The potential effects of Novo’s acquisition of Catalent on Bloomington employees

Bloomington, Indiana – Employees at Catalent, a pharmaceutical contract maker and one of Bloomington’s biggest employers, are “sick” of the company after years of layoffs and claimed poor management. Employees are hoping for change as decisions about Novo Holdings’ acquisition of the business draw closer.

Although Catalent insists it expects the $16.5 billion merger to finish before the year ends, it is unclear if it will be approved by regulators. Many employees of the plant are in limbo, getting ready for any scenario.

When asked how many employees it employs in Bloomington, Catalent remained silent. The site employs around 2,400 people, according to an undated letter from the general manager.

The Federal Trade Commission, competitors, and consumer watchdogs have all expressed concern about the purchase by the Danish holding company, which owns the pharmaceutical behemoth Novo Nordisk. Both the European Commission and the FTC must approve it. The FTC’s decision regarding Novo Holdings’ takeover is uncertain, and the latter is expected to make a decision by December 6.

Four Catalent employees who were given anonymity to openly voice their worries about the company and the takeover in order to prevent reprisals were interviewed by the Indiana Daily Student. Everybody hopes the coup will succeed.

This is a result of their jobs’ insecurity and a perception of poor management during the previous few years. In previous years, the corporation has laid off hundreds of workers; in March, it lost 130 positions. Employees reported a persistent drop in morale.

When questioned about claims of poor management, a Catalent representative issued a statement saying, “We continue to expect to close our pending transaction with Novo Holdings toward the end of the calendar year 2024 and look forward to the significant benefits the proposed transaction is expected to deliver for our employees, our customers, and patients.”

However, workers at the Bloomington facility are still feeling the effects of the deal’s uncertainty. According to workers, Novo is a better place to work, and they hope that the Bloomington facility will experience a change in culture.

Naturally, a transition period will follow the acquisition, requiring a substantial amount of work to move Novo technology and goods on-site. Employees, however, are optimistic that it will eventually bring to a better workplace culture and overall experience.

For Catalent employees, if the purchase is blocked and the deal falls through, it’s a mirror image. Workers anticipate a potential employee exodus to other nearby pharmaceutical enterprises.
According to one former worker, a large portion of the company’s best personnel has already departed. Low procedural standards, incompetent leadership, and an increase in unqualified hiring were cited as the reasons for their resignation.

In February, the FDA discovered a “pest” on the production line at Catalent’s Bloomington facility, among other quality control violations. Regulators discovered further flaws in other processes, such as those intended to keep sterile materials from becoming contaminated.

In 2021 and 2022, regulators also discovered other safety violations. According to the former worker, the company has adopted “patch jobs” as a result of the leadership’s general “cross that bridge when we come to it” attitude.

They texted the IDS, saying, “If this deal doesn’t go through, it will only get worse for Catalent.” “Anyone waiting to help ensure a successful acquisition will cut their losses if the buyout is blocked.”

Other employees anticipate more layoffs and a reduction in the company’s operations to their pre-pandemic level. Regarding whether it was planning layoffs in the event that the deal was denied, Catalent declined to comment.

Employees worry that because of a lack of trust, Catalent’s clients would not renew their contracts. In addition to the possible loss of employees, employees are concerned about the company’s future in the event that it fails.

According to the agreement, Novo Holdings’ Novo Nordisk will buy the Bloomington site and two additional fill-finish locations in Europe straight from its parent firm. Novo is already a customer of Catalent, a third-party producer for pharmaceutical businesses.

The race to create GLP-1 medications, which are increasingly being used as therapies for diabetes and weight reduction, is ongoing during the acquisition. The two main ones are Mounjaro and Zepbound from Eli Lilly and Ozempic and Wegovy from Novo Nordisk.

Unprecedented demand is driving the industry’s growth, which is expected to reach over 15 million patients by 2030. As a result, pharmaceutical companies—including Novo and Lilly—are rushing to improve their manufacturing capacities.

However, rivals like as Lilly and Massachusetts Senator Elizabeth Warren have claimed that the agreement would undermine competition. In early October, Warren wrote to FTC Chair Lina Khan, asking the agency to take a closer look at it.

“The affordability crisis that is making GLP-1s unaffordable for many Americans will be made worse by limiting competition,” she wrote.

Eli Lilly is also worried about the purchase, particularly since the business says it depends on a Catalent location to manufacture its own GLP-1. However, Novo and Catalent have both disputed that the business produces Lilly’s GLP-1 medications Zepbound and Mounjaro for “commercial sale.”

The European Commission is expected to give Novo Holdings’ takeover unconditional clearance by December 6, according to a report from Reuters late last month. The FTC’s decision is yet unknown.