Good morning, everyone. And thank you for joining us today to review Catalent’s fourth quarter 2023 financial results.

Joining me on the call are John Greisch, Executive Chair of the Board; Alessandro Maselli, President and Chief Executive Officer; and Matti Masanovich, Senior Vice President and Chief Financial Officer. During our call today, management will make forward-looking statements and refer to non-GAAP financial measures.

It is possible that future results could differ from management’s expectations. Please refer to slide two of the supplemental presentation available on our Investor Relations website at investor.catalent.com for a discussion of risks and uncertainties that could cause actual performance or results to differ from what is suggested by those forward-looking statements and slides three and four for a discussion of Catalent’s use of non-GAAP financial measures.

Please also refer to Catalent’s fiscal 2022 Form 10-K/A and third quarter fiscal 2023 Form 10-Q for additional information on the risks and uncertainties that may bear on our operating results, performance and financial condition. Now I would like to turn the call over to John Greisch for some brief opening remarks which are covered on slide five.

Thank you, Paul. Good morning and thank you for joining us.

As I am sure you have seen by now, we issued two press releases this morning, our preliminary fourth quarter earnings release and the release announcing several initiatives reflecting our ongoing commitment to strong corporate governance and shareholder value creation, including the appointment of four new independent directors to the Board, two of whom were nominated by Elliott. The new directors are as follows; Steven Barg, Global Head of Engagement at Elliott Management, one of Catalent’s largest shareholders; Michelle Ryan, Former Treasurer at Johnson & Johnson; Frank D'Amelio, recently retired Chief Financial Officer of Pfizer; and Stephanie Okey, Former Senior Vice President and Head of North America, Rare Diseases, and U.S.

General Manager, Rare Diseases at Genzyme. We have also established a new strategic and operational review committee of the Board to conduct a review of our business, strategy and operations, as well as our capital allocation priorities in order to maximize the long-term value of the company.

The committee’s charter provides more detail about the scope of our review and is included in the Form 8-K filed this morning. In addition, I was named Executive Chair succeeding Marty Carroll as Board Chair.

The Board and I are very appreciative of Marty’s leadership and look forward to his continuing contributions as an ongoing Board member. As Executive Chair, I will be working closely with Alessandro and the team to drive improved operational performance and execute on the shareholder value creation initiatives announced today, as well as Chair the Strategic and Operational Committee.

The second press release also notes that we entered into a cooperation agreement with Elliott. This agreement addresses the matters I just discussed and contains customary provisions for an agreement of this type, including a standstill voting commitments and confidentiality provisions.

Elliott shares the Board’s confidence in Catalent’s leading position as a key partner for the biopharmaceutical industry and is committed to working with us to drive shareholder value. We look forward to providing an update to the market on the work of, and ultimately, recommendations by the strategic and operational review committee following our reviews.

We believe that these initiatives will improve Catalent’s positioning for long-term growth and success. We will be acting quickly and taking decisive action to strengthen operational performance, enhance profitability and create value for all stakeholders.

I am personally excited to be partnering with Alessandro and the management team to drive profitable, sustainable and capital efficient growth, along with long-term shareholder value as we move forward. We are all very pleased to be working collaboratively with Elliott to accomplish these shared goals together.

With that, I would like to turn the call over to Alessandro and Matti to discuss our recent performance.

Thanks, John. My opening remarks will relate to slide six of our presentation.

As we said in May, this fiscal year was very disappointing, largely as a result of the COVID, revenue and operational cliffs we have discussed. Additionally, as we previously explained and as our peers have also more recently disclosed, the pharma services industry is facing a macro driven pressure, primarily from the effects of lower biotech funding, slower and more cautious decision-making by customers and lackluster consumer discretionary spend.

We are acting urgently to mitigate all these impacts, reducing costs at underutilized facilities, bolstering our commercial efforts to accelerate new business wins and slowing our capital deployment in affected areas. We are also making progress on the operational improvements in our Biologics segment that we applied for you in the string.

From this perspective, we see fiscal 2023 as a year of transition and fiscal 2024 as a year of improvement that will create the foundation for long-term sustainable value creation. I will spend my opening remarks reviewing our strategic, operational and financial progress.

First, we have the right strategy in place to achieve the performance levels you expect from Catalent. This includes continuing to change our leadership team by bringing in new strengths, skills and fresh perspectives to bear to ensure we have the industry’s best talent on our management team.

In June, we appointed Matti Masanovich as our new Chief Financial Officer. Matti is a proven finance leader, with his experience growing and driving the profitability at public global manufacturing companies.

He most recently served as a Chief Financial Officer of Tenneco Automotive until it was acquired by Apollo. Previously, he was the Chief Financial Officer of Superior Industries International and General Cable Corporation.

It’s great to have the benefit of Matti’s fresh perspectives at Catalent and to have Matti join us on this call. John and I also want to thank Ricky Hopson for stepping in as Interim CFO prior Matti’s arrival and assisting Matti’s transition in these last two months.

In addition, in August, we announced the appointment of Lisa Evoli as our new Chief Human Resources Officer. Lisa joins Catalent from Integra Lifesciences, a global medical technology company.

Lisa has more than 25 years of experience, achieving organizational results, building robust talent pipelines and creating an inclusive and engaged workforce for a variety of multinational public companies. As you can see, we are putting a profound emphasis on ensuring we are recruiting and retaining top talent at Catalent and making great progress on rounding out our core leadership team, including my top priority, which is to fill the Biologics’ President role, a search, which is needing completion.

Second, our operational performance as a whole has shown improved trend over the last few months. While we see meaningful evidence of that, fourth -- that -- the fourth quarter will be a bottom for our Biologics performance, more work and time will be needed to return to our previous margin level.

Our goal remains to exit fiscal 2024 with the company-wide operating margins closer to our historical levels. Encouragingly, operational improvement has been particularly evident in our gene therapy offerings.

As previously discussed, the startup phase of our ERP implementation caused underutilization at BWI in the beginning of the fourth quarter. As we expected, these challenges led revenues at the site to dip in the fourth quarter from the third quarter.

However, as a result of our focus on rapid operational improvement, productivity levels at the site are in line with our high standards and revenue at the BWI is growing sequentially into the first quarter of fiscal 2024. Speaking of gene therapy, we could not be prouder of our gene therapy teams both at our manufacturing center of excellence in Maryland, as well as our packaging facility in Philadelphia, as they closely partner with our customer, Sarepta Therapeutics to deliver the first commercial dose of the Duchenne muscular dystrophy gene therapy to a five-year-old patient that was a day away from turning six and aging out of the program.

