Hi, this is Paul Knight, Analyst at KeyBank. With us today, we have Paul Surdez, IR, Head of Catalent. Thanks for being here, Paul. And Tom Castellano, Chief Financial Officer. We will start with Tom doing a brief overview. If on your chat, you can enter questions or email them to myself as well. But with that, Tom, I'll let you begin. Great. Thanks, Paul. And thanks, everyone, for joining. Happy to be here to represent Catalent. Just a couple of quick opening comments for me. We're coming off of another strong quarter in our second quarter here in fiscal 2022, where we continue strong financial momentum. We had 32% organic revenue growth and 38% organic adjusted EBITDA growth during the second quarter. And that was really driven by our biologics segment, which continues to, I would say, really carry the load from a financial perspective. We saw nearly 60% organic revenue growth in our biologics segment, which is certainly partially attributable to some of the strength we've seen around COVID-19-related work. However, biologics isn't the only area of growth within the company. We continue to see improving financial performance from our SOT and OSD segments, both of which returned to organic growth in 2022 after a challenging 2021. Those businesses were negatively impacted by some of the COVID-related headwinds. We've also completed the acquisition of Bettera during our second quarter. That did contribute financially in that quarter was incremental to the organic growth. The integration of that business is progressing nicely and according to plan. In terms of the full-year view, after the strong Q2 results we saw, we did increase yet again our financial guidance for fiscal 2022 on the heels of our second quarter, the second consecutive quarter in which we increased our guidance. We raised both the low and high ends of that range. And we also tightened the range given that we only have five or six months of the year remaining at the last time we put the guidance out there. We now expect revenue growth in the 19%-22% range and adjusted EBITDA growth in the 23%-27% range. That assumes 100 basis points or so of margin, EBITDA margin improvement versus our fiscal 2021 levels. A couple of other quick points to make. We did increase our fiscal 2026 long-term outlook or introduce our fiscal 2026 long-term outlook as part of the JPMorgan conference in January. As a reminder, we managed to achieve our fiscal 2024 long-term outlook targets by fiscal 2022, which was the $4.5 billion in revenue, EBITDA margin of 28%, and our biologics business moving to 50%. We have already achieved the biologics piece of 50% as well as our $4.5 billion in fiscal 2022 versus the 2024 long-term outlook. In terms of 2026, we've said that we expect revenue to be more than $7.5 billion by fiscal 2026. That includes organic growth rate and some potential contributions from M&A activity as well. We have talked about adjusted EBITDA margin of approximately 30%. Lastly, I would just say we continue to have a very strong balance sheet, the strongest balance sheet that we've ever had as a company, quite frankly. We're leveraged at just under three times, 2.8 times as of 12/31. That's below our long-term leverage target of 3.0. We have more than $900 million in cash on the balance sheet, so well-positioned to continue to fund both organic and inorganic growth initiatives across the company, so with that, Paul, I'll turn it over to you for some Q&A. Thanks for the time to give that brief opener. Hi, Tom and Paul. If you just give us a little history, what were the signals that you need or wanted to get into biologics? What's your, in the second half of that, so the history on that? And then the second is your view on biologics for the next several years. Sure. So I wouldn't say there was much of a pivot here from a company strategy perspective in terms of entering into biologics. Biologics has always been part of the Catalent portfolio. I've been with the company for 13 years, although only in the CFO seat for about 9 or 10 months or so. But when I first joined the company, biologics was a single-digit percentage of revenue from a contribution standpoint. And what we really had at the time was some small-scale drug substance manufacturing and I would say some small-scale drug product manufacturing as well. But we did see that the market was headed towards large molecule and started to continue to really invest both organically and inorganically in large molecule to the point when we went public in 2014, biologics at that time was about 10% of revenue. I mentioned in my opener where we stand today through some of the tailwinds we've seen as a result of the role we've played through the COVID pandemic. We now have about 50% of our revenue that's tied to biologics already. Again, that was a target that we had initially hoped to be able to achieve by 2024. We stand here today in the middle of our fiscal 2022 year and have already been able to see that. That was a very, I would say, intentional series of investments that we've made to be able to drive to that 50% biologics revenue. It was both organic and inorganic. I think it really started with the acquisition of Cook Pharmica that we did in 2017. This was a premier sterile fill finish asset out in Bloomington, Indiana. That was, I would say, underutilized, but one that we had our eyes on in terms of how that was built out and the capability that that business had. And in 2017, we were able to acquire that for, I think it was $750 million