(Reuters) -Catalent Inc expects to cut by more than $400 million both its full-year revenue and core profit forecasts, the contract drug manufacturer said on Monday, sending its shares tumbling 27% to a three-year low.
The announcement came just a day ahead of third-quarter results, which have been pushed to May 15 to allow the company to make some adjustments to financial statements related to its operations in Bloomington, Indiana.
In April, Catalent had flagged productivity issues and warned that a slower-than-expected ramp up in production capacity would hit quarterly results.
The company, with clients including Moderna Inc and Johnson & Johnson, also estimated a goodwill impairment charge of more than $200 million in its consumer health business, primarily related to its purchase of Bettera Wellness.
Catalent had been the sole contract manufacturer for Novo Nordisk’s weight-loss drug Wegovy, but the Danish company last month unveiled a second contract manufacturer to help meet sky-rocketing demand.
“We are confident that our recent operational challenges are temporary and addressable, and we are working intensively to return to our historic productivity levels,” Catalent CEO Alessandro Maselli said in a statement.
Catalent in February forecast full-year net revenue of $4.63 billion to $4.88 billion and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $1.22 billion to $1.30 billion.
William Blair analyst Max Smock on Monday identified some key risks in the next three to five years for Catalent, including quality assurance problems identified by regulators that can cause delays and potentially harm the company’s reputation with other clients.
(Reporting by Sriparna Roy in Bengaluru; Editing by Savio D’Souza and Sriraj Kalluvila)
