Catalent spikes as Barclays says FDA cleared Form 483 reports

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Contract manufacturer Catalent, Inc. (NYSE:CTLT) rose sharply on Monday after Barclays noted that the FDA over the weekend cleared both Form 483 observations related to the company’s Belgium and Bloomington facilities, removing a key overhang on shares.

FDA uses “Form 483” to inform the management about any potential regulatory violations found during a routine inspection.

“Based on this, the facilities are deemed to be at a minimally acceptable state of compliance with Current Good Manufacturing Practice (cGMP),” the analysts led by Luke Sergott with an Overweight rating on Catalent (CTLT) wrote.

According to the analysts, 483s have been the second most pressing issue Catalent (CTLT) faced as investors were bracing for further cuts to FY23 guidance and a slow start to fiscal 2024 due to warning letters/ site closures.

“This means that there are no warning letters at the facilities, which was one of the overhangs on shares recently,” Sergott and the team added.

Meanwhile, arguing that Catalent (CTLT) has not assumed drug approvals for any of its clients in its guidance, the analysts pointed to the FDA priority review granted for SRP-9001 gene therapy co-developed by Sarepta Therapeutics (SRPT) and Roche (OTCQX:RHHBY) (OTCQX:RHHBF).

“…..this news is pure upside,” Sergott and the team wrote, citing the FDA decision expected on or before May 29 next year.