Good day and thank you for standing by. Welcome to the Catalent, Inc. Fourth Quarter Fiscal Year 2021 Earnings Conference Call. At this time all participants are in a listen-only mode. After the speakers’ presentation, there will be a question and answer session.

[Operator Instructions] I would now like to hand the conference over to your speaker today, Paul Surdez, Vice President of Investor Relations. Please go ahead sir..

Thank you, April. Good morning, everyone and thank you for joining us today to review Catalent's fourth quarter and full fiscal year 2021 financial results. Joining me on the call today are John Chiminski, Chair and Chief Executive Officer; and Tom Castellano, Senior Vice President and Chief Financial Officer.

In addition to reviewing our fourth quarter and fiscal year 2021 earnings release we issued earlier this morning, I also refer you to our other press release issued today announcing our agreement to acquire Bettera Wellness, a leading developer and producer of gummy, soft chew and and lozenges for Nutraceuticals functional and botanical extract products.

Please see our agenda for today's call on Slide 2 of our supplemental presentation which is available on our Investor Relations website at investor.catalent.com. During our call today, management will be making forward-looking statements and refer to non-GAAP financial measures.

It is possible actual results could differ from management's expectations. We refer you to Slide 3 for more detail on forward-looking statements. Slides 4 and 5 discuss Catalent's use of non-GAAP measures and our just issued earnings release provides reconciliations to the most directly comparable GAAP measures.

Please also refer to Catalent's Annual Report on Form 10-K that will be filed with the SEC today for additional information on the risks and uncertainties that may bear on our operating results, performance and financial condition, including those related to the COVID-19 pandemic.

Now I would like to turn the call over to John Chiminski whose remarks will be covered on Slides 6 through 13 of the presentation..

Thanks Paul and welcome to the call. Fiscal 2021 was an extraordinary year for the entire world and for Catalent.

During the year, we achieved truly significant results financially, operationally, and in terms of making a meaningful impact on our global community, including accelerating our capacity expansions and infrastructure, substantially expanding and deepening one of the best talent pools in the industry, intensifying our longstanding commitment to sustainable practices, and accelerating our growth strategy all while delivering record financial results.

We rose to the challenge of scaling our capacity to meet significant demand for vaccines and treatments to address the COVID-19 pandemic and are on track to deliver well over a billion COVID-19 vaccine doses this calendar year.

We have also continued to develop and manufacture a broad range of other important medicines under difficult, unprecedented, and rapidly changing global conditions.

Our top priority throughout the pandemic has been to keep our employees safe, and we continue to be humbled by the dedication of the more than 17,000 members of our team around the world who have enabled us to grow the company and deliver for our customers and their patients during this tumultuous time.

Through our shared experience navigating the pandemic, we've grown as individuals and as a company, added substantial new capabilities and strengthened partnership that together enhance our ability to continue to develop and deliver products that help people live better healthier lives.

With that overview, I'll now provide a summary of our financials for the fourth quarter and full fiscal year as well as operational highlights since our last earnings call. I'll then conclude my prepared remarks with an overview of the acquisition of Bettera Wellness, which we announced this morning.

Our net revenue for the fourth quarter was $1.19 billion, increasing 25% as reported, or 22% in constant currency compared to the fourth quarter of fiscal 2020. When excluding acquisitions as well as the divestiture of our blow-fill-seal business which closed in March, organic growth was 26% measured in constant currency.

Our adjusted EBITDA of $348 million for the fourth quarter increased 30% as reported or 27% in constant currency compared to the fourth quarter of fiscal 2020, which includes organic growth of 32% measured in constant currency.

Our adjusted net income for the fourth quarter was $209 million or $1.16 per diluted share, up from $0.90 per diluted share in the corresponding prior year period.

The Biologics segment, given the continued high demand for drug products, drug substance, and bio based offerings was again the top contributor to Catalent's financial performance with organic revenue growth of 66% and segment EBITDA more than doubling from the fourth quarter of last year.

Our Softgel and Oral Technologies segment continued to experience some of the same pandemic-related headwinds in the fourth quarter with net revenue down 1% over the fourth quarter of last year on a constant currency basis.

However, margins improved year-over-year and so has our outlook as we're seeing business gradually come back, and we expect to return to organic growth in fiscal 2022. Our Oral and Specialty Delivery segment had organic net revenue growth in the mid teens.

After excluding the results due to the product in our respiratory platform that we voluntarily recalled last September, in OSD like SOT we're also seeing that certain offerings within that segment impacted by pandemic are beginning to come back.

And finally, our Clinical Supply Services segment posted over 20% constant currency net revenue growth and strong margin compared to the fourth quarter of fiscal 2020, a comparison period that included widespread disruption to clinical trials during global lockdowns as a result of the pandemic.

For our full fiscal 2021, net revenue and adjusted EBITDA came in at record levels driven by robust growth in our Biologics business which represented 48% of our net revenue in the year. Fiscal 2021 net revenue was $4 billion and constant currency organic growth was 25% compared to the prior fiscal year.

We estimate approximately 18 percentage points or more than $550 million of our organic growth last year which derived [ph] from the net impact of the COVID-19 pandemic after factoring in the amount of net revenue generated from COVID-19 projects against opportunity costs and pandemic related headwinds that were created in some of our service offerings.

Adjusted EBITDA exceeded $1 billion resulting in constant currency organic growth of 32% compared to fiscal 2020. We also increased our adjusted EBITDA margin to 25.5%, up 120 basis points from the 24.3% adjusted EBITDA margin in fiscal 2020.

To meet our commitments to our customers and their patients, a number of Catalent facilities have been operating 24 hours a day, seven days a week for more than a year. At the same time, we've increased our workforce from 14,000 at the end of the last fiscal year to more than 17,000 today to meet our growing production volume.

As we said on past calls, COVID-19 has not only accelerated our strategic plans, but also accelerated returns on the strategic investments we've made, enabling us to put additional cash to work to continue to drive our long-term growth. Let me update you on some of these capacity and capability investments.

As you know, our 950,000 square foot facility in Bloomington, Indiana, plays a critical role in the global vaccine production effort. Over the last year, we brought online two new vial filling lines now dedicated to the manufacture of products for two of our COVID-19 vaccine customers.

We’re also qualifying a high-speed syringe filling line at this site. This project was first announced in January 2019 and is expected to be operational in the next several months, in line with our original plan.

Given a strong demand for biotherapeutic manufacturing, we will continue to invest in additional drug product and drug substance capacity at our Bloomington campus. Our 300,000 square foot facility in Anagni, Italy also continues to make significant contributions to the global supply of COIVD-19 vaccines for multiple customers.