This outcome is a perfect example of our patient-first mindset. We are thankful to Doug Ingram, Sarepta’s CEO, for visiting our manufacturing team this month to celebrate this important patient milestone with our employees.

At Brussels and Bloomington, we have also seen some progress in our operational execution. Of the two sites, Brussels has been trending better, with this output getting closer to historical levels.

At the Bloomington, our customer received a complete response led set in June related to an FDA inspection that occurred in May and was still open at the time of the PDUFA date. We work closely with both the customer and the FDA to bring the inspection to closure as quickly as possible and we are pleased that the FDA recently approved the customer’s product, as well as another product produced on the same line.

Aside from the specific issues at Brussels and Bloomington, our value’s always put the patient first and this was evident in the Bloomington over the summer where we prioritized everything needed to bring the FDA inspection that occurred in May to a successful closure. While these activities had some impact on our anticipated productivity improvements at the site and led to increase costs in the first quarter of fiscal 2024, they were the right move for Catalent, for our customers and our patients, given they led to extremely rapid and positive outcomes for our customer’s products.

We continue to expect to complete the tech transfer activities related to large programs at Bloomington during fiscal 2024 and enter fiscal 2025 with more normalized margins. Catalent’s overall inspection track record remains as strong as ever with the 14 successful regulatory inspections in the last few months, including an FDA inspection at our sterile fill finish facility in Anagni, Italy that resulted in zero observation and no Form 483.

Our Pharma and Consumer Health segment is expected to grow revenue in the mid-to-high single digits in fiscal 2024. Product approvals, including a dozen of new approvals since January are expected to contribute to year-on-year growth.

In addition, supplying issue -- supply chain issues related to one of our top products have recently been resolved and new production orders are underway. Finally, our Consumer Health business, which fell short of expectation in fiscal 2023 has been leveling out.

From a financial perspective, despite our assumption of a significant incremental COVID reduction and previously mentioned continued biotech funding softness, we see a resilient topline for the fiscal year, including double digits non-COVID revenue growth. While we are pleased with our topline momentum, our utmost focus will be on improving our EBITDA margin, financial forecasting and cash flow generation, which will lead to enhanced shareholder value creation.

For example, we previously announced two separate cost reduction plans during fiscal 2023 and we already realized approximately $40 million of cost savings in the back half of fiscal 2023. We expect a total of over $100 million in incremental savings in fiscal 2024, as the effects of our plan continue to bear fruit.

When completed, the annualized run rate savings from these plans are expected to be in the range of $150 million to $170 million. We also embedded the mechanisms in the company, including our lean program called The Catalent Way, designed to deliver better operational consistency, increase level of utilization, reduce waste and greater efficiency.

We will keep you appraised on our progress regarding announced savings plan and new cost initiatives in the coming quarters. Turning back to the overall Biologics segment.

As you will recall, from June, we disclosed that our Biologics margins were being impacted by significant investments we -- that we made at our facilities operating in new modalities, including cell therapies and plasmid, just before the start of the period of reduced biotech funding. While we continue to believe all of these assets will create great value over time for innovator and patients, as well as to shareholders, our prior expectation for high growth related to these assets in fiscal 2023 did not materialize.

As a result, this facility are now experiencing a lower level of utilization and are running below breakeven levels, leading to a decrease of several 100 points in the EBITDA margin of our Biologics segment in Q4. We continue to actively address all aspects of this imbalance, to maximize our ability to effectively leverage these assets and deliver value to all stakeholders in the near-term.

Most importantly, our advanced capabilities continue to garner substantial commercial interest, positioning the company for long-term sustainable growth. As a result, once utilization normalizes, we continue to expect the Biologics segment to return to its historical EBITDA margin.

Regarding our forecasting process, we have been working hard to improve our rigor and discipline, including embedding greater conservativism in our future assumptions. More work remains, but under Matti’s guidance, we are implementing plans to strengthen our forecasting and internal control processes.

Given the extensive footprint we have built over the last several years and our focus on improving our margins, we are also reducing our CapEx in fiscal 2024 to around 8% to 10% of sales and we expect to maintain this lower level of CapEx intensity over the coming years as we grow into our existing footprint. With that, I would like to close by saying that our Board, management team and I are collectively focused on executing on our mission to improve the lives of patients every day, while striving to create value for all of our stakeholders.

We are taking the decisive actions to bring our operational performance consistently to levels we achieved across the company prior to the pandemic. Finally, as John mentioned earlier, I look forward to working more closely with him as an Executive Chair and want to welcome to our Board the four new members announced today.

I am looking forward to working with them, as well as Elliott to drive long-term shareholder value for our investors. I continue to have the utmost confidence and optimism in the Catalent’s leading market position, long-term opportunities and growth prospects as the industry’s essential partner.

We know what needs to be done to deliver the level of financial performance that we all expect and we are doing so. I will now turn it to Matti for a discussion of our Q4 financial results and the details of our fiscal 2024 guidance.

Thank you, Alessandro. I am very happy to be part of the Catalent team and contributing to the meaningful impact our company has on helping people live longer healthier lives.

In my first two months at Catalent, I have been deeply focused on bolstering our internal finance team and improving our financial processes to position Catalent for long-term success. I look forward to meeting many of our investors and analysts in the coming weeks.

Starting with the consolidated numbers on slide seven. Net revenue in the quarter was $1.1 billion, down 17%, both on a reported basis and on a constant currency basis compared to the prior fourth quarter.

Mergers and acquisitions had minimal impact on our results. Our fourth quarter adjusted EBITDA decreased 61% to $139 million or a margin of 13% versus a margin of 27.8% in the prior year quarter.

On an organic constant currency basis, our fourth quarter adjusted EBITDA declined 65% compared to the fourth quarter of the prior year, primarily driven by a decline in COVID demand. I will speak further to the major drivers of these results in the segment commentary.

Adjusted net income was $16 million or $0.09 per diluted share, compared to adjusted income of $195 million or $1.08 per diluted share last year. Reconciliations from GAAP net earnings to each of adjusted EBITDA and adjusted net income are in the appendix of the slide deck.

Excluded from net income are non-cash asset impairments totaling $85 million on an after-tax basis. These non-cash impairments couple several assets in both of our business segments.

The largest non-cash impairment is related to the partially constructed Biologics development and manufacturing facility near Oxford, U.K. Now let’s discuss our segment performance.

Our commentary around our segment growth will be in constant currency. As shown on slide eight, fourth quarter net revenue in our Biologics segment was $406 million, a decrease of $239 million or 37% compared to the prior fourth quarter.

The decline is primarily driven by significantly lower year-on-year COVID demand. Fourth quarter COVID revenue declined approximately $180 million to approximately $65 million.

