Shares of Catalent Inc (NYSE:CTLT), which manufactures Elevidys, are trading higher with a strong session volume of 3.6 million compared to an average volume of 1.6 million.

Also Read: Catalent’s Bloomington Plant Making Novo Nordisk’s Obesity Drug Faces FDA Scrutiny Regarding Drug Manufacturing Concerns.

William Blair notes that Sarepta Therapeutics Inc.’s (NASDAQ:SRPT) Elevidys, supported by its expanded label, is expected to generate approximately $700 million annually in revenue for fiscal years 2025 and 2026, representing a substantial increase from the approximately $425 million generated in fiscal year 2023.

In October 2023, William Blair wrote that in fiscal year 2024, Catalent anticipates 30% Y/Y growth in non-COVID biologics revenue, reaching approximately $1.35 billion to $1.80 billion.

This growth is primarily fueled by a 60%-plus expansion attributed to Sarepta, translating into an estimated total revenue of nearly $700 million from the collaboration.

Despite this, questions remain about Catalent’s manufacturing capacity and the future role of Thermo Fisher Scientific Inc (NYSE:TMO) as a secondary manufacturer.

William Blair analyst writes “Regardless, while we do not believe Elevidys’s label expansion materially changes the likelihood that Novo Holdings’ proposed acquisition of Catalent will be completed, it does limit the downside for investors if the deal falls through.”

Related: Ozempic Maker Strikes $11B Deal With Catalent As It Rushes To Meet Massive Weight-Loss Drug Demand.

With a 12% spread and six months until the expected transaction close, the analyst sees an improved risk/reward profile for Catalent but maintains a Market Perform rating.

Price Action: CTLT shares are up 3.27% at $56.62 at last check Friday.

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