The additional high-speed vial filling line we've accelerated for our vaccine customer, is expected to be operational before the end of this calendar year.

Last month, we announced a $100 million expansion project at our Anagni facility to add biologics drug substance manufacturing capabilities to the site, establishing our first drug substance capacity outside of the U.S. to support the growing European market demand for biologics manufacture and supply.

The initial phase of the expansion includes installation of two 2000-litre, single-use bioreactors, with a new purpose-built manufacturing suite associated investments to support clinical development and investments to support late stage and commercial tech transfers.

This initial phase will also include the installation of all the needed infrastructure for further expansion in the future. The initial bioreactors are expected to be operational for customer projects late in fiscal 2023.

Later phases of the plant expansion contemplates creating 16,000 litres of total flexible manufacturing capacity, enabling 2000-litre to 8000-litre batches.

Also in Europe, we announced last summer further investments in a facility in Limoges, France, to create our European center of excellence for clinical biologics formulation development and drug product fill/finish services. These investments are on track to be completed by the end of fiscal 2022.

The modernization of the 56,000 square foot facility includes the installation of a high-speed flexible line capable of filling vials, syringes, or cartridges under isolator technology as well as enhancements to its analytical and quality control laboratories.

Our new center of excellence in Limoges will strengthen Catalent Biologics' global and European capacity and will also serve as a feeder for additional (ph) services at our Anagni and Brussels facilities. Moving towards cell and gene therapy offerings, we continue to add both capabilities and related capacity.

We entered the cell therapy market in February 2020 and have rapidly built our infrastructure and capabilities. We recently completed the build out of our GMP cell therapy suites in Houston, Texas and have begun manufacturing for clinical supply.

We’re also progressing the build out of our commercial scale cell therapy manufacturing facility in Gosselies, which is on track to open in late fiscal 2022. We also continue to identify inorganic opportunities to grow our cell and gene therapy platform.

Recently, we acquired RheinCell Therapeutics, a developer and manufacturer of GMP-grade, human-induced pluripotent stem cells or iPSCs. Importantly, iPSCs are an ethically sourced substitute for embryonic stem cells, and have shown significant promise in regenerative medicine, for a wide range of therapeutic indications.

RheinCell expands our existing custom cell therapy process development and manufacturing capabilities with proprietary GMP cell lines for iPSC-based therapies and enables us to offer the building blocks to scale iPSC based cell therapies while reducing the barriers’ cell therapy innovators would otherwise face to gain entry into the clinic.

In February, we entered into the plasmid DNA market through the acquisition of Delphi Genetics also located in Gosselies now part of our European Cell Therapy Center of Excellence, together with the launch of plasmid DNA development and manufacturing capability through an organic investment in our Rockville, Maryland facility.

We've since further expanded our European Cell Therapy Center of Excellence on our Gosselies campus with the acquisition of an additional 32,000 square foot facility. This facility provides us with the capacity for commercial scale plasmid DNA manufacturing up to 500 meter scale.

With the integration of plasmid DNA into our overall cell and gene therapy offerings, choosing Catalent will allow customers to de-risk their supply chain and optimize their programs along the entire development pipeline.

In gene therapy, viral vector manufacturing capacity continues to be in high demand with a growing number of gene therapy compounds currently in the industries development pipeline as well as for manufacturing viral based COVID-19 vaccines.

In fiscal 2021, we completed the build out of commercial scale manufacturing suites in the first building at our Maryland Gene Therapy campus. To meet the increase in demand we see we’re now outfitting the adjacent building to include at least five additional CGMP suites, a project that remains on track for completion by this time next year.

Before reviewing the Bettera acquisition, I'd like to highlight our expanding corporate responsibility and ESG commitment and the additional progress we've made since our last update.

As a leader in the growing CDMO industry, we understand that we need to demonstrate our sheer commitment, sense of urgency and value in contributing to the long-term sustainability of the entire biopharma sector.

In June, I shared our long-term sustainability plans at the Biopharma CEO Investor forum and I encourage you to watch the presentation on our IR website.

Since then, we formalized the commitment to the science-based target initiative, joining a growing list of companies setting actionable science-based greenhouse gas emission reduction targets to limit global warming. This commitment includes calculating and reducing directing incorrect emissions even as the company continues to evolve and grow.

One of our first actions after making this commitment was to ensure that the energy we purchase for all our sites in North America, South America and Europe, as well as the majority of our sites in Asia, is coming from renewable resources.

As a result of our actions 97% of all electricity usage across the enterprise is now procured from renewable energy sources such as wind, solar, hydro, and biomass, an achievement that will contribute to our overall greenhouse gas reduction efforts.

We will incorporate our work on science-based targets into our annual ESG report for fiscal 2021 which we expect to publish in the first quarter of calendar 2022. While I'm very proud of the items I just mentioned and the many other items that have become part of Catalent’s ESG progress over the last several years, there is still more work to do.

For example, some of our top ESG goals for fiscal 2020 include continuing to improve employee diversity at all levels of the organization and meeting our commitment to be landfill free by the end of fiscal 2024. Now on to Slide 9 we’re pleased to announce our agreement to acquire Beterra Wellness.

We've been seeking the right opportunity to expand our participation in the nutraceuticals and nutritional supplements market for quite some time leveraging the accelerated growth dynamics of this space.

Bettera is a leading developer and manufacturer of consumer-preferred gummy, soft chews and lozenges for Nutraceutical Functional and Botanical extract products and they have four digital process production facilities in U.S.

There is no question that Bettera is one of the leading independent suppliers in this high growth capacity constrained portion of the market.

Within this space, Bettera is well-known for its ability to partner with its customers to develop and manufacture a variety of high-quality delivery formats with differentiated flavors and superior consumer experience.

It's clear to us that the specialized expertise that the team will be bringing on is unparalleled and Bettera's customer relationships reflect that.

The acquisition will enable Catalent and specifically a Softgel and Oral Technologies or SOT segment to expand our substantial existing consumer health platform with the fastest growing wellness product offerings in this area and also expand our ready-to-market product library, as well as provide a variety of packaging options to meet customer needs.

We're excited to have this opportunity to strengthen our partnerships, with our customers across gummies, soft chews and lozenges going forward.

And part of today’s announcement we are also increasing our expectations for long-term revenue growth rate for our SOT segment from 3% to 5% to 6% to 8% given the strength of our advance offerings and product libraries and supported by the significant growth contributions that we expect from Bettera.

Moving to the transaction details, we've agreed to acquire the Bettera for $1 billion on a debt-free cash-free basis, and we expect to close this transaction within the first half of this fiscal year.

Today, the company generates approximately $150 million in sales at attractive margins reflecting its premium offerings and then growing it over 20% annually. We expect similar growth over the next several years.