Our COVID work is no longer focused on take-or-pay arrangements and is now tied to more standard ordering arrangements based on rolling forecasts with binding periods, which are typical arrangements in our business. On a non-COVID basis, Biologics revenue in the fourth quarter declined 16% versus the fourth quarter of 2022.

In the fourth quarter, our drug product and drug substance offerings, excluding COVID and cell and gene therapies, each grew double-digit year-on-year. However, with our core gene therapy business -- however, while our core gene therapy business was the strongest source of growth for Catalent in the first three quarters of fiscal 2023.

In the fourth quarter, gene therapy revenue was down over the prior fourth quarter. This was in line with our expectations and a result of production issues outlined on our third quarter earnings call in June.

As you can see on the bar chart, there were notable movements in our Biologics commercial and development revenue streams, where the classification of development versus commercial is driven by contractual language, which does not always align with the regular status -- regulatory status of a given product. The large drop in development revenue in the fourth quarter has two primary drivers; first, year-on-year decline in COVID revenue that have been designated as development revenue; and second, a large gene therapy product whose revenue was due to the development revenue a year ago is now treated as commercial revenue.

When looking at the full year for Biologics, COVID related revenue declined over 50% from $1.3 billion in fiscal 2022 to approximately $625 million in fiscal 2023. Non-COVID Biologics revenue increased by approximately 12% across the full year.

Moving to EBITDA. The Biologics segment fourth quarter EBITDA was down $206 million to a loss of $12 million.

Margin was negative at 2.9%, compared to the positive 30% recorded in the prior fourth quarter. The drop in EBITDA was primarily driven by the COVID declines and resulting underutilization, as well as underutilization at new modality facilities.

We are working to align our costs in these areas to be in line with demand and expect margins to improve on a year-over-year basis primarily in the second half of the fiscal year. As shown on slide nine, the Pharma and Consumer Health segment generated net revenue of $662 million, an increase of $19 million or 3% compared to the prior year fourth quarter, with segment EBITDA of $187 million, down $11 million or a 6% decline over the same period.

The segment’s revenue growth was primarily driven by the October 2022 acquisition of Metrics, which contributed 4 points to the segment’s topline growth and 5 points to the change in adjusted EBITDA. On an organic basis, the segment declined 1% as growth in Clinical Supply Services was more than offset by continued supply chain challenges related to a top product and a decline in prescription product revenue.

EBITDA margin of 28.2% was lower by 260 basis points year-over-year from the 30.8% recorded in the prior fourth quarter. The decline was primarily a result of lower organic volume, unfavorable product mix and cost inflation.

Slide 10 discusses our debt, debt maturities, related ratios and CapEx plans. Our debt load remains well-structured and permits us good flexibility.

Our nearest maturity is not until 2027. Our primary debt covenant is the ratio of net first-lien debt over the trailing 12 months adjusted EBITDA.

The covenant requires this ratio to remain below 6.5 times, and at June 30, the actual level was 2.8 times. Catalent’s overall net debt leverage ratio as of June 30, 2023, was 6.4 times, a sequential increase from the third quarter at 4.9 times, driven by the lower year-on-year LTM adjusted EBITDA as measured at fiscal year-end.

Because the EBITDA portion of the net debt leverage ratio is calculated on an LTM basis, we expect this ratio to move higher, ultimately peaking at the end of the second quarter due to a significant decline in COVID revenue on a year-over-year basis and then improving in the second half of the fiscal year, back to current levels as our EBITDA improves. We expect to be free cash flow neutral in fiscal 2024.

Reducing our leverage is our top priority. This is being achieved by maximizing EBITDA through continued revenue growth, improved utilization, better productivity and continued cost structure alignments.

At the same time, we are focusing on a number of opportunities to deliver incremental free cash flow in 2024 above and beyond our current guidance. These incremental opportunities include.

First, working capital, which includes accounts receivable, inventory and contract assets at June 30th was over $2 billion. We have a significant opportunity ahead of us to reduce working capital and drive free cash flow for the company.

Our initial focus will be on reducing the accounts receivable balance of over $900 million, reducing our inventory balance of over $700 million and reducing our contract asset balance of over $400 million. Our goal is to drive sustainable improvement in these categories to deliver incremental free cash flow, while simultaneously working to restore our historical EBITDA margin.

Second, we will ensure all CapEx spend is either aligned with our core values of patient first, quality, safety and compliance or contributes to key strategic initiatives with shorter more appropriate payback periods. And finally, with our newly created Strategic and Operational Review Committee of the Board, we plan to continue to evaluate our strategy and portfolio.

These activities to enhance cash generation, balanced with returning to a more normalized EBITDA margins should improve our overall net debt leverage. Our target for our overall net debt leverage remains less than 3 times.

Our compliant -- our combined balance of cash, cash equivalents and marketable securities as of June 30, 2023 was $280 million, an increase of $78 million from March 31, 2023, therefore, a $50 million partial paydown of our revolver that we were able to make in the quarter. The increase in cash was driven by strong cash collections in the quarter.

I would now like to discuss our contract assets, which as of June 30, 2023, had a balance of $436 million, a sequential decrease of $69 million and flat year-on-year. We are working with key customers to further reduce this balance through more favorable contract terms that are more aligned with our manufacturing timelines.

At June 30th, we had one strategic customer, a majority of whose business relates to our gene therapy platform that represented 20% of our $1.4 billion in aggregate net trade receivables and contract assets. We are confident that our contract asset balance is fully collectible.

The same customer was less than 10% of total revenue in the fourth quarter, but represented nearly 10% of our revenue for fiscal 2023, compared to approximately 5% in fiscal 2022. Finally, CapEx in fiscal 2023 was $601 million or 14% of revenue.

In light of the significant capital investments we have already put into the business, we are reducing CapEx in fiscal 2024 by more than 30% to a range of 8% to 10% of revenue. Now please turn to our financial outlook for fiscal 2024 as outlined on slide 11.

We expect our 2024 net revenue in the range of $4.3 billion to $4.5 billion, representing growth of 3% at the midpoint. This includes COVID revenue of approximately $130 million, a roughly $500 million decrease from 2023.

Our non-COVID business is expected to continue to deliver strong performance with full year revenue growth of approximately 15% to 20%. This is driven by roughly 30% growth in our non-COVID Biologics portfolio, primarily driven by significant growth from our largest customer, as well as completion of tech transfer activities.

In PCH, we expect mid-to-high single-digit growth. Current FX rates, which we use in this forecast are forecasted to have a positive impact of 1 percentage point to 2 percentage points on our revenue.

We project that inorganic revenue, which reflects one remaining quarter of the Metrics acquisition will not have a meaningful effect. We expect adjusted EBITDA in the range of $680 million to $760 million.

