Ladies and gentlemen, good morning. My name is Abby, I will be your conference operator today. At this time, I would like to welcome everyone to the Catalent, Inc. 3rd quarter 2023 business update conference call. Today's conference is being recorded, all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during that time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one once again. Thank you, I will now turn the conference over to Paul Surdez, Vice President of Investor Relations. You may begin. Good morning, everyone, and thank you for joining us today. Instead of our normal review of Catalent's 3rd quarter 2023 financial results, Alessandro Maselli, Catalent's President and Chief Executive Officer, will provide you with a status update. Ricky Hopson, Senior Vice President and Interim Chief Financial Officer, will discuss our capital position and our revised outlook for fiscal 2023. Mr. Alessandro Maselli will provide some final remarks, and then we will take your questions. During our call today, management will make forward-looking statements and refer to non-GAAP financial measures. It is possible that future results could differ from management's expectations. Please refer to Slide 2 of the supplemental presentation available on our investor relations website at investor.catalent.com for a discussion of risks and uncertainties that could cause actual performance or results to differ from what is suggested by those forward-looking statements in Slides 3 and 4 for a discussion of Catalent's use of non-GAAP financial measures. Now I will turn the call over to Alessandro, whose opening remarks will begin with Slide 5 of the presentation. Please go ahead. Thank you, Paul, and thank you to everyone who has joined the call today. I'll cut to the chase. This is not at all the call we expected to have now. We are not at all where we expected to be. Our financial performance and operational execution have all fallen significantly short of our expectations and our February forecast, and we accept responsibility for disappointing you. It should also not be taking us this long to finalize our financial reports, even though we and our third-party advisors have been using this time to engage in a deep and thorough review of our accounts and our financial reporting processes. Because that work is ongoing, there are few specific details I can provide today regarding our financial performance, but I will share what news I can, give you a sense of how we got to where we are, and explain our path forward. As we indicated in our April 14th and May 8th business updates, a combination of operational and productivity issues as well as forecasting challenges have led us to significantly reduce both our fiscal 2023 net revenue and adjusted EBITDA guidance. We are now reducing our fiscal 2023 net revenue guidance to a range from $4.25 billion-$4.35 billion. We are reducing our adjusted EBITDA guidance to a range from $705 million-$775 million. It is important to note that these ranges reflect that a significant gene therapy product began to be treated in the 3rd quarter as a commercial product for accounting purposes. While our evaluation remains ongoing, we anticipate continuing to record revenue for this product entirely on a percentage-of-completion basis. I understand how disappointing our further revised guidance is for all of you. I share your disappointment. Catalent has established itself as a global leader in drug manufacturing and delivery and produced exceptional results to investors and patients over the past several years. As your CEO, I'm responsible not only for the successes but also for our poor performance this quarter and this year. I am committed to putting Catalent back on track to assure a stronger fiscal 2024 and that we return to building long-term shareholder value. To that end, on this call, I will explain to you the operational challenges and other issues that contributed to our expected Q3 results and revised guidance. This will include walking you through the reasons why we believe that the operational challenges behind this quarter's disappointing performance and revised outlook are temporary and addressable. I'll then outline the actions we have taken to increase the rigor and discipline in our forecasting. I'll also briefly discuss the factors, including our accounting adjustments at Bloomington, that are expected to lead to the filing of an amended 10-K for fiscal 2022 and that delayed the filing of our 3rd quarter fiscal 2023 10-Q. Finally, and most importantly, I remind you of our positive long-term vision, a vision that, while fully reflective of our short-term challenges, continues to look to Catalent's long-term opportunities, performance and growth with confidence and optimism. Catalent remains a great company. We are committed to remaining our customers' number one CDMO partner in helping pharmaceutical, biotech, and health innovators develop, deliver, and supply products that improve people's lives. Before I do that, let me reassure you regarding some concerns we have heard from investors over the last few weeks. The disappointing 3rd quarter results we expect to report were not due to any GMP compliance issues or the loss of any customer or canceled order. Our customer supply situation remains healthy, and we believe we can sufficiently service their demands. We continue to be an essential partner in innovators' drug manufacturing and delivery solutions that positively impact patients. We continue to win significant new business. Recent notable examples of these include the new expansion of our long-term supply agreements with both Novo Nordisk and Samsung