We plan to fund the acquisition with a combination of cash on hand, a partial drawdown of our revolving credit facility and potentially the issuance of new debt with the resulting debt leverage ratio of approximately 3.1 times at close.

Like in some of our other recent acquisitions, we expect significant deleveraging in the near to medium term, following closing and expect to maintain ample fire power for further strategic M&A.

From an earnings perspective, we expect the acquisition to be accretive to ENI per share in the first year at the close and significantly accretive thereafter.

At Catalent we pride ourselves in our ability to bring in new talent and capabilities, and we're looking forward to seamlessly integrating Bettera and welcoming its team of approximately 500 experienced and knowledgeable employees and formulators to Catalent.

On the integration front, we’ve developed a detailed plan to support and accelerate Bettera's in flight growth plans and have already identified work streams and leaders for integration. Let me now share some additional capability information and market trends as covered on Slide 11.

As I mentioned, we’ve been seeking the right entry point into the nutraceutical gummies, soft chews and lozenges market some time. Importantly, Bettera is one of the few at scale, independent manufactures in the market today and is a market leader across all three categories.

In addition to Bettera’s end-to-end solutions from developments, commercial manufacturing and packaging, Bettera has an extensive library of ready-to-market formulations to accelerate product launches for partner brands.

Importantly, Bettera has the ability to produce, gummy formulations with both gelatine and plant-based technologies, with culture, [indiscernible] organic and other certifications. Bettera also produces soft chews, and in particular soft chews using a cold process, which is ideal for protecting heat sensitive ingredients.

Our consumer health customers are constantly asking Catalent for new formats in additions to our product library and specifically ask about gummies and other engaging formats for their nutritional supplement and nutraceutical product concepts.

We view Bettera as an innovation engine for emerging high growth brands and we’re excited to begin working with our customers in this area going forward.

One of the reasons we're focused on investing in these areas is that we believe Bettera is at the intersection of macro consumer health trends, with innovative delivery systems growing at roughly four times the pace of the traditional market. I would also note that about two-thirds of this capacity constrained market is outsourced today.

While the market for traditional delivery systems remains large, the innovative segment’s recent explosive growth has increased its portion of the nutraceuticals market to close to $17 billion today measured at the retail level, more than doubling its market size over the last 5 years.

And we expect Bettera to grow in excess of the innovative market as a whole in the near to medium future. Finally, on this subject I want to emphasize at Catalent we always have room to add leading high growth premium CDMO franchises to our business.

Bettera is the latest example in our tradition of high growth and earnings accretive strategic M&A and we're excited to begin working with Bettera's employees and customers.

I'll conclude my opening comments by saying that Catalent prides itself on a track record of successfully identifying, acquiring and integrating world class businesses with leading manufacturing and development capabilities. Over the last several years, we've transformed our portfolio, expanding capacity and capabilities across our service offerings.

We're proud of the work we've accomplished. Our future has never looked brighter. As I look across our entire portfolio, I note again, that we remain on track to meet or beat our goal of achieving 50% of our 2024 net revenue from a biologic segment, we continue to forecast long-term growth in that segment in the range of 10% to 15%.

Based on our confidence in the growth we foresee across all of our segments, we're raising our projected consolidated long-term net revenue growth rate to 8% to 10% from the previous 6% to 8%, which we expect will be coupled with continued EBITDA margin expansion.

We are confident in our trajectory and believe our announcement today is a testament to how our employees and partners have helped Catalent position itself for continued long-term growth. I'm now very happy to welcome Tom Castellano back to our earnings calls.

As you know, Tom previously served as the company's Investor Relations Officer through 2019 and was promoted on June 1, as CFO from his most recent role as Global Vice President of Operational Finance. Welcome back, Tom..

Thanks, John. I’ll begin this morning with a discussion on segment performance, where commentary around segment growth will be in constant currency.

I'll start on Slide 13 with Biologics, our largest business segment which represented 48% of our net revenue in fiscal 2021, to get to 33% in fiscal 2020, and half of our net revenue in the fourth quarter, compared to 38% in the fourth quarter of last year.

Biologics net revenue in Q4 of $603 million increased 66% compared to the fourth quarter of 2020. This segment is about increasing 112% over the same period.

Overall net revenue growth was essentially driven organically and EBITDA growth was slightly impacted by 1% to the costs associated with scaling and integrating the cell therapy and Plasmid DNA acquisitions we closed in fiscal 2021.

The robust organic growth in our Biologics segment in the quarter was again driven by high demand across segment offerings, including drug product, drug substance, and viral vector manufacturing, along with bioanalytical services.

The increase is primarily driven by COVID-19 related projects, which continued to contribute to both development and commercial revenue growth.

This segment's EBITDA margin increased significantly year-on-year to just under 31%, compared to 24.3% in Q4 of last year, which is primarily attributable to increased capacity utilization and higher volumes manufactured.

In fiscal 2022, we expect the Biologics segment will continue to grow net revenue at a double-digit pace will not near the 88% growth rate this segment reported in fiscal 2021. Please turn to Slide 14 which represents results from our Softgel and Oral Technology segment.

Softgel and Oral Technologies net revenue of $301 million decreased 1% compared to the fourth quarter of 2020, the segment EBITDA increasing 6% over the same period.

This slight decline in net revenue continued to be driven by reduced volume demand for certain prescription products, as well as lower demand for consumer health products, particularly for cough, cold and over-the-counter pain relief products.

However, over the last couple of months, we have seen business begin to recover and expect to return to growth in fiscal 2022 as commentated in our guidance. EBITDA margin in SOT grew 220 basis points over the fourth quarter of 2020 due to an increase in productivity and saleable product mix.

Slide 15 shows the results of our Oral and Specialty Delivery segment, which were again impacted by the voluntary recall of a single product in our respiratory platform in September 2020 that we had previously discussed.

And as previously reviewed, this product had notably strong sales in Q4 of last year following its February 2020 launch, and also included a product participation component, creating difficult comparisons over the periods.

There was an additional $3 million in recall related costs reported in the fourth quarter bringing the total to $32 million for the fiscal year. With that background, the OSD segment recorded net revenue of $186 million in the quarter, which was down 19% compared to the fourth quarter of fiscal 2020.

Segment EBITDA was $53 million, a 29% decline over the fourth quarter of 2021. When factoring up the net impact from the divestiture of our Blow-Fill-Seal business, and the acquisition of Acorda's spray drying facility in February, organic revenue declined 4% and segment EBITDA declined 11%.

Further, if you back out the revenue from the recall product in the fourth quarter of fiscal 2020 the OSD segment would have shown mid teens revenue growth this quarter, driven by growth in both commercial and development revenue.