While this is a slightly wider range than usual, as Alessandro mentioned earlier, this is reflective of our new more conservative approach to forecasting. These temporary low margin levels anticipated for 2024 reflect our low facility utilization as our reliance on COVID revenue declines.

As we ramp up our non-COVID business and align our cost structure, we expect margins to recover towards historic levels as we exit fiscal 2024. We expect the margin of our Biologics segment to improve modestly as we move sequentially from our 2023 fourth quarter to the first quarter of 2024 and progressively improve through the year, with a more pronounced ramp in the second half.

In addition, given historical -- the historically seasonal nature of our PCH business, where revenue and EBITDA generation is the lightest in the first quarter and more weighted to the back half of the year, combined with our expected productivity ramps later in the year, we forecast roughly two-thirds of our consolidated adjusted EBITDA to be generated in the second half of the year. While this is more back half weighted than most years, the overall expected revenue split is more balanced with approximately 55% expected in the second half of 2024.

We expect adjusted net income in the range from $113 million to $175 million. Adjusted net income growth in fiscal 2024 is being impacted by all of the items affecting adjusted EBITDA, as well as the following items.

First, an expected effective tax rate in the 25% to 27% range, compared to 25.5% in fiscal 2023. Second, an increase in interest expense due to rising interest rates.

Though, as a reminder, with our rate hedge in place, nearly 70% of our debt is effectively fixed rate. And finally, increased depreciation expense due to substantial investments we have previously made.

I’d now like to share an update regarding the status of our filing of our fiscal 2023 Form 10-K. As we continue to improve our accounting, finance staffing and related processes, and we continue to bolster our internal finance resources, some additional steps remain to finalize our 10-K.

This will not allow us enough time to file for all of our closing procedures, excuse me, this will not allow enough time for all of our closing procedures to be completed today. Therefore, the completion of our financial statement closing processes and subsequent filings with the SEC will require more time extending beyond today’s deadline.

Tomorrow, we plan to file a notification of late filing on Form 12b-25. Our team is working expeditiously to finish the 10-K within the 15-day grace period permitted by the Form 12b-25 filing.

We do not expect any change to the numbers we have released today. We appreciate your patience.

To close, I want to summarize with you my top priorities as Catalent’s CFO, which are partnering with Alessandro to improve our margins by supporting productivity and cost alignment plans, to delivering incremental free cash flow by reducing the CapEx and the working capital intensity of the business, and finally, strengthening our internal controls and processes over financial reporting and forecasting. All of these priorities are within our control.

Operator, this concludes our prepared remarks. We will now open up the call for questions.

Hey, guys. Good morning and thanks for the time here.

Maybe Alessandro and Matti, can you just help us build a bridge from the $715 million or so in 2023 EBITDA to $720 million in 2024. You called out COVID assumptions is about $130 million, but could you clarify the contribution from Sarepta that you are assuming at the midpoint here, it sounds like you are expecting very substantial growth there given your 30% non-COVID Biologics growth assumption.

So any sort of color versus the $425 million you generated this year would be great? Thank you.

Tejas, Alessandro here. Thanks a lot for your question.

Look, first of all, we are pleased here today to be able to share our new guidance for fiscal 2024 in face of, well, as we disclosed a significant drop -- a further drop in our COVID revenues, but still seeing a resilience in our topline. So that’s something that is sticking to the underlying strength of our business as we shared, and as you are pointing out, some of that growth is related to our gene therapy business, which is now running at full cylinders after the some of the challenges that we shared during the spring.

So topline is pleasing us. It’s also well balanced in H1 versus H2.

As we shared during the spring in our Biologics business, there is still some work to do to restore previous margin. We are working expeditiously on addressing underutilization and some performance improvements, some more time.

The work is required in the first half of the year, but we are confident that restarting sequentially our margins over the quarter. So I will turn it now to Matti to give you a little bit more granularity on the bridge.

Yeah. So you asked about going from the $714 million of EBITDA 2023 to our -- I will go to the midpoint or approximately midpoint to $720 million.

Obviously, as Alessandro pointed in his comments and my comments, we are seeing COVID demand down year-on-year of approximately $0.5 billion and that has a high margin profile attached to it and it leaves behind cost that we have action. So there’s a saving down or from an EBITDA perspective related to that down volume.

We are replacing that down volume, as we mentioned, with one of our largest customers in gene therapy, it should be up year-on-year. We talked about some -- one of our facilities that Alessandro mentioned is doing better, which is Brussels and some of the performance underlying Brussels is doing better, as well as Bloomington during the quarter.

So those are primarily the biggest pieces and we have got the Biologics other piece, which is growing at a very rapid rate year-over-year.

Hey, Tejas…

Got it. That’s helpful.

Maybe the last point I would add to -- also pointing you out to some of the one-off impacts we recorded in the last fiscal year, something that you should consider as you model this.

Got it. Yeah.

Makes sense. And then my next question really is around the strategic review that’s underway.

Any color you guys can share around sort of the anticipated time lines for that to be completed and then understanding that there’s a few moving pieces here in terms of the balance sheet initiatives you spoke about, Matti, do you currently anticipate having the need to raise capital either via equity or debt or do these anticipated working capital improvements and the cut in CapEx, et cetera, mean that you feel pretty confident that you wouldn’t need to pull that lever?

You want to go first, John?

Yeah. This is John Greisch.

I will take the first part of that question. Firstly, Alessandro, the team, the Board, we all look forward to working and partnering with Elliott towards achieving our shared goals that we talked about in our prepared comments.

The agreement between the company and Elliott is really designed with the primary intent of enhancing long-term shareholder value. And specifically to your question, the mandate included in the charter of the strategic and operational review committee is to review our businesses and strategies with the objectives of; one, improving our operational performance; two, strengthening the financial profile of the company along the lines of some of Matti’s comments around portfolio assessment; and three, maximizing the long-term value for our shareholders.

We have got our first meeting of the committee in September. We have obviously been doing a lot of work ahead of that anyway and some of our Board appointments are part of that, the two nominated by Elliott, as well as two nominated from a search that we had been conducting.

So I think over the next few months, it’s hard to put a specific time line on it. I think it’s going to come down to Alessandro’s proposal that he and the management team will bring to the committee and to the Board.

But certainly by our next earnings call, we should have some traction to speak to you about and we are acting with a sense of urgency, not just at the committee level, but Alessandro and his team to address all of the initiatives and come up with the actions appropriate to drive and maximize long-term value for our shareholders.

Yeah. And then just to answer your -- the back side of your question.

I think right now sitting here today, we have got ample liquidity to manage the current affairs of the company between cash and revolver availability. We also have, what I would call, a significant and unique opportunity to sustainably take down the working capital intensity and the CapEx intensity of the company, which we are looking at for the year.