or so there. But it was our, I would say, initial large-scale investment in sterile fill finish capacity. And we've since scaled that up further with organic investments that we've made around sterile fill finish. And this has been where we have benefited the most from the COVID-related tailwind and the role that we've played through the pandemic. All of the vaccine-related work that we have done has been through sterile fill finish. We are not tied to drug substance on the COVID vaccine. We have done some smaller drug substance related to COVID-related therapeutics as well as sterile fill finish. But where we've, as I said, really benefited with some of the names that have been tied to Catalent, like a Moderna, for instance, has been on the sterile fill finish side, and had we not acquired that Cook Pharmica acquisition, we would not have been able to support the needs of those customers in the way that we have over the last several months. I would say we've also added other investments through the years here to build out biologics capability, including organic investments and further drug substance. We brought on a third train within our Madison facility, which is tied to DS, drug substance manufacturing, as well as invested and brought online a fourth and fifth train within the last year and a half or so that we're in the process of ramping up utilization on. Lastly, I would say the investment we made around our Anagni facility, which was a sterile fill finish asset that we had acquired from Bristol Myers Squibb, BMS. We've added to that through further organic investment as well. And when it comes back to the decision point that Catalent has made to invest in sterile fill finish assets, we really understood the needs of the market. We were not seeing a lot of customers that had sterile fill finish assets. We were seeing a shift towards more large molecule biologics program, not only in our pipeline, but in the pipeline across the industry. I think if we look back to when I joined the company, it was probably something like 60% of programs in development were small molecule, 40% of them were large molecule or biologic. And I think we stand today, it's probably closer to 50/50. And we can see a further shift over the next five years to something that's maybe 60% large molecule. But small molecule is certainly not going away. It continues to be an area of investment for us and an area of investment for our innovators or our customers. But we're certainly seeing biologics become a larger portion of the development pipeline. And we felt like we needed to invest in order to be able to support the needs of our customers and essentially move with them with that shift. But as I said, Paul, we've been really more focused on the sterile fill finish side. We do have drug substance capability. But sterile fill finish has been where we've really earned our keep, per se. And I didn't talk about this much. I'm sure we'll get into it in some future questions. But also cell and gene therapy, another area of our biologics business today in which we've both added to the portfolio through inorganic investment, the acquisition of Paragon, the acquisition of MaSTherCell, but also through organic investments that we've made to support the growth related to our gene therapy portfolio of viral vector manufacturing and even the manufacturing of plasmid DNA. So significant area. So I know a long-winded answer there, but thought it was important to really highlight all of the different capabilities that Catalent has built through a series of organic and inorganic investments to be able to support the shift that we see to large molecule and biologics across the industry. Tom, could you talk about fill finish? You're the world leader, is my understanding or impression. The other is we've had vendors into that sector say how difficult it is to be a provider of fill finish. Could you talk about your position and why it does seem to have a significant barrier to entry? Yeah. No, great question. Look, I certainly view Catalent, and I think our customers do as well as an industry leader in sterile fill finish. And that's been through, as I said earlier, a series of investments that we've made both organically and inorganically. But sterile fill finish is underappreciated, I would say, by the layman. In terms of our customers, the innovators, they certainly understand the challenges and complexity associated with it, which is why we see very few of our customers, whether you're talking about even as large as large pharma, but very few of our customers that have their own in-house capacity and capability to do sterile fill finish. And when we're talking about sterile fill finish, we're talking about either prefilled syringes, vial manufacturing, lyophilized cartridges. To be able to do that is one thing, but to be able to do it at scale to meet the needs of high-volume programs for our customers is really, really challenging. Maintaining sterility through the entire manufacturing process and to be able to do that, as I said, at scale is not something that everyone can do. I think our strength here has been shown through the role that we've played in the pandemic and some of the key strategic relationship we've built with customers like a Moderna here through the process and being able to support their needs from a sterile fill finish capability perspective. The market dynamics around sterile fill finish are extremely attractive for the reasons I mentioned, the fact that it's so