The OSD segments fourth quarter results reflect continued momentum in our guidance proprietary platform, which grew nicely despite some lingering consumer health pandemic related headwinds.

Each quarter we disclosed our long cycle development revenue in the current year in order to provide additional insight into our long cycle segments, which includes Biologics, Softgel and Oral Technologies and Oral and Specialty Delivery.

In the fourth quarter of 2021 we reported development revenue across both small and large molecule products of $538 million, which is 51% above the development revenue reported in the fourth quarter of fiscal 2020.

Development revenue, which includes net revenue from certain COVID-19 related products approved for emergency use, represented 45% of our revenue in the fourth quarter, compared to 37% in the comparable period in the prior year.

As strong growth in our Biologics business included growth from the manufacturer of COVID-19 vaccines and therapies approved for emergency use, was the biggest driver of the year-on-year changes. In the fourth quarter our development pipeline led to 47 new product introductions for a total of 139 in fiscal 2021.

As shown on Slide 16, our Clinical Support Services segment posted net revenue of $105 million representing 21% growth over Q4 of 2020.

This notable increase while appropriately reflecting the many positive aspects that work in the segment should also be understood in the context of the segment decreased performance in the fourth quarter of fiscal 2022, 2020, when the distribution and packaging businesses were impacted by global lock downs and clinical trial disruptions due to the pandemic.

Segment EBITDA was $31 million or 35% increase compared to Q4 of fiscal 2020 and was driven by strong demand in our manufacturing and packaging and storage and distribution offerings. Segment EBITDA margin was 29% up 252 basis points over the fourth quarter of last year.

As of June 30, 2021 backlog for the CSS segment was $501 million, compared to $490 million at the end of last quarter and up 18% from June 30, 2020. The segment reported net new business wins of $119 million during the fourth quarter, a 14% increase compared to the fourth quarter of the prior year.

The segment's trailing 12 months book-to-bill ratio is 1.3 times. Moving to company-wide adjusted EBITDA on Slide 17, our fourth quarter adjusted EBITDA increased 30% to $348 million or 29.3% of net revenue compared to 28.3% of net revenue in the fourth quarter of fiscal 2020.

On a constant currency basis, our fourth quarter adjusted EBITDA increased 27% compared to the fourth quarter of fiscal 2020. As shown on Slide 18 fourth quarter adjusted net income was $209 million, or $1.16 per dilute share compared to adjusted net income of $154 million or $0.90 per diluted share in the fourth quarter year ago.

Slide 19 shows our debt related ratios and our capital allocation priorities. Our net leverage was 2.2 times at June 30, compared to 2.3 times at March 31.

We expect the acquisition of Bettera to increase our net leverage ratio possibly to as high or just slightly above our target ratio of three times because we will fund the acquisition to deploy in combination of the $967 million cash on hand and other liquid assets we are reporting as of June 30.

A partial drawdown of the more than $700 million of capacity we're reporting as available as of June 30 under our revolving credit facility, and potentially the issuance of new debt. We will naturally be leveraged from there providing us with plenty of flexibility to continue to pursue organic and inorganic growth opportunities.

As just noted, our cash and cash equivalents balance at June 30 stood at $896 million, and our marketable securities were $71 million, giving us liquid assets of $967 million compared to cash and cash equivalents of $953 million, and no marketable security as of June 30, 2020.

Moving on, our capital expenditures totaled $686 million in fiscal 2021 or approximately 17% of net revenue.

This is in line with our expectations as we accelerate our organic growth plans and customer demand and patient needs and we expect our level of capital expenditures to remain elevated as a percentage of net revenue in fiscal 2022, when we expect that CapEx will be approximately 15% to 16% of 2022 net revenue.

Free cash flow in fiscal 2021 was negative $253 million, despite the higher level of EBITDA generated in the last year. This was due to our increase in CapEx spending, and the cost of pandemic related precautions, such as increased inventory levels and other supply chain mitigation efforts, as well as higher net receivables.

In fiscal 2022, we expect to return to positive free cash flow as a result of our strong EBITDA growth and expected improvements in our working capital despite continuing significant CapEx investments. As a final note on the balance sheet, I want to call out a disclosure in our 10-K Annual Report we filed with the SEC earlier today.

You will see that as of June 30, we had one large customer that represented 15% or $155 million of our net trade receivable balance. This is an unusually high concentration on selected a single point in time at the end of the fiscal year.

I note that the customer significantly reduced this balance in the days following the quarter close and the balance is now well below the 10% reporting threshold. Now, return to our financial outlook for fiscal 2022 as outlined on Slide 20, which does not reflect the just announced and still pending acquisition of Bettera.

We expect full year net revenue in the range of $4.3 billion to $4.5 billion, representing growth of 8% to 13% compared to fiscal 2021. FX is currently expected to have a minimal impact on our revenue growth, as the declining euro is offset against the increase in British pounds.

We project that revenue from pre-existing M&A activity will negatively impact our growth rate by 1 to 2 percentage points at the divestiture of the BFS business more than offset the multiple smaller acquisitions completed in fiscal 2021.

We project organic revenue growth in each of our segments to be within or above the long-term growth range we had previously disclosed for each segment, leading to revenue growth at or above our new long-term revenue growth range of 8% to 10%.

For full year adjusted EBITDA, we expect a range of $1.13 billion to $1.2 billion, representing growth of 11% to 18% compared to fiscal 2021. I would like to remind you of the seasonality nature of our business, where revenue and EBITDA generation is more weighted to the back half of the fiscal year.

We expect full-year adjusted net income to $585 million to $650 million, representing growth of 7% to 18% compared to fiscal 2021. We also expect a fully diluted share count on a weighted average basis for fiscal 2022 to be in the range of 181 million to 183 million shares.

This projection counts our series A convertible preferred shares as if all were converted to common shares in accordance with their terms. We expect our consolidated effective tax rate to be between 23% and 25% for fiscal 2022. Now I'd like to close with a few comments regarding the revenue contribution from our array of COVID-19 response products.

First, all of that revenue is considered organic revenue. Second, we now expect particularly in light of the need to produce vaccine booster shots and address the growth and variant forms that revenue will have a multiyear duration.

Third, as John said in his opening comments, our net COVID related revenue in fiscal 2021 totaled more than $550 million.

While we do not plan to disclose a forecast for growth related to COVID revenue in fiscal 2022, given the capacity we have dedicated to COVID-19 projects that we've brought online in the last nine months we do expect continued growth from our work related to COVID-19 projects.