And so -- and then with the return of profitability in the back half of the year on the operational improvements that we will make, I don’t necessarily believe to have an issue to go after from a capital and/or debt raise.

Got it. Very helpful.

Thanks for the time, guys.

Hi. Thanks.

I will start with the first question, just a slight follow-up to Tejas. With the -- for Mr.

Greisch, the strategic review, you mentioned the first meeting in September. Could you tell us when you would expect to be in a position to report out findings of the committee or plans as a result of the committee?

What approximate time frame would you put on that?

Yeah. It’s hard to put a pinpoint a time line on coming out with conclusions or recommendations from the committee to the Board.

So I hesitate to put a specific time line on it. I’d just reiterate what we said in our prepared comments, working with Elliott with a sense of urgency, working between Alessandro and his team and the Board really to drive the things that we spoke to, assume we are going to be taking some actions sooner rather than later.

But to put a specific time line on it, I think, would be, I think, imprudent at this point in time.

Okay. Thank you for that.

From a -- for Alessandro and Matti, Matti, congrats on the new seat. On guidance, you have commented both in prior calls and today about trying to improve the accuracy or the conservatism in your guidance.

I wanted to maybe understand practically how you are doing that, but maybe more specifically to look at the PCH segment outlook in a mid-to-high single-digit growth rate on that, which quite honestly seems pretty optimistic. The environment, the comments by some of your peers on demand, the potential for a slowing economy, all seem like they would point to a more conservative assumption there and so, I guess, I would ask kind of substantiate that the way you are going about guidance this time around is more conservative than the mistakes that were made in the past?

Thanks.

Yeah. Look, I will cover first probably the second part and lean into the first part.

Look, with regard to our PCH segment, it’s always harder to really understand trends when you evaluate business and primarily on a year-to-year basis, because again, we have a business that has a high level of concentration in a few assets. So -- and the way you look at the performance of PCH into fiscal 2023, it was a sure below expectations.

It’s below what you expect from a business that should really grow in the mid-to-single digits. So when you extend your time of observation and time evaluation on a longer period, you would see that PCH is really growing in the middle of the range that we expect the PCH to grow, where you extend your evaluation on a three-year horizon clearly in mind that in between you also have some inorganic contributions to the growth there.

Speaking of some more specifics, as we pointed out in our prepared remarks, some of the reasons why we were impacted the PCH last year, where delayed approval on some new programs and as such launches Consumer Health, which on a year-to-year basis was really not performing as expected. And one key product, which has a significant impact on revenues and more so on profitability, which was impacted by our supply chain disruption and in reality didn’t contribute to the story of last year.

So all of these elements are a little bit returning back now, the Consumer Health is stable, while the approvals have happened in the second half of last fiscal year, now we expect these launches to contribute. And finally, there is -- this product now is back on track and not only we need to satisfy the end-market demand, but we also need to restore a safety stock levels, which of course, will create a short-term higher than normal demand for these very assets.

I would also add that the underlining in the business, we still have a very good franchises like Zydis, which continues to be on a high path of growth. So, overall, across the Board, there are elements to be optimistic, and I would say that, there is a lot of realism in how we are guiding a PCH for -- in the mid-to-high single digits and we feel pretty good about that guidance.

With regard to the second part of your question, I am going to give a very brief perspective for me that maybe is more historical and I am going to give the word to Matti elaborate more. Look, I believe that we have been surely learning a lot in the last 12 months, sometimes learning the hard way, but we are learning a lot not only about how we should be thinking about COVID, but also how we should be thinking about the growth profile of some of these new modalities during this time period both.

And we also have changed a little bit our internal mechanism to go after the forecast and to build the forecast from ground up. So I feel that these improvements have brought the right level of balance and conservatism in our future forecast, and as such, again, I feel confident about the guidance we are putting out today.

Matti?

Yeah. I think that’s fair everything you just said, Alessandro.

I mean, I think, at the end of the day, going to a ground up forecast, looking at it, looking at, pulling out any stretch that’s in there, pulling out any items that just don’t have a business or a plan behind it, I think, that’s the critical nature of the forecast and getting on it sooner. It will allow us to identify pockets of underutilization sooner and then we would get after that, get after those pockets of higher utilization.

So I think that’s what’s really driving it.

Great. Thank you.

It’s helpful.

Hey. Thanks.

Good morning. Maybe a question on Bloomington.

I think from some recent headlines it seems like there could be some new therapies ramping there this fiscal year. Could you just -- how should we think about utilization at Bloomington in FY 2024, given the COVID roll-off and then some of these new tech transfers?

And then maybe kind of longer term, with this kind of reset in COVID at Bloomington, how should we think about the long-term growth opportunity in kind of fill finish broadly?

Look, Bloomington is a launch pad for many new therapies, hands down, has always been and will always be. Sometimes some of the reasons why it’s in the news for inspections more than other facilities, because of that reason, because there is a lot of PIA work going on, there are a lot of launches, a lot of launches that are also requiring those inspections.

Sometimes the timing is a challenging one and you need to work through these situations. We continue to be pleased about the pipeline, we have assets which are very heavily utilized, we have been sharing all along that we are seeing a significant demand in prefilled syringes and so that capacity is very highly utilized.

And I believe that, overall, we are at the -- not only at the pipeline, but also some of the franchises where we expect to play a major role, one of the biggest one being a GLP-1. It’s something that we have been investing on and investing in for a few years, now coming to fruition and we are very excited about the opportunity coming from that specific therapeutic area, which we expect to be a very dominant one in years to come.

Got it. That’s helpful.

Thanks, Alessandro. And then, I guess, for the follow-up.

Maybe on the kind of these newer modality cell therapy and plasmids, this is an area of underutilization, the earlier-stage assets, and clearly, a drag on your margin. But in this way you are kind of thinking about the strategic review and cost initiatives, using this as a proxy for kind of near-term profitability versus the long-term strategy.

How much are you willing to accept the near-term drag on profitability from these assets, while maybe kind of looking to the long-term growth opportunity from those end markets and I am just kind of curious if you still view those as key to your strategy?

Yeah. Look, first of all, you always need to start from the clinical promise and the successes that you see in the clinical trials for some of these therapies and I have to say that the last few months have been exciting in these areas, right?

So these are areas which we believe will continue to drive a lot of growth into the industry, also areas that have an incredible promise of having a significant impact on patients and meeting unmet needs. So, surely, strategically, these are areas where we need to stay in and we need to stay in with the purpose of being a significant player with a significant market share.

