Hailshadow Catalent ( NYSE: CTLT ) rose 3.4% after Sarepeta's ( SRPT ) Duchenne muscular dystrophy treatment Elevidys received a label expansion. The gene therapy is now also approved for patients who are non-ambulatory .
"Most importantly, we believe this takes a binomial risk off the table (that Elevidys could be pulled from the market) and helps to firm up Catalent's downside valuation in the event that the Novo deal breaks," RBC analyst Sean Dodge wrote in a note on Thursday. "Given the relatively lower risk, we could see the current deal spread (as of today's close) tighten from ~16% closer to the $63.50 transaction price.
" The Sarepta ( SRPT ) news is important to Catalent ( CTLT ) investors because Elevidys represents a "significant" portion of CTLT's EBITDA, which RBC estimates to be 23% of the FY24 total at the midpoint of guidance. Sarepta jumped 35% on Friday. Based on the label expansion announced on Thursday, RBC assumes that SPRT contributes an incremental $20-$30 million EBITDA in FY25, or a total of $200-$220 million.
The Sarepta ( SRPT ) news comes after Catalent ( CTLT ) agreed to be acquired by Novo Holdings , the parent company of Danish drugmaker Novo Nordisk, for $16.5 billion in February. More on Catalent Catalent shareholders approve acquisition by Novo Holdings Catalent, Novo Nordisk receive FTC request for more information Seeking Alpha’s Quant Rating on Catalent Historical earnings data for Catalent Financial information for Catalent.