In addition, we now see innovative vaccines, particularly the newer gene based vaccines as a long-term strategic product area for Catalent, given the substantial partnerships we have built in this space due to pandemic. Operator, this concludes our prepared remarks and we would now like to open the call for questions..

[Operator Instructions] And your first question comes from Tycho Peterson with JPMorgan..

Hey, good morning. I'll start with one on Bettera.

It looks like this is basically 100% over-the-counter, is that correct? And then can you maybe just talk about how much of this was just, about broadening the portfolio or is there a chance you could leverage some of the technology into your kind of branded business as well?.

Yes, so first of all, this is clearly in the nutraceutical and nutrition category. So, there are no prescription products in there. And just as a reminder, and you know this well Tycho, that Catalent is a leading pharmaceutical services provider for both biopharmaceutical companies and consumer health.

So, we've always had incredibly strong consumer health franchises. If you go into, any CVS or Walgreens and just peruse the aisles, you're going to see Catalent franchises that Catalent has from a liquid gel standpoint as well as many other products that people don't know, are being manufactured by Catalent.

So, this has always been somewhere between 20% and 30% of our overall Softgel business, and it's been absolutely terrific. We've been looking to get into this area, honestly, for the last four to five years. We recognize it as an incredibly high growth area.

And we believe, given the knowhow and expertise we have from an overall gelatin standpoint, we thought that we might be able to do this organically.

But the truth of the matter is, is there is significant knowhow in capabilities, somewhat different from what we do in Softgels that necessitated us to go naturally, acquire one of the leading businesses in this overall area.

What we also love about it is that given the strong relationships that we have with leading consumer healthcare companies that we are already partnered with from a VNS standpoint that we're going to be able to leverage those relationships.

And then last thing I will tell you is, this is a capacity constrained area in high growth, and what Catalent does, just like we did with, Cook Pharmica, just like we did with Paragon, just like we're doing in MaSTherCell in cell therapy area, Catalent is an operating company that does things to scale, so we acquire assets and we did in the fact that this is a capacity-constrained area we really believe that we can grow this business into the leading manufacturer of this unique delivery platform, and honestly the margins are incredibly attractive..

Great, that's helpful. And then on guidance, in the near term obviously you're not providing any guidance around COVID. I'm just curious, though and the [indiscernible] obviously talking about the aggressive booster rollout plan starting next month.

Is that kind of baked into the near-term outlook and do you think the COVID tailwinds could be higher or in line or below what you saw in 2021? And then longer term, you're not really kind of quantifying the EBITDA margin expansion. Previously you talked about 8% to 11%.

I'm just curious if you could give us any kind of directional color there? Thanks..

Yes, sure.

So first of all, it's becoming increasingly clear that COVID vaccines and also boosters are going to be part of the way forward here, literally when we're sitting with only 50% of the population of the world vaccinated and the variants coming out, we see as we've noted in our prepared remarks that vaccines are really going to become part of actually the core Catalent business.

I will tell you that all of the current contracts and take or pay and forecasts that we have from our customers with regard to the vaccines are contemplated in our current guidance. Obviously, there are situations where that could actually go up.

It just depends upon what actually happens there, but all of the current information is currently baked into our overall guidance, so I'll pass it over to Tom for the back half of your questions..

Yes, I agree with everything John said there related to guidance. I would also add Tycho, you're right, we've didn’t specifically highlight long-term EBITDA growth rates, but did speak to the continued margin expansion we expect to see as you’ll remember we mentioned working towards a 28% EBITDA margin for the business by 2024.

We continue to believe that's a good target and are on pace for that. And we'll continue to see EBITDA growth rates in the long-term exceeding that of revenue growth with 8% to 10% revenue outlook we put out there..

Okay, that's helpful and then one last one before I hop off, but cell and gene, you highlighted around the capacity expansion in the RheinCell deal as well.

I'm just curious, as you look at your portfolio, do you have what you need, do you still see gaps? And then, you've talked in the past about favorable upfront economics capacity, reservation fees, given a lot of the capacity that's going to be coming online, do you think that model still holds?.

So first of all, I would just say that the dynamics in the gene and cell therapy space continued to be extremely robust. I think, over the last two years, we've really added critical pieces to our portfolio in the cell therapy space getting additional manufacturing facilities and capacity. We entered into the plasmid DNA space.

And now, obviously, with the acquisition of RheinCell we have our hands on kind of iPSC cell bank.

So, we really think that we have a strong portfolio, but I will tell you that we have a very strong science and technology team that is forward-looking and continues to understand where the technology is going and where Catalent can add additional, I would say, technology and capabilities into its portfolio, and we're going to continue to do that.

I would say that broadly speaking in the Biologics area, it is going to continue to take a large part of our overall growth CapEx for the company, because we continue to see extremely strong pipelines, and in this business as we've seen over and over again, if you have the right capacity at the right time, you actually garner and win that business.

Our gene therapy business is moving much more mainstream in terms of making products to make EBITDA.

And I would say that the, reservation fees that were a significant component of the early part of the business when they're when we were literally dealing with a handful of suites within Catalent, well it will be somewhat part of the model, but it will not be the main part of the model.

The bottom line is, when we have capacity customers, while we're able to actually bake the right deal in terms of what we would call site preparedness, equipment preparedness, and if a customer has long-term forecast, and once suite from us for a certain period of time, we're absolutely going to go ahead and get reservation fees.

But I would say that, that was much more of a model in the early days, and now we're moving towards a model of just making literally hundreds, hundreds of batches in our gene therapy business. So now, a lot of the money is flowing from purely the work that we're doing, which is pure reservation fees..

Okay, very helpful. Thank you..

Your next question is from Jacob Johnson with Stephens..

Hey thanks. Congrats on the quarter. Maybe just a similar question what Tyco just asked, but actually in a different way. The Bettera deal is a fairly significant deal to bolster the SOT segment after a variety of deals on the Biologic side.

I mean, is this a signal that you have the majority of the Biologics capabilities you need at this point, so we should think about the investments being largely organic on that side of the business in the near term?.

Well, clearly I would say, we're always on the hunt for great Biologics asset period. However, with the platform that we have, basically built through acquisition and attitudes, from an organic standpoint we really believe we have a footprint where organic investment is going to continue to fuel our growth.

So, in today's earnings prepared remarks we talked about several significant expansions, whether it's in Anagni, whether it's in Limoges, I will say they're significant CapEx projects going on all across Catalent and obviously we're going to be seeing a high level of CapEx spend again this year, but Catalent really does continue to be very active in the M&A market.

We do feel that we have really the right set of assets on a Biologics front and quite frankly, by being able to pivot here with really an exciting acquisition is going to bolster our SOT business segment from 3% to 5% to 6% to 8%, and incredibly attractive margins in a capacity constrained environment, where this is what Catalent does, we operate at scale.