All being said, we need to be realistic around what is the curve of growth of these areas, which we don’t expect to be linear. This is going to be more looking like an exponential curve in our opinion, with a little bit lower start, partly due to funding, partly due to the industry figuring out the manufacturing processes, which are positioning these therapies also for financial sustainability and when all of these will come together, this is going to be a great growth engine for the industry and for sure for Catalent.

In the meantime, we need to understand the growth profile and we need to adjust the cost structure, making sure that we can mitigate those short-term margin impacts as we go forward. But, overall, I believe that we need to avoid to jeopardize the long-term opportunity here.

Make sense. Thanks for taking the questions.

Hello. First question is on GLP-1.

I was wondering if you could elaborate more for investors, just frame out the opportunity you see here, and within your guidance, if these ramp as expected, can you share what percentage of sales will they represent just from a concentration perspective?

Well, look, first of all, the reason why I am speaking about the GLP-1 category and not necessarily specific product is because, as you know, as a company policy, an agreement with customers, we never really speak specifics of customers or products. I would tell you that overall, in fiscal 2024, we are going to start to see the fruits of the growth in this area.

But even more so, we are going to see that in the -- in fiscal 2025 I believe and I do believe that the second half of fiscal 2024 and surely to fiscal 2025 are going to start to gain inflection point for this category as more assets will come to fruition to accelerate manufacturing and increase volumes and output. So we are very excited, we are very committed to our customers and we have a lot of confidence that this will be a significant contributor to the future growth story of Catalent.

Great. And I wanted to also ask about Patara.

How did that perform within PCH in the quarter? Maybe for, John, I was wondering if you could comment on just as you do the strategic review, how you feel about kind of the long-term contribution from this business or whether it’s something you would consider potentially divesting?

So, look, I will take a little bit of the question. I will let John to close it out.

As we said, the Consumer Health market, as highlighted, that some of our peers is going through a little bit of a correction both from an inventory level standpoint to preserve cash and the consumer discretionary spend, which is probably orientating towards a more less expensive dosage forms. That being said, from a commercial standpoint, we have disclosed at the time of the acquisition in the portfolio of customers of these assets, there were not a significant presence of the big consumer of companies with the biggest brands.

And we are pretty pleased with the progress that our commercial team has done in building the relationship and penetrating these different segment of the market, which was not present at the time of the acquisition. Of course, nothing efforts overnight in our industry, so it will take some time, but we believe we are close to sign some additional work in business with some of these blue-chip companies, which will drive additional growth in this area.

Now that being said, as we -- as John mentioned, we are exploring all the potential strategic options under the table to make sure that we streamline the portfolio of the company and we accelerate the shareholder value creation, and as such, all options are on the table.

Just to add to Alessandro’s comment albeit some of it may be repetitive. I think he and I are going to work with the committee, and just to be clear on the objectives of the committee again, to drive actions, to improve operations, perform a strategic review of the company, as well as the individual businesses, portfolio assessment, as Alessandro just said, do we have all the pieces that we want, as well as allocating capital among the portfolio individual businesses, all with the objective of driving long-term shareholder value.

I think it would be premature to comment on any specific business at this point in time. Clearly, I understand your question, but give us some time to go through those activities and initiatives.

And as I said earlier, we will report back on the findings that Alessandro and I recommend to the committee and ultimately to the Board, but commenting on specific actions today, I think, would just be premature.

Understood. Thank you.

Yeah. Thanks and good morning.

So maybe going back to the guidance one more time. The significant growth you are expecting from the gene therapy customer, how dependent is that on the EMBARK data that will come out later this year?

How big of a swing factor does that have the potential to be for you all if that readout, good versus bad and how are you handicapping that for the purposes of the guidance?

Any upside, none of that is included. So if it does get expanded -- label doesn’t expanded.

It’s not included in the forecast.

Yeah. Look, that being said…

Okay.

I -- that being said, I just want to make one other point, right, which is, as we said many times, the fact that we are -- as we should, I -- mentioning explicitly and transformative one specific customer, it doesn’t mean that, the relation we did with that customer is only related to one program, and in fact, I am happy to share that the relationship with that specific customer is across several different programs. Some of that closer to full approval, some of them a little bit earlier in the pipeline, but we are pretty pleased about that pipeline.

Okay. That’s good color there.

And then on Bloomington and the challenges you have had there, can you talk about the changes you have made in terms of personnel or oversight at that facility that give you confidence and maybe give clients confidence that Bloomington has turned the corner and you are on a path to restoring the kind of the consistency and operational excellence there?

Sure. Look, first of all, I just want to give a shout to the Bloomington team, because it’s always coming to the news as of late for some of these challenges, but this is the one facility that has played an incredible role during the pandemic serving the United States and the world with an incredible effort of producing billions of vaccine doses, which have saved millions of lives.

And I just want this not to be lost from our memories, because it’s easy to move on from this. So the Bloomington team is a team that has accomplished an historical mission, which will never be taken away from them.

That being said, clearly, the work has changed now and the work is a little bit different, and as such, you need the different skills and talent. And since the beginning of the year, as you said, we have made several changes, both in our -- in the site leadership where we have a new general manager there, as well as in several leadership positions at the site and above the site, including our quality function.

And we are very pleased with the progresses and sustainable progress that this team is driving, looking at not only at cost reductions, but also driving the customer excellence and services, because at the end of the day, in the long-term, what really matters is to make sure that we deliver on our customer’s expectations and we continue to serve patients. So changes have happened, have been progressed over the last three months, four months, I would say, and we have the confidence that we have now in place the leadership for this new phase of the site, which is more launching new products and therapies as opposed to do one-only product in a pandemic setup.

Okay. That’s very helpful.

Thanks again.

Good morning. Thanks for taking my question.

Just maybe starting off here clarification. I guess just given the strategic review, I didn’t hear the confirmation of that $6.5 billion of revenue capacity that was talked about in the fiscal 3Q update, are you confirming that number still?

So, look, when you think about where we want to put the sweet spot of utilization of this company and where we are going to get the most of our operating leverage and we believe that the range of utilization you want to achieve in this business between 70% and 80% of utilization across the Board of your assets. You translate in what that utilization in our current footprint can translate, it is $6.5 billion.

So, of course, you noticed, this is predicated and keep being in the right therapeutic categories, having the right pipeline and winning the right amount of business, all of which we are working very actively in. So the potential of our network is that one and I guarantee you we are going to do everything that we possibly can to continue to fill our facilities and to get to that level of utilization which generates healthy levels of cash flows.

Thanks. And just a follow-up here on the Brussels facility.

I appreciate the color in the prepared remarks on the improvements there. Just any additional details you can provide on timelines and improvements and how you expect to get to maybe more of a normal productivity level there?

Thank you.

