Catalent hires former Lonza bioscience chief to lead its biologics unit amid CEO departure

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In a swift succession of leadership changes at Swiss contract development and manufacturing organization (CDMO) Lonza, David McErlane, the former Senior Vice President and Head of the Bioscience Business, has made a significant move to US contract manufacturing competitor Catalent. This move comes hot on the heels of Lonza’s CEO, Pierre-Alain Ruffieux, announcing his departure, further complicating Lonza’s outlook.

David McErlane is set to take on the role of Group President of Catalent’s biologics segment, effective September 25th, 2023. This high-profile hire marks one of Catalent’s strategic moves since facing pressure from activist investor Elliott Management in August of the previous year. Elliott Management’s involvement prompted Catalent to revamp its operations following a period marked by manufacturing challenges, executive turnover, and declining revenues.

Before joining Catalent, McErlane led a critical department at Lonza that specialized in providing raw materials and technology solutions for cell and gene therapies, injectable drugs, vaccines, and biomanufacturing. The unit offered a wide range of products and services, encompassing everything from cell culture and discovery technologies to quality control tests and software for biomanufacturing.

In his new role at Catalent, McErlane will shoulder even greater responsibilities. His purview will extend to Catalent’s entire biologics business and global service offerings, encompassing development, biomanufacturing, drug product fill-and-finish, cell and gene therapy, and analytical services.

Before his tenure at Lonza, McErlane held various leadership positions at MilliporeSigma and BioReliance. He initiated his career at Zeneca, which later merged with Astra in 1999 to form AstraZeneca.

This high-profile appointment at Catalent coincides with the company’s ongoing efforts to restructure under CEO Alessandro Maselli. Catalent is shifting its focus from reporting on four distinct business segments to concentrating on two key areas: biologics and pharmaceuticals, plus consumer health, each accounting for roughly half of the company’s total revenue.

Despite these strategic maneuvers, Catalent has faced operational challenges, including “productivity issues” and high costs at major production sites, which impacted third-quarter earnings and the fiscal year outlook. However, the company managed to slightly adjust its revenue projection for 2023, now expecting sales between $4.23 to $4.33 billion.

Catalent has also encountered regulatory hurdles, with the FDA linking the rejection of Regeneron’s high-dose Eylea to cleaning and procedural issues at Catalent’s facility in Bloomington, Indiana.

This executive move to Catalent compounds Lonza’s recent leadership shakeup, following the announcement of CEO Pierre-Alain Ruffieux’s departure by “mutual agreement.” Lonza Chairman Albert Baehny is set to step into the interim CEO role for the second time since 2020. These rapid changes have taken a toll on Lonza’s share price, causing concerns about the company’s immediate future.

Lonza has announced plans to unveil its medium-term strategy and outlook during an October capital markets day in Visp, Switzerland, as it navigates these transformative challenges.

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