So Catalent’s ability to scale up that business and drive to be number one in this innovative delivery platform is really what we have our sights set on. So, what I really do like about Catalan is it's a well balanced business.

And quite frankly, we've really been taxing pretty aggressively through the pandemic into vaccines, our biologics and gene therapy segment and now this allows us in our SOT segment, and to some extent, our other segments to be able to use our leadership to build out a part of the business that's always been core, a critical platform, has paid the bills with cash flow for many, many years, again absolutely a terrific acquisition for us.

And we're excited to have the Bettera team as part of Catalent with their expertise and knowhow..

And Jacob, I would only add to this one, or just around the most of the market profile, John said in his prepared remarks as well as here around the attractiveness of the margins for Bettera. But they're actually accretive, not only to the SOT segment, but to Catalent overall. So very strong financial profile here of the pharma [ph] business..

Got it, good. Thanks for that, John, Tom. And then maybe just a follow up on that. John, you mentioned an Anagni, you added drug substance capabilities there. You have both of the, both substance and product capabilities, can you just talk about the synergies between having both those capabilities in a single cost..

No, it's a very big deal. Thank you for pointing out Anagni. First of all, I just want to, just say thanks to the Anagni leadership team. What they have done over the last 18 months has been absolutely phenomenal. You know, here in the U.S.

we talk a lot about our Bloomington site, but the Anagni site has literally been a marquee site for the European COVID-19 vaccine efforts. And the team has really delivered flawlessly literally more than 100 million vaccine doses that have come out of there, so just a terrific leadership team.

I can tell you that the synergy between drug substance and drug product is huge.

Actually, we have an offering for it within Catalent, it's called one bile [ph] and our ability to basically do cell line engineering, do drug substance scale up into phase one, and then be able to put that into a finished drug dosage forms format for clinical trials and then ultimately scale up for manufacturing is absolutely huge.

There are relatively few non-CDMOS that have that capability.

Our biopharma customers, the larger ones do, but from a CDMO standpoint, I think Catalent is really up there with only maybe one other CDMO that is able to have drug substance or drug product and even better if you can have it all in one campus, which was what we'll be able to do at Anagni.

So, we've kind of announced the 2x2000 leaders, but we're going to have the ability, obviously, to scale that up much more significantly. And I think you're going to see Catalent become an extremely strong player from a Biologics drug substance and drug product standpoint.

Back to the previous question with regards to M&A and biologics, this is an area where although we have some terrific assets between Brussels facility or Limoges facility or Anagni facility, we're investing we're investing from a drug product and now also a drug substance standpoint, if we could secure additional drug substance and drug product assets in Europe, that would clearly be high on our priority list and we have been participating in quite a few processes, but haven't been able to land that one yet.

So we're clearly being aggressive on the overall organic slug. But back to the question, the synergies between drug substance, drug products in the one bio offering we have is we're bringing more and more customers specifically, with the small to medium sized customers who want to have one stop shopping from the standpoint is very significant..

Got it. Thanks for taking the questions..

Thanks..

Your next question is from John Kreger with William Blair..

Hi, John..

Hey couple of CapEx questions. John, you mentioned Bettera and that whole space is capacity constrained.

How is the available capacity in that asset that you're getting? Are you going to have to dedicate a fair amount of CapEx to keep up with the growth?.

Yes, so first of all, Bettera is really is in a massive growth phase as its stated they're growing at 20%. They have several in flight CapEx investments. I'm sure at some point we'll be talking on these calls about something called a Mogul [ph], which is really the workforce for the gummies area.

And we will be investing a digital CapEx to scale that business, but I will tell you that the CapEx levels of spend will be much lower than anything that we see from an overall Biologic standpoint and lower than what we see from an overall Catalent standpoint, and will probably be slightly higher, but more in line with what we've traditionally spent in our SOT segment, really making it again a strong cash generator and it’s really attractive margins for the company..

Great.

And then, also, John, I think you told us that CapEx in the coming year should be 15% to 16% of revenue, should we start to think about that as sort of the new normal for the company longer?.

No, no, no, no, look, we have to sit back and remember that COVID was a massive accelerator for Catalent from a strategic standpoint. It actually accelerated our strategic plans and we brought on capacity earlier than we normally would have.

And then that capacity, post let's say a lot of this volumes of vaccines, and three, maybe four years is going to be reapplied to the overall company.

So I think, we're seeing here over the first couple of years, obviously this accelerated CapEx spend, but as we've kind of modeled out in our strategic plans, we see our CapEx spend moving much more towards that higher single digits.

Our CapEx spend that we had prior to going into overall COVID I think that's the right way to look at the overall business. That being said, what we provisionally see is, again Catalent is a company that buys high growth assets and then scales them up.

And I will repeat, we are going to be working to be the number one provider in the gummy categories over time. So we take the assets, and we invest in them to make them leading franchises. So if we were to not acquire anything else, I would see our CapEx moving down to that high single digit level. But again, as we acquire assets, we do invest in them.

So it will really be dependent upon what assets we get John, whether or not that's going to, we'll see a slightly elevated area.

But again, we love these projects, because the IRRs and cash on cash returns for the investments we're doing on the growth side, specifically in Biologics, gene therapy and now in the gummy area is going to be pretty fantastic..

Sounds good. Thank you..

Your next question is from Dave Windley with Jefferies..

Hi, thanks for taking my questions. John, I appreciated the emphasis you put on that answer to John. CapEx intensity will come down good to know.

I'm wondering on the longer term growth algo, I'm thinking about your Biologics and COVID revenue within biologics and the handoff of that over the long-term and is the extension of a booster market, does that make that, that much easier to manage that it's not going to be so sudden, but rather a longer more protracted handoff to other products in the long-term?.

Sure. So first of all, we do not see a COVID clip in Catalent. We really came out of our strategic plan, so we modeled out and this was in April. A lot of things have happened since then, but we've got about three different scenarios.

And right now, I will tell you that our current modeling against expected case is actually higher given the fact that we see vaccines for COVID, specifically being really much more of a sustaining and enduring revenue for Catalent, specifically with the advent of boosters that will come out lowering the age of those vaccines plus the large part of the world that still needs to get vaccinated.

We're also seeing a change in formats, where we want fewer doses per vial. We're seeing a push towards going towards prefilled syringe and actually all those things actually led to increasing volumes for Catalent as you move towards your single dose or lower volume formats and also boosters.

The other thing that I would tell you Dave is that Catalent has now put itself into the vaccine category in a really substantial way.