Well, look, we have seen a very good progress from that facility. So we are pleased with we are -- what we are already seeing.

I believe that some of the lines for some very critical product have recorded record output in the last few months. So pretty pleased with what we are doing there and I believe that Brussels is on the right trajectory, and as we go through the first part of the year, which is a little bit slower also because of preplanned vacations and shutdowns at these facilities and we look into the second half of the year, we are going to continue to see progress and we are going to continue to see Brussels returning to ARPU level first and then margin as a consequence.

We need to remind ourselves that this facility, we have all the demand we want, because we are still catching up some of the demand of coming from the experience and we expect in the second half of the year, this facility to really come back where it needs to be.

Thanks for taking the questions.

Hi. Good morning, everyone.

In the prepared remarks, you mentioned about returning to historical margin levels in the Biologics segment and also about returning to 3x target leverage level. Can you provide us a framework on order of magnitude and perhaps duration on reaching those milestones?

Well, sure. Look, at the moment, where we stand today, there is a significant amount of revenues that we are recording in our Biologics segment, which are translating in very little EBITDA levels and this is not the function of having the different market, different product mix or different product, is a function of the things that we have discussed in terms of underutilization of productivity improvement.

So there is a significant opportunity for us to continue to work on these programs and revenues and returning those revenues and contributing to the bottomline. Our layer, which is very sensitive to the bottomline.

So as we work through fiscal 2024 and we enter fiscal 2025, as we shared with the normalized margins, we have a line of sight to EBITDA returning to what we expect it to be, and as such, that leverage will take care a little bit of itself. I also believe that Matti will be absolutely focused on our $2 billion of working capital with all the initiatives that he has highlighted and looking at the progress is that he has already accomplished in the last few weeks since he’s joined, I am very confident that there would be a significant change in that area of our business, driving short-term cash flow.

But also repositioning the company going forward as we continue to grow the topline for less need of capital to be infused into the company to operate. So it is a pretty simple playbook, grow the EBITDA, you use working capital and improve cash flow.

Okay. So just to clarify then, do we -- should we think of normalized margins in terms of the pre-pandemic margins in the Biologics segments?

And then my other quick follow-up is, just on the C19 revenue outlook, does that include other respiratory program revenue for that large customer as well?

So, first of all, I believe that, the way I would respond to the first part of your question, there is nothing that is not in our control or that would prevent us to get back to the historical margins level in Biologics, nothing. The product mix is the same, the pricing is the same, equipments are the same and it’s a pretty healthy space to be in.

So we will get there, it’s a matter of work and time. The second part of your question, we will over time try to carve out the other respiratory vaccine work from the pure COVID work, right?

It’s more appropriate, because we believe that, these are less pandemic -- it’s less pandemic related to EBITDA and so the simple answer to your question is no.

Got it. Thank you, Alessandro.

Hi. Good morning and thank you for taking my question.

Just one really just looking at the cost savings. I am just sort of interested in, I mean, have you done -- I assume you have done a systemic -- a systematic review of all your facilities and look for potential other areas where there may need to be investment remediation.

How should we think about that $150 million, $170 million number in respect to are -- in terms of -- I mean have you -- is that a net number after you sort of look at all your facilities and what you might have to spend? Just basically just like what’s your confidence in that in achieving that cost number?

It’s Matti. We are highly confident in getting to the cost savings number and in the overall cost sooner than that when we get to it from $25 million to $150 million to $170 million that Alessandro outline, which is the cumulative cost savings against the baseline.

It’s really got hard actions behind it. So if you think about what’s been done at the company, it’s headcount related, taking down significant numbers of heads, both in the corporate section, as well as some of the underutilized facilities.

So we have got that. We do have more work to do, and as we talked about earlier, the Strategic Review Committee will look at -- will be looking at capacity as well, at utilization as well and will be looking -- will be taking it a step further.

So there could be more to come.

And -- sorry. And just one follow-up then on, when you look at the cell and gene therapy demand, I mean, obviously, a big impact from early-stage biotech.

I think at one point, Catalent had said, there’s maybe like 150 programs you had ongoing and in sort of the cell and gene therapy area, sort of like how are you looking at that triaging that pipeline, looking at that pipeline longer term and basically sort of adjusting it for the health of the clients? Basically just like what your -- basically your outlook in terms of the early stage for the cell and gene therapy business.

Sure. Look, I do believe that early-stage, it’s one part of the equation.

The other part of the question is that, as we continue to have good success in bringing assets to commercialization and we build our track record of commercializing products in new modalities and now this is track record is increasing, we believe we will become and we are becoming also the partner of choice to take on assets, which maybe have been early-stage elsewhere and we are going to be able to be the partner of choice to transition them into combination. So more specifically engaging also in the later clinical phases, which is in fact, possible.

So we believe that our market share in that specific stage is significant but will become even more significant as a result of our track record. So, again, we believe that our growth in that will be both coming from our continued focus on the commercial team in winning these early-stage assets, which is a little bit of the nature of it, but also being very surgical in going after the opportunity in late-stage as this pipeline matures and position ourselves as a partner of choice for commercial assets.

Thank you.

Great. Thanks for taking my question.

Just a couple of clarifying ones for me here, starting with GLP-1s. Alessandro, I believe I could have heard you wrong, but I believe you mentioned seeing significant assets were all coming to fruition in fiscal 2025 on the GLP-1 side.

I just wanted to try to clarify that, are you expecting to be involved with another major GLP-1 besides the one that has been well discussed here over the last year or so?

So, what I said is that, look, the reality is that for GLP-1 there is a large amount of demand that they need capacity to be satisfied, right, across the Board, and our job as a CDMO is to bring this capacity as fast as possible online to satisfy that demand. We are trying to do everything we can possibly can across all our facilities and I believe we are pleased that almost all our therapeutic facilities are in some way in different ways involved with this therapeutic area, which, as I said, is one that will be very exciting for the years to come.

So we are happy about our role, our role will increase as a result of additional capacity coming online and will be very much spread across the network.

Understood. Thank you.

And then on SRP-901, just confirming, your guidance does not assume that the upcoming data readout from Sarepta’s positive and that the label remains restricted to boys aged four to five. I guess you mentioned, I just want to confirm there and then if that readout is positive, I want to step to told you about how manufacturing plants might change or I guess, put another way, what level of stricter growth is currently assumed in guidance and what should that go to if the upcoming readout is positive?

Thank you.

Yeah. Look, so -- look, in any way, the readout from the study is going to be an important event from us, not only from a business standpoint, but from a patient-first standpoint.

So that is in fact a big deal for us. I don’t want that to be underestimated.

