Catalent will spend more than $700m to expand development and production capacity for biopharmaceutical products.

The CDMO outlined the plan during its Q2 earning call this week, explaining it will spend 15 to 16% of its net revenue in fiscal 2022 – which it expects to be in the $4.74 billion to $4.86 billion range – to expand its biologics business.

CFO Thomas Castellano told analysts “We expect CapEx to be approximately 15% to 16% of our fiscal 2022 net revenue expectations, driven primarily by growth investments in our Biologics segment.”

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Financial performance

CEO John Chiminski said continuing strong growth in Catalent’s biologics business was a key driver in the quarter.

“The Biologics segment, driven by continued high utilization of our drug product assets, was again the top contributor to Catalent’s financial performance.

This was echoed by Castellano, who said, “Biologics net revenue in Q2 of $638 million increased 60% compared to the second quarter of 2021, with cell therapy acquisitions adding 1 percentage point of growth. This robust net revenue growth was driven organically by broad-based demand across the segment, most notably for COVID-19 related programs.

Catalent’s softgel and oral technology business grew in the quarter, with revenue climbing 36% to $329 million. Chiminski cited “recovery from pandemic-related headwinds” and the positive impact of Bettera, a gummy manufacturer the CDMO bought last year, as key.

The CDMO’s oral and special delivery technologies business generated revenue of $156 million, down 8%. The firm noted the impact of the divestiture of its blow-fill-seal business and the acquisition of Acorda’s spray drying assets had on the unit’s financial performance.

Catalent’s clinical supply division saw revenue of $99 million for the period, up 7% year-on-year. Chiminski said the gains reflected increased demand.

He also predicted that the clinical supply services facilities the CDMO opened in San Diego, California and Shiga, Japan will be “long-term growth drivers.”