difficult and that customers don't typically have the interest in building out that capability, but also don't necessarily have the pipeline of programs and molecules and the volumes necessary to justify a capital deployment in that area, so we're actually seeing, I would say, competitors run to this space as well, but we're certainly, I would say, benefiting from the leadership position that we have today, the track record that we have in terms of capacity and capability, and the role that we've played through the pandemic has been an absolute accelerator for us in terms of building what I would say is the strongest business development or new business pipeline on the sterile fill finish side of things that we've ever had before. A question that's come in is regarding fill finish. And it's about one part of that market is still in-house at pharma. And I think the more complete question would be biotech. I mean, do people really want to tackle this in-house, particularly in biologics? Look, I'll never say never, but I could tell you I'm certainly seeing in terms of customer relationships we have, research that we're doing around the industry to understand the environment. We're seeing customers being more willing to add drug substance capability, bioreactors, single-use bioreactors within their portfolios to be able to support their own internal capacity than we're seeing them add sterile fill finish. It's not only difficult to tackle, but as I said, the equipment is expensive to be able to have the pipeline necessary to support the demand and build out that in-house capability. But really, expertise to be able to do that for what could be a program or two, it's a lot easier to be able to rely on an industry leader, a CDMO that does this every day, that understands the challenges associated with sterile fill finish. So it's hard for me to say exactly what the insource to outsource ratio looks like, Paul, but I would say it's heavily weighted towards outsourcing in my view. It's nearly 100% outsourcing when you're talking about smaller biotech. We're certainly not seeing investments there. There's certainly some large pharma companies that I would say have had historical capacity that they continue to utilize. But we're also seeing some big pharma companies looking to shed capacity. An example of that is the Anagni site in Italy that we acquired through BMS. That was a sterile fill finish asset that they had within their portfolio and didn't see the demand profile to be able to fill that facility there. So looked to sell that essentially. And we were in a prime position to be able to acquire that business. And that really we benefited from having that capacity in Europe through the COVID pandemic as well. So I don't have the exact ratio, but I will tell you we're certainly seeing much more of a trend towards outsourcing around sterile fill finish here and why we're also seeing competitors in the space looking to add capacity and capability as well. Is there a notable second or third place player in the industry? It's hard to say. I would say we certainly do see Thermo in this space to an extent. I would say there's a company in Europe that's privately held called Vetter that has a very, I would say, strong reputation there. I believe they're family-owned and operated in Germany that has a strong reputation in this space. But there's some fragmentation here as well. And then you're certainly seeing some others look to get into this space either as new capability or capacity or having something small and looking to scale up on that. And like I said, that's a challenging proposition to be in. This is a very difficult manufacturing process. And to be able to do it at scale in the way Catalent does has been a significant accelerator of our pipeline. As I said, the role we've played through the pandemic has been evidence of our capability and capacity. Your long-term 26 goal is off of what? Off of this or last year's revenue level? Yeah. So we've talked about an 8%-10% organic growth rate organically for the company. I think if you did the math, you'd notice that that probably, if you do that off of our fiscal 2022 guidance, it leaves you a little bit short of the $7.5 billion. And I think the way that we close that gap is either through M&A. We've not committed to exactly what we would commit to or what we would contribute from an M&A perspective in terms of number of deals or revenue contributions. But likely, we could see years of outsized growth outside of that 8%-10% range that can certainly help contribute to that more than $7.5 billion of revenue that we've talked about by fiscal 2026. I would tell you, Paul, before we go out and commit to a number like that five years out, we slice the onion many different ways and look at how many different paths do we have to achieving a $7.5 billion revenue number. It's something that we see very many ways that we can get there. I think we've talked about COVID-related revenue not being a meaningful contributor in those out years. We don't need COVID to continue to contribute at the way it has been for the last year to two years for us to have line of sight to $7.5 billion of revenue. That's a strong statement for us to be making here. It really speaks to the role that we play around the industry, the pipeline that we have across both small and large molecule, and the company's position to be able to continue to provide high-quality product to customers and ultimately patients across both small and large