It was always, I would say a significant category within Catalent, it's now moved up within our overall look at the -- of the overall categories within Catalent and with the capacity and capabilities and quite frankly, the strong brand reputation of being able to deliver this crazy tumultuous time of COVID vaccines, it's elevated our status as a CDMO in the vaccine category.

We also see that mRNA is not just going to be a COVID vaccine, therapeutic platform. As you know, Moderna had quite a large pipeline, if you will, of mRNA vaccines. We're partnering very closely with them with COVID. We certainly expect them as well as our other partner J&J to be using our expertise for non-COVID related vaccine items.

We're terrible detail here the call, but from a Catalent standpoint again, COVID was an accelerator of our strategic plans. And quite frankly, our growth and our ability to upgrade our long-term guidance now from 6% to 8%, to 8% to 10% revenue growth, I think is a testament of that.

And also points to the fact that as you know, we've held on to our long-term growth guidance for quite some time since 2014 before bringing it up with the acquisition of Paragon and now bringing it up here in this earnings call.

So that alone should tell you what our outlook is with regards to the growth rate of the company and how we see that teams continue to play a strong role into the future without any, I would say substantial plus in terms of the business since we'll be dove tied tailing in some of our strong, strong pipeline along with the continued sustained supply required for the COVID vaccine.

Sorry for the somewhat belabored answer, but it's a really important question and it's important for me to be able to pass along all of that information broadly to the analysts and investors..

Yes. Thanks for the context there. I appreciate that. Quickly on margin, margins were strong, the perhaps the composition of those was a little bit different than I and others expected in the Biologics segment.

Could you comment on whether there was a mixed change there or you mentioned reservation fees in the context of another answer? Was there some impact that caused the Biologics margin to drop a little bit from what we've seen in the last couple quarters?.

Yes, Dave, Tom here. So just under 31% EBITDA margin for the fourth quarter here for the business, a great performance from where we were a year ago. You're right, sequentially it is down from where we were at the third quarter level. I'll just point to a couple of things here.

We have to remember that this is still primarily development business and with that does come some I would say volume related lumpiness that can have a negative impact on margins, but the fact that we're seeing the sustainable margins within this business rose 30% is something right in line with where management expected it to be.

The other thing I would highlight here is component sourcing continues to be a growing revenue stream within the business. We do have a path through revenues associated with some of the components used for the vaccines, that comes in at a very low margin profile. And we're seeing that increase, having a little bit of a drag.

The other thing I would say is, we think about the level of maturity within our cell and gene therapy business, cell therapy primarily, the investments that we continue to put into that business or I would say are relatively substantial from an operating cost perspective and do have a little bit of a headwind to the margin profile of biologics.

But again, I just want to highlight the 31% that we saw in the fourth quarter, and again, right in line with where we expected that to be from a management standpoint, maintaining sustainable margins of up 30% within Biologics..

Got it. Thank you..

Your next question is from Paul Knight with KeyBanc Capital Markets..

Mike on for Paul. First one, John, it's nice to see Catalent continue to build its presence in Biologics in Europe with the Anagni announcement. Just as a follow up, you're obviously building out significant past capacity in the U.S.

related to viral vectors, but given the capacity constrained in that market, when did it start to make sense to have a presence there for viral vectors giving your significant cell therapy and plasmid DNA presence already there?.

Actually, thank you for that highlight and I probably should have also noted that, that is also a category that we're looking at within Europe. Clearly, we've got a strong footprint for cell therapy across our Gosselies, Belgium campus now, and also Houston and we have a huge capability and viral vector manufacturing in the Baltimore area.

But if we were able to get our hands on the right asset from a viral vector manufacturing standpoint in Europe, that would also be a priority for us. We continue to see an extremely strong pipeline in the overall our gene and cell therapy space. And I do believe that, that having assets in the right one area are going to be key.

We love being involved to market and to that really is kind of a center from an overall I would just the virology standpoint, but clearly, Europe will also be an area where we're going to continue to look for an asset there.

And if we're not able to get our hands on one we may pursue the organic build out route that, that would obviously take some additional time. So thank you for actually highlighting that..

And then just following up on Tom's past comment with respect to gene based vaccines, specifically mRNA kind of having a long duration for Catalent outside of COVID, these types of vaccines and therapeutics are more challenging to deliver to the body, you have purchased the upstream tech with Delphi and historically been strong and built and finished with therapeutics and vaccines, but and then obviously, you have the viral based vaccine delivering technology with Paragon, but do other delivery technologies like lipid nanoparticles and electroporation kind of makes sense for an R&D perspective, or potential M&A perspective for Catalent? Thank you..

Yes, so certainly, I would just say that, our LNP, or lipid nanoparticles are a big part of the secret sauce for mRNA delivery and we know, with regards to one very large specific provider of that they kept a lot of that in-house.

And then with another provider, they are partnered, but there's a lot of reps around, I would say the knowhow and the intellectual property of those LNPs, it is an area that is high on our list. I've actually had some dialogues with one large customer about the ability to Catalent to be their LNP provider and broad based on mRNA sampling.

So we're early on in those discussions, but it is a key area. I have to emphasize, again, I mentioned our science and technology team is constantly on the hunt for and looking out with advanced radar to understand what are the key technologies and key growth areas that Catalent needs to be participating in.

And, an example of that is the RhineCell acquisition, which again, we think it's going to be key for us in the cell therapy of regenerative medicine areas. So we'll continue to see Catalent bringing in those types of technologies into the company.

And certainly the mRNA space is going to continue to be, I mean, with two approved products here is clearly now it's going to be a therapeutic category, where we're all going to be watching what they're going to be able to do beyond vaccines. And the great news is, is we are partnered with currently one of the best the best of best in this area..

Great, thank you for the time..

Your next question is from Sean Dodge with RBC Capital..

Thanks. Good morning. Maybe going back to Bettera, on the margin John you said incredibly attractive already accretive to the consolidated total.

Is there any more specificity to share there? And then just to better understand the trajectory or potential, I guess, if we roll forward a few years of 20% plus revenue growth, is there a lot of opportunity to continue scaling those higher or with the tight capacity constraints are things there as good as they could or shouldn't be, it's just more adding revenue past those margins?.

So first of all, we just make the statement that this is a category that has Biologics or higher margins to it. So when we talk about it being accretive and then accretive to overall Catalent, that should give you signal. Let me just back up a little bit here, gummies have become the dominant experiential delivery format in BMS.

And the BMS retail market is growing three times faster than the rate of over-the-counter. It's actually now larger than over-the-counter. Through the pandemic, and even running up to the pandemic wellness is become something of a personal responsibility, and people are really going after nutritional and nutraceutical and other functional areas.

