Catalent(US:CTLT)2023-11-15 21:39Financial Data and Key Metrics Changes - Net revenue for Q1 2024 was $982 million, down 4% on a reported basis and 6% on a constant currency basis compared to the prior year, primarily due to a significant reduction in COVID-related revenue of approximately $85 million [18] - Adjusted net loss was $19 million or a loss of $0.10 per diluted share compared to adjusted net income of $61 million or $0.34 per diluted share last year [19] - Adjusted EBITDA decreased 38% to $115 million, with a margin of 11.7% compared to 18.3% in the prior year quarter [39] Business Line Data and Key Metrics Changes - Biologics segment net revenue was $447 million, a 16% decrease year-over-year, primarily driven by lower COVID demand [40] - Non-COVID Biologics revenue growth was approximately 11% when excluding a one-time $30 million licensing fee from the prior year [40] - Pharma and Consumer Health segment generated net revenue of $535 million, an increase of 5% compared to the prior year, driven by the acquisition of Metrics [23] Market Data and Key Metrics Changes - The company expects non-COVID non-Sarepta Biologics business to grow in the low- to mid-teens in fiscal '24, driven by GLP-1 production and improved productivity [22] - The company anticipates that GLP-1 programs will contribute less than $100 million in fiscal '24, with expectations of over $0.5 billion in revenue once all lines are operational [36] Company Strategy and Development Direction - The company is focused on improving operational performance and margin recovery to pre-COVID levels while expanding its presence in high-demand areas such as gene therapy and GLP-1 production [15][27] - A strategic review committee has been formed to evaluate options for maximizing long-term value creation for shareholders [29][90] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing macro headwinds but expressed confidence in achieving mid to high teens revenue growth excluding COVID-related revenue [10] - The company is optimistic about the future, citing strong demand for gene therapy services and a healthy pipeline of late-stage programs [12][15] Other Important Information - The company is working to finalize its SEC filings for fiscal 2023 and Q1 2024, with expectations to file by the end of November [38] - The company reported a goodwill impairment of approximately $700 million related to acquisitions in its Consumer Health and Biologics segments [17] Q&A Session Summary Question: Implications of Sarepta's label expansion on FY '24 guidance - Management noted positive momentum in the relationship with Sarepta and emphasized the importance of operational performance in meeting demand [50][51] Question: Sequential growth in Biologics revenue - Management clarified that the sequential decline was influenced by capacity utilization and noted improvements in the BWI gene therapy business [52][53] Question: Gene therapy franchise size and other programs - Management highlighted a balanced portfolio in gene therapy and noted good momentum in drug substance programs [54][55] Question: Strategic review timeline - Management indicated that the review is thorough and aims to address capital structure improvements with a sense of urgency [90][91] Question: Returns on GLP-1 prefilled syringe capacity - Management refrained from disclosing specific returns but indicated that the investment would be attractive for the company [92][94]