molecule. Obviously, the core of biologics has been monoclonal antibodies, but a lot of excitement around cell therapy, interest obviously developing in mRNA to kind of touch on those three segments of the biologics market. Sure. I mean, those are all areas that we're capable and able to play and participate in in terms of where the market can potentially head. What I would tell you is maybe I'd like to just take a step back and dissect a little bit of our 50% of our revenue that's tied to biologics in terms of the contributors to that by each of those modalities or offerings that you've mentioned, so just to use round numbers, if Catalent was to be a $5 billion revenue number and 50% of that tied to biologics, the $2.5 billion of revenue that we'd be talking about is first and foremost, the largest contributor to that is our drug product capability and sterile fill finish, where we spent a lot of time talking about. And we're able to do sterile fill finish on MABs, on viral vector gene therapy products, and on mRNA as well, as we've seen through the COVID pandemic and the partnership with Moderna. Taking a step back there from drug product, our gene therapy contribution, where we're talking about viral vector manufacturing, is our number two revenue source within that biologics segment. Not quite as high as what we're seeing from our drug product business, but I would say a close number two here in terms of viral vector manufacturing, manufacturing of plasmid DNA as well that contributes to the revenue stream there within biologics. Our third contributor, I would say, is our drug substance business. This is where we really have a site here in Madison, Wisconsin, where we do small-scale drug substance monoclonal antibody manufacturing that is typically some 5,000-liter single-use bioreactors that we have 2x2500. We have a third, a fourth, and a fifth train that we've added there over the last two months there. That's a distant number three in terms of its revenue contribution for us that ties to that $2.5 billion of overall biologics revenue. I would say lastly from there is our cell therapy business. This is a business that we think has a significant growth potential. We're excited about this business. We got into it through the acquisition of MaSThercell, which has given us capability both in the U.S. and Europe on the cell therapy side. It's still in very early innings, if you will, here. We managed to get into that business at an earlier stage in comparison to our gene therapy investments, where we acquired Paragon that was already starting to scale up. And then we deployed further capital to scale it up further here to become what is either the number one or number two largest CDMO player in terms of viral vector gene therapy manufacturing. So our cell therapy business, as I said, is a small revenue contributor to us today, operating at a little bit of a margin dilution profile because it is in such startup mode and we are continuing to invest in both scientific expertise and capability. But a business that we think with the pipeline we have, with the direction that the market could head from a cell therapy perspective, has the potential to be a really meaningful contributor to us five years down the road as we approach that $7.5 billion revenue threshold that we have talked about for fiscal 2026. So that's the sort of order of, I would say, expertise and operations that we have today around the various different offerings or technology platforms within biologics. You're expanding Maryland significantly, and what area is that, Tom? Yeah. So we're expanding within our Baltimore, Maryland facility. That's a gene therapy investment. So just take a step back, Paul. When we acquired the Paragon business back in that 2017 timeframe, it had about two suites, I believe, at the time. And there were another two suites that were in production that we had completed post-acquisition. We've then deployed further capital organically to further scale up that business. And where we stand today is we have 10 manufacturing suites within our BWI facility in Baltimore. And we have another eight that are in the process of being built out to be brought online. And I think we originally mentioned we were going to be adding three suites and then saw line of sight to further need for capacity based on the pipeline that we had. So we decided to add another five in addition to the three. So we'll have it when it's all said and done in about a year to 18 months from now, we'll have 18 manufacturing suites with an extremely strong pipeline that touches about 75 or so different programs on the gene therapy side of things. What's been a real accelerator for us in helping build out that robust pipeline has been being the only CDMO that's, at least from my understanding, the only CDMO that's tied to a commercially approved gene therapy product. When you think about if you're an innovator looking to partner with someone around viral vector gene therapy manufacturing, and you can go to someone that's already navigated the regulatory stringencies that exist around this industry and show that you can take a program from development, ultimately through commercial approval, have seen a pre-approval inspection within your facility that needs to take place from the regulator, and have been able to produce at scale commercial product, that is a differentiator and one that has absolutely helped us build the most robust pipeline that we've had across this business, as well as give us