On Wednesday, Catalent (CTLT.N) stated that it anticipated that a majority of its present and forthcoming manufacturing capacity for pre-filled syringes until the fiscal year 2026 will shortly be booked out. The surge in demand for more recent weight-loss medications drove this expectation.

The Danish pharmaceutical company Novo Nordisk (NOVOb.CO) manufactures Wegovy, and the contract drug manufacturer plays a significant role in the manufacturing process by filling the self-injection pens for the weight-loss medication.

This year has seen a significant increase in demand for more recent medications belonging to the GLP-1 family, such as Novo Nordisk’s Wegovy and Ozempic and Eli Lilly’s (LLY.N) Mounjaro and Zepbound. These medications alter the signals sent to the brain regarding appetite, resulting in individuals feeling full for longer.

During a conference call with investors, Catalent CEO Alessandro Maselli stated, “Our exposure to the GLP-1 opportunity is rapidly growing.” Maselli went on to say that the firm intends to accelerate investment to develop its fill-and-finish facilities in Bloomington, located in the United States, and Anagni, located in Italy.

According to Maselli, revenue contributions from GLP-1 medications may increase to over $500 million once its enhanced capacity is operational, a significant increase from the less than $100 million anticipated for the fiscal year 2024.

“I thought it was a surprisingly good quarter, with the most exciting element being the GLP-1 opportunity,” said Paul Knight, an analyst at KeyBanc Capital Markets. “I thought it was a surprising good quarter.”

Catalent is also expanding its contract manufacturing for gene therapy developers. The company anticipates a 65% increase in revenue from its top customers, particularly its most important client, Sarepta Therapeutics (SRPT.O), for whom it manufactures Elevidys, a treatment for the rare genetic disorder known as Duchenne muscular dystrophy (DMD).

The business reported that Sarepta has already confirmed its scale-up intentions for 2024. The fact that Catalent exceeded the first-quarter sales forecasts given by Wall Street, indicating early signs of progress across its troubled divisions, helped the company’s stock rise by more than 11% during the afternoon trading session.

Catalent initiated a strategic assessment in August, shortly after reaching a deal with activist investor Elliott Investment Management. This occurred in the midst of difficulties with production and regulatory inspections at three of the company’s most important locations.

It was owing to a goodwill impairment charge of around $700 million that was tied to acquisitions in two different segments that it posted a quarterly net loss of $715 million. However, the company’s adjusted net loss came in at 10 cents per share, which was 4 cents less than what was expected. The preliminary revenue for Catalent came in at $982 million, which was higher than the forecasts of $939.14 million.