I do believe that you need to always think about the lens of this process and how this process is really, if you like, whatever happens today is going to have an impact that delayed in time. But clearly, as you think about our growth into the future, that it is an event that will be important to us, one that we are going to be observing with a lot of attention.

Understood. Thank you.

Great. Good morning.

Thank you for taking the questions and picking me in here. I wanted to follow up on David’s earlier question around PCH to get some additional color on the assumptions to reach that mid-single to high-single-digit growth next year.

So you highlighted some of the supply chain issues that will be resolved and drive a tailwind in terms of some of the new approvals. Can you walk us through what you are seeing from some of the macro headwinds that you have highlighted this year and then what are you assuming for that magnitude and duration of those macro headwinds in 2024 for PCH?

Sure. Sure.

First of all, look, and we said all along, PCH has some macro driven dynamics primarily related to the Consumer Health, where consumer discretionary spend is really what can drive end market demand that we have been pretty open and forthcoming about this in the fall of last year. But when you think about the rest of the footprint of PCH is in large commercial approved pharmaceutical product or products that are late-stage and due to be approved.

So the way you need to think about the dynamics in that business is less macro related and more pipeline related. And as I said, last year was a disappointing one, because of some of the assets we had in the pipeline, which were expected to drive growth on top of the base business were a little bit delayed.

We have been open about how we were getting those approvals, a dozen of them did happen in the last six months, and as such, they are now launching, they were building stock, we are producing commercial volumes. So that’s the other dynamic.

There is the specific product for which we have resolved the supply chain disruption and now we do have primary materials to be able to deliver that important product, and as always happens in this case, is after one year of suspension, not only you serve the end market demand, but you also doubled down on inventory deals. So there is an inflated demand in the short-term.

And finally, we are pleased with the way we are winning business in our early-stage there as well. So across the Board, I believe that PCH is posed for a good year.

When you look at the year over the horizon of the last two years, it’s really where it needs to be, mid-to-single digits, clearly because last year was kind of flat. This year looks a little bit higher, but this business is performing now as we expect it to perform.

Great. That was really helpful.

And then my follow-up, I just want to ask about conversations that you have been having with customers. So given some of the recent challenges, can you give us any color on what your win rates have been with new customers in recent months and then can you discuss, has there been any discussions around cancellations or request for concessions from customers given some of those challenges?

Thank you.

Sure. Look, as you can -- I have been always pointing out that the data set of our customers, especially our existing customers in terms of evaluating the current performance is a little bit wider.

So -- and as we shared in the script, just to point one example or one side, that you have a CRL, which makes to the news and you have an inspection ending up with the Form 483 [ph] observations in Anagni that does it make it to the news. And we are sharing now that today just for the very purpose of providing a little bit of a more balanced view, which is up to get from the external world, but surely is one that our customers get real time.

So when you think about some of those challenges, one, the perspective is a little bit different and the set of information available is already different. According to our quality agreements, we do share with our customers all our regulatory outcomes, include both the ones that are impacting their products and the one that are not impacting the products to provide a perspective on the overall compliance profile of the company.

And with regards to the other news, of course, me and the rest of the management team are on the front line all the time and providing perspective of the news that have been coming up in the recent months, including the ones that are coming up today and we are going to be -- is always transparent providing perspective but also reassuring customers that Catalent has been here for decades and will be here for decades to come.

Great. Thank you.

So, first off, I just wanted to follow up on an earlier answer to the last of today’s many GLP-1 questions. So, Alessandro, I think, you said that, all your sterile facilities are involved in GLP-1 projects in some way.

So could you just update us on the global count of sterile fill finish lines currently offering commercial scale and what percent of those have prefilled syringe and/or cartridge capacity?

So, look, I would tell you that, at the moment, we have a pretty sizable capacity in sterile fill and finish. I believe at the moment, I would say that, probably, close to 40% of our capacity in prefilled syringes and we are rapidly increasing that.

So I believe that our capacity will become skewed towards prefilled syringes in calendar 2024, and what you should think about is that most of our sterile fill and finish volumes will come from prefilled syringes as we go forward. I just would like to point you out also to the fact that our service does not finish with the filling operations, but we provide also packaging to our customers, we provide auto-injector assembly to our customers.

So there are a lot of capacities, which seems to be ancillaries, but are pretty relevant in the overall economics of these franchises, specifically also on the one that you did mention. So we have a pretty large footprint, we are pleased with this coming online, what will be coming online and we believe that with our footprint, we are going to be able to play a major role in these therapeutic areas.

Got it. No.

That’s really helpful. And then my second one here is on free cash flow generation efforts.

So, Matti, you called out the inventory balance as the second priority in working capital opportunities behind accounts receivables. So appreciate muted capacity utilization is likely inflating the balance here.

But given supply chain and supplier lead times have normalized, why haven’t we seen inventories come down already or why is that not higher in the packing order in terms of working capital initiatives?

Well, I mean, I think, right now I wouldn’t say there, maybe it was my phrasing of the ordering, but it is high on the pool. I think from an ease of getting the cash out, I think, in receivables, we have shipped the product.

We have an outstanding receivable. They have got to go collect it.

So it’s a lot easier to go and get it just as it comes back, comes in quicker. Inventory has to burn it off.

You have to utilize it and burn it off and then change your ordering patterns and look at the SIOP process to really get at what I will call the DIOs and the underlying metric of DIOs and bring it down and so I do think there’s a little bit more work to do from an inventory perspective. I do think the company just really hadn’t focused on it to-date as much as they should have and I think when you sit here and look at the inventory balance, I think, it’s a bit loaded, I do think we have an opportunity to take it down, like I said, burning of those inventory balances and bring it down to a more normalized number where it’s sustainable.

And I think the idea here is, to your point, the supply chain has leveled out. As I see it, I think, it’s more normalized with some products or they are not clearly fixed, not clearly fixed and we all set stuff on boats.

So we have to look at the whole supply chain in totality, but I do believe there’s stencil opportunity sitting here looking at capital in total. And I don’t think there’s going to be a much -- it’s a different team that’s going to be, commercial team is going to be going after receivables.

That manufacturing team and the supply chain are going to be going after inventory.

Great. Got it.

Thanks for the time. Appreciate it.

Thank you. I’d like to thank everyone on the Catalent team for their commitment to our customers and patients, as showcased by the delivery in partnership with our customers Sarepta Therapeutics of the first dose of LFDs gene therapy to a young child in the U.S.

who’s suffering from DMD, making a historical milestone in the promise of treating these terrible condition. We remain focused on leading Catalent towards sustainable and profitable growth and increasing the shareholder value and I believe that actions announced today has placed us on a clear path to doing so.

Thank you everyone for taking the time to join our call and your continued support of Catalent.