample opportunities for improved efficiency: with revenues of $1.7 billion, 35 sites and 10,000 employees, its sales of $170,000 per employee and $49 million per facility are on the low side.

We have heard from multiple sources that the company has put its Albuquerque, New Mexico, sterile manufacturing facility up for sale. The Albuquerque site, the former SP Pharma facility that Cardinal Health acquired in 2001, has suffered a number of regulatory and operating problems over the years, despite substantial investment in new lyophilization units and filling lines. According to mid-June reports in the Albuquerque media, the company recently laid off 100 people at the facility because of a decline in orders and said it was paring back operations from 7 days to 5 days.

Catalent has two brand new sterile manufacturing operations - one in Raleigh, North Carolina, with large scale lyophilization capability and the other in Brussels, Belgium, specializing in prefilled syringes - where it is focusing its new business development efforts.

In a number of its businesses, Catalent faces the prospect of making significant investments to build a more significant market position and greater financial contribution; where it chooses not to make those investments, divestiture would be a natural consequence. We speculate that candidates in that category might include the biomanufacturing business, formerly known as Gala Design; clinical supplies; and the analytical operations formerly known as Magellan Laboratories.