the confidence to continue to invest in those suites and taking up that gene therapy business to an 18-suite capacity here to be able to support the needs of our customers and ultimately patients. Okay. And I know another question. I know you haven't filed an 8-K on the Form 483 issue that came up last year. Can you talk to that or want to talk to it? Yeah. So So I can make some high-level comments here, Paul. You're right. This has not been something that we had disclosed. I mean, we think about how this became known externally. It was more through the disclosures of a customer that was impacted by our decision to proactively shut down the facility in order to remediate the observations from a 483. And just to take a step back, in our view, this was normal course. We have hundreds of audits that take place across our facilities every year, either from our own internal audit group, from regulators, or from our customers themselves that are always in our facilities and checking up and auditing how we work through manufacturing. And the way that a regulator would communicate observations back to a customer or to a company is through a 483. And that's exactly what was done here through this inspection. It wasn't a mandatory shutdown of the facility or revoking of a license or anything like that, not a warning letter or a consent decree, but a 483. And our view was that this was normal course. The best course of action for us was to take the facility down proactively to address and remediate some of the observations in a quick and efficient way. We've not commented on the timing related to bringing the facility back up. I think our customer, Novo in this case, has maybe said a little bit more than we have in terms of I think their quote was that they believed to be in a position to supply product to the U.S. market in the second half of fiscal 2022. So I think you can speculate in terms of what that means for the site and when that facility would directionally be back up and running. Obviously, our fiscal 2022 guidance, which we did raise after the second quarter results, takes into consideration any financial impact associated with this, which our quote was, "It's not material." We could see a little bit of, I would say, margin compression or variability in the second half of the fiscal year given remediation costs. This is obviously within our biologics business, given remediation costs and the fact that the facility was not operating during that period of time. But again, all taken into consideration and contemplated within our guidance. And we take 483s extremely seriously. And we operate in a highly regulated space at the grace of the regulators. This is something we took very seriously and have actioned the team internally, as well as bringing in some external experts to help us remediate as quickly as possible. There'll certainly be some learnings from this that will make sure we stay ahead of other facilities. As you read through this 483 in particular, you'll see a lot of it was very specific to our Brussels facility here. That's the gist of what I can comment on related to the 483, Paul. Yeah. Very helpful. The interesting comment you made on the earnings call recently was the color around the world wants to be oriented toward sterile prefilled syringes in terms of biologic therapies in the future. Why do they want to be? Why is that the preferred method, do you think? And how does that play into your strengths, Tom? Yeah. Yeah. Look, I definitely think the comments that we made were probably more around a COVID-related question than anything here in terms of what we think the final dose form is here for COVID-related vaccines, and I do think the company's perspective is that this is likely to move to a prefilled syringe down the road. When you think about how flu shots are administered in a general practitioner's office, which is typically through a prefilled syringe versus a mass vaccination site like we saw in the midst of the pandemic where we were filling vials that had somewhere between 10 and 14 doses, depending on the program, depending on the part of the world that that product was intended for, so we certainly do believe we will see a shift to prefilled syringe. The ease of administration of a prefilled syringe is very different than that of a vial or multi-dose vial in which there's clunkiness associated with having to extract the medicine out through a syringe and getting that dose right and the potential of breakage associated with dropping of a glass vial and things that go into the administration that I think, as I said, not using a scientific term, but a little bit clunky in comparison to a prefilled syringe where you can inject and dispose and then move on to the next one. And prefilled syringe has been capability that Catalent has always had within the portfolio. Going back to, as I mentioned, when we went public and talked about 10% of our business being tied to biologics in 2014, prefilled syringe was part of that capability that we already had. The fact that we're bringing on a new prefilled syringe line that's coming online very shortly, if it hasn't already, within our Bloomington facility, as well as investments that we've made in Europe within our Limoges facility, our new European Center of Excellence on a prefilled syringe basis, those are all going to put us in a very good position to be able to benefit from this potential shift, not only related to COVID work, but really across programs that we see in which