And gummies have been the format in fact, launching the most number of products in this category compared to everybody else, gummies have grown more than 20% CAGR per year for the last four years and now represents more than 30 billion doses.

The BMS segment is growing in mid single digits, but gummies despite representing less than 20% of delivery formats in the comments for greater than 50% of total BMS growth over the last several years, nearly 70% is outsourced with a limited number of CDMOs and its capacity constrained. And again, what this catalog do well, we do things at scale.

So our ability to scale this business appropriately, to be able to not only grow with the market, but to grow substantially faster than the market that is capacity constrained, compared to competition is really where we're going to be able to drive this to be kind of the number one franchise out there from the CDMO standpoint, that's why we got into this.

So it's really, again, a terrific business for us. It is very high margins and one that Catalent can get its hands on, integrate, we have very detailed plans and in scale..

Okay, and maybe scale is a little bit of the answer to my next question, but it's easy to see how Catalent can differentiate itself and sustain high margins and Biologics and cell and gene therapy, just given the scientific vigor involved there.

On the Bettera side, maybe just you need to talk a little bit more about what are the differentiating factors in gummy or the neutroceutical market? What is the competitive outlook like there?.

So to give you a sense for the level of difficulty with all the capabilities that we have within Catalent, specifically in Softgel, gelatin, and the franchise that we've had there, in the BMS standpoint, we were unable to attack this space organically.

And the reason is, there's an incredible amount of knowhow, in terms of developing these products with the right texture, and flavors. And so this is not something that you can just buy a machine and go, it's really built upon the capability of the team to formulate those products.

And the other part of this is its status, the ability to formulate, but proactively formulate these products because essentially, what customers are buying are off the shelf products that have been already proactively developed.

So forecasted for Catalent with all of our skills and capabilities, we really ran into a wall in terms of being able to build this business organically over the last five years and ultimately went down the intergenic fund, found one of the leading players, we believe they're the number two player in this space.

And our goal is to make them the number one player, pure and simple, so again, very substantial. I know that some people that don't understand Catalent very well will look at all of the Biologics, gene therapy and cell therapy acquisitions that we've done and say, I don't get it.

But that's because they don't understand the fact that we are supplying to biopharmaceutical customers and consumer help customers in our consumer health helps customers have been a stable base for this company for many, many years.

In fact, what the team did had been here for 20 plus years that Catalent literally developed through our software business to cough and cold categories that we now see ubiquitously on the shelves, the Walgreens, Walmart's and CVS. So this is in our DNA. It requires innovation. There's a different clock speed that's required in this category.

And we have long standing relationships with all the big six players in the consumer health category, which again, the BMS category has been growing faster, three times faster than OTC. So for Catalent this actually was a natural.

It is that slightly late acquisition into this very fast forward space?.

Okay, guys that's great. Very helpful. Thanks again..

Your next question is from Juan Avendano with Bank of America..

Hello, thank you. Just one question from me. You alluded to the change in the COVID vaccine packaging configuration in a previous answer.

Can you tell us how is the potential of revenue and margin from a few of those format compared to the current format? And by when would you anticipate this change to come into effect?.

I'll answer this at a high level that says that from a channel perspective, we are not paid for those. We are paid for cell. So if you have cells that are at a lower number of doses, it means you genuinely need more cells.

So from an overall Catalent perspective, it's a positive tailwind as you go to formats that have fewer doses per vial, or potentially into the prefilled syringe format, and then you can expect those to be [indiscernible] and strong margins..

Thank you..

Your next question is from George Hill with Deutsche Bank..

Hi good morning, guys. Thanks for taking the question. I'm going to come back to the topic of M&A one last time. John and Tom, and maybe just talked about, John you used pretty aggressive language earlier as it related to the company's M&A profile.

I guess, can you talk about the processes that you went through to the company wasn't able to get to the goal line on kind of what was the barrier there? Was evaluation? Was it bidding environment? Was it not the right asset? I mean, you guys have been so successful, I'd kind of like to hear more about what went wrong in the M&A process?.

I'm sorry, I didn't quite get the question about what went wrong on the M&A process.

Can you just talk a little bit, would you explain?.

Yes, sure. You talked about a couple of bidding processes where you guys couldn't get to the goal line and you guys have been very successful in M&A.

I guess, I hear more about what went wrong when you guys couldn't get deals just kind of been the barrier?.

Yes, nothing, nothing went wrong. It's usually a case of us being disciplined acquirers, both in terms of valuation. I would say nothing has gone wrong in our process. At some point, the valuations get to a point where they didn't make sense from an overall Catalent perspective, but I would just say that our processes are incredibly strong.

They lead to the string of acquisitions that we've done, starting with Cook Pharmica, through Paragon, through MaSTherCell, through all of the campus that we've built out in Gosselies. But, again, doing M&A requires a certain level of discipline so that, at some point the value for the asset does doesn’t make sense and we kind of move on.

So, just put this under the category of discipline to acquire where we moved on, and as you've seen we've taken a path that doesn't limit us by expanding pretty quickly, organically in the BMS facility that we purchased that's an Anagni as well as expanding our Limoges facility.

So we'll continue to, aggressively look for those assets, but M&A is not a purely deterministic activity. It involves a lot of considerations in terms of moving forward in the process..

That's kind of what I expected. I appreciate it. Thanks, John..

There are no further questions at this time. I will now hand the call back over to Mr. Paul Surdez the CEO [ph] for final comments..

Actually, John Chiminski will conclude here. Thanks, operator and thanks everyone, for your questions and for taking the time to join our call. I'd like to close by highlighting a few key points we covered today. Fiscal 2021 was an incredible year for Catalent.

We didn't just outperform our expectations for 2021 during a global crisis, but our rapid response to the pandemic gave us the opportunity to do real good for the entire world provided an insightful demonstration of the depth of our capabilities, significantly elevated our brand, helped increase our engagement with our employees, as we banded together to meet the challenges of the pandemic and enabled us to accelerate our strategic plans and investments.

In fiscal 2022, we expect strong revenue and EBITDA growth again, driven by continued growth in our biologic segment, as well as a return to growth in our SOT and OSD segments.

Because of the investments we've made over the past few years, which included adding high growth franchises like those we've acquired in our Biologics segments, and like the one we now anticipate with Bettera, with stronger and better positions for long-term growth than ever before, as evidenced by the increase in our projected long-term net revenue growth target to 8% to 10%.

Finally, I'm very proud of the team of more than 17,000 in the way we've lived up to our mission to help people live better, healthier lives.

When we look back at our last fiscal year, we know that across the 1400 development programs we've had and the 7000 products we manufactured on behalf of our clients, we help enhance the lives of millions of patients around the world. Thank you..

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect..