Roche comes out against allowing takeover of drug manufacturer Catalent

By Ludwig Burger

FRANKFURT (Reuters) -The CEO of pharmaceuticals giant Roche has urged authorities to block the takeover of contract drug manufacturer Catalent (NYSE:) by Novo Nordisk (NYSE:)’s controlling shareholder, citing harm to industry peers.

Though it stressed on Wednesday it was not itself affected, Roche is among the first drugmakers to voice opposition to the transaction with potentially wide-ranging repercussions in the booming obesity-drug industry segment.

“Limiting the competition in this space is not a good idea,” Roche’s CEO Thomas Schinecker said in a media call. “From an industry perspective, it would be a wrong decision by authorities,” he said.

“It could be a problem for other smaller players, if there is a restriction in how many (contract manufacturers) are available,” he told journalists, speaking after the release of quarterly sales on Wednesday.

The company said it would not comment further on any interactions with competition authorities.

Last week, an alliance of U.S. consumer, patient and workers advocacy groups petitioned the U.S. Federal Trade Commission to block Novo Holdings, which controls Novo Nordisk, from acquiring Catalent, saying the deal threatened competition in weight loss drugs and gene therapies.

Executives at Eli Lilly (NYSE:), Novo’s main rival in the obesity and diabetes drug market, have repeatedly voiced concerns over the transaction, which will also see Novo Nordisk take direct ownership of three Catalent sites where injection pens are filled in Italy, Belgium and the United States.

The advocacy groups said at the time that the deal could constrain competitors such as Amgen (NASDAQ:), Pfizer (NYSE:), Roche and AstraZeneca (NASDAQ:), which are reportedly developing their own obesity drugs, some of which are based on difficult-to-make peptides.

Viking Therapeutics (NASDAQ:), Structure Therapeutics and Sun Pharma could also be affected, the advocacy groups said.

Novo Nordisk, Novo Holdings and Catalent did not immediately respond to a request for comment.

Novo Holdings has said it believes in a “pro-competitive rationale” for the transaction.

The head of Roche’s pharmaceutical division, Teresa Graham, underscored on Wednesday that Roche itself was not impacted: “We are quite confident in the capacity we have. We have reserved capacity with other CMOs (contract manufacturing organisations).”

When asked last week to comment on scrutiny of the Catalant deal, Roche said it would use both in-house and external manufacturing for future commercial production of its obesity drugs.