prefilled syringe seems to be the preferred finished dose form from many customers, especially when we're talking about, as I said, drugs that can be administered either at home or in a general practitioner's office or clinic setting versus that of a mass vaccination or a mass deployment site. That's one of the trends I think we see. As I said, this is a capability and capacity that Catalent has been known for really for several years and not something we're looking to just enter into at this point in time. Within the contract manufacturing part of the business, others have said when they commit to capital expansions, a significant part is committed for. Is that similar with Catalent, and what does significant mean to you? I would say that there's certainly an element of either minimum volume requirements or capacity commitments that are customers-based that give us the comfort of being able to continue to deploy capital and invest in capacity. But I would also say some of this is tied to just the progression of our pipeline. I think it's less around investments that we make speculatively based on strong market dynamics. We need to base our decisions on whether or not we're going to invest in additional capacity and capability based on the programs that we have within the four walls of Catalent today and what the likelihood of commercialization for those programs are. As we see programs in our pipeline start to mature and move closer to III, I mean, when you get to phase III, the likelihood of commercialization is somewhere north of 50%. Probably 50%-60% would be my guess in terms of those programs being commercially approved. And then you absolutely need to make sure you have the capacity to be able to support what that uptake volume is going to look like for that particular program. So what we see that gives us the confidence in being able to continue to invest is not only the strongest pipeline in terms of number of molecules and programs that we have in development today, but it's also the maturity and progression of that pipeline moving from phase one, where I would say the likelihood of success is probably 10% or below, to phase three, which is north of 50%. And I would say that's really what we have seen in terms of giving us the comfort to invest capital, not do it in a more speculative way. If we build it, they will come. That's not the approach that we take, and like I said, where we're able to secure customer commitments for capacity, that usually comes into play when customers want dedicated capacity. If they want us to build a line just for them, we'll need to make sure that they're committing to volumes, regardless of whether that product, one, goes commercial and, two, what the uptake of that product looks like in comparison to what their expectations are. They will need to make sure that they hold to that commitment that they make in terms of us dedicating capacity to a particular customer or program. I guess they eventually are going to lock down on that commitment. What, as they kind of get into phase III or see the end of phase III? That's right. I mean, that's usually the timing here right before commercialization, and we're cautious in terms of our customers' perspective. Our customers are typically wrong by 20% in terms of what the uptake of a drug that gets approved is versus what they expect it. Every customer thinks that the program that's going to be launched is the next blockbuster, and some of them certainly are, and we hope it is. But we need to be prepared for the fact that the uptake of that drug may not be what the customer expects, so our contracts are very tight in terms of making sure that if we're going to dedicate capacity and not have the ability to shift that capacity to other programs or customers, that we're made whole from an economic perspective. Got it. And then the last question is a question on the vaccine shift. I guess that's COVID, but what are your thoughts on COVID? And I think the more interesting question is, what do you see in the rest of the pipeline and vaccine development in the market? Yeah. I mean, look, vaccine has never been a big area for Catalent prior to the pandemic. I mean, we did some flu vaccine, but we were never a big player on the vaccine space. I would say the role that we played through the pandemic with the likes of J&J, Moderna, AstraZeneca, all names that we've mentioned publicly around being able to help support vaccine-related demand has put us on the map and opened up an area of opportunity for us. I would say some of these customers have very strong pipelines that we think we'll be in a position to be able to help them progress those pipelines, primarily from a sterile fill finish perspective, but certainly not only that dynamic from a DS perspective, as well as viral vector manufacturing across. So we're very bullish on the vaccine side of things. And, like I said, have really built a strong position here in the industry that we look to continue to capitalize on. And it has really helped us, as I said, really build a very robust and really the strongest pipeline that we've had across the company, let alone across our sterile fill finish business, which is where we've really benefited from through the pandemic. With that said, Paul, thank you. And thank you, Tom, for your time today. Great, Paul. Happy to be here, and thanks again for the opportunity. It's a great conference so far. Sounds like Paul and I could actually manage a prefilled syringe, but we'll see, right?