Bioepis. Let's review the operational challenges that materially and adversely impacted the EBITDA in the 3rd quarter and our full-year guidance. As we first communicated on April 14th, during the 3rd quarter, we began to identify productivity challenges and higher-than-expected costs at our drug product manufacturing facilities located in Bloomington and Brussels. These issues drove our EBITDA reduction in our revised guidance to be greater than our revenue reduction due to the following dynamics. Even where revenues were delayed or missed, the majority of the labor and overhead costs remained. Our plans to reduce our cost base were delayed in order to implement corrective and preventative actions following regulatory inspections earlier in the fiscal year in our biologics segment. Finally, balance sheet adjustment and inventory reserves for soon-to-expire biomanufacturing components and raw materials procured during the height of the pandemic are having a larger-than-normal one-time impact on our profitability. Our gene therapy manufacturing operations in Maryland also faced unforeseen challenges as we scale up commercial volumes requiring a new ERP system and successfully completed three regulatory inspections. Stepping back, I believe a root cause of these challenges and increased costs are two different COVID cliffs we experienced, a revenue cliff and an unprecedented operational cliff. Allow me to explain. In the last year, when we have spoken of the COVID cliff, we usually meant the significant decline in revenue as the world emerged from the worst of the pandemic, which occurred much faster than expected or forecasted. For Catalent, that is expected to translate into slightly more than 50% decline in our fiscal 2023 COVID-related revenues compared to fiscal 2022, when COVID-related revenue was approximately $1.3 billion, with well over half of these being tied to take-or-pay or related component sourcing agreements. While we expect some combination of COVID and other mRNA respiratory vaccines to remain a meaningful part of our revenue stream in the years to come, we don't have enough information at this point to forecast the expected full-year impact in fiscal 2024, although we are planning for a significant year-on-year reduction. This significant drop in COVID-related revenues doesn't tell the whole story. As you know, our people did an extraordinary job expanding our operations to meet the demands placed on us by the global pandemic response. Between meeting the unprecedented COVID vaccine demand and implementing growth initiatives to capitalize on the strong longer-term growth potential in biologics, we expanded very quickly since the end of fiscal 2019, including by adding approximately 7,000 more workers, roughly doubling our workforce and investing over $3.5 billion across our network, some of which was intended to help offset the revenue gap that would inevitably emerge once the COVID crisis faded. We know now that we entered fiscal 2023 overly optimistic about our current year growth. Our personnel and key processes simply did not keep pace with the dramatic up-and-down swing caused by COVID. Not only have some of the anticipated revenue offsets not materialized as quick as expected, but it has proven much more complicated to exit the pandemic operationally at these impacted sites. Most importantly, we have not been able to reduce the cost that we added to the company, including personnel, material, and inventory, as rapidly as needed. This is the operational COVID cliff I mentioned, driven by the extraordinary, unprecedented complexity involved in implementing the operational changes required to execute the COVID programs and then pivot to produce the non-COVID programs that would offset those revenues and fuel our future growth. However, it is now clear that we underestimated the related operational challenges, and our forecasting suffered as a result. Now that we fully recognize the depth of the challenges, we're addressing them in a rapid, focused manner. Let me transition to forecasting. Whenever actual results vary materially from our expectations and projections, our underlying assumptions prove substantially inaccurate, it is time to reassess our forecasting rigor and discipline. This includes moderating our short-term optimism by more thoroughly assessing and integrating the negative impact of the recent macro events that have had and continue to have a material impact on our business. This includes the significant contraction in biotech funding, which is especially impactful for newer modalities. At the same time, we are building the foundations of our demand planning process in our biologics segment. We have also conducted a root cause analysis of our forecasting to improve our understanding of the internal operational drivers that led us to such inaccuracies. In Bloomington and Brussels, we are more effectively weighing the temporary impact of productivity challenges and higher-than-expected costs, including those associated with the regulatory remediation that generated adverse manufacturing variances. In Bloomington, we expected some large product tech transfers to help offset the lower COVID demand at the site. Those tech transfers turned out to be more complex and are taking longer than anticipated, resulting in overly ambitious forecasts. Most of these hurdles have now been overcome, and we expect these transfers to complete in the 2nd half of this calendar year. On the positive side, some of these tech transfer customers are now adding RNA to Bloomington for their fill-and-finish work. Gene therapy has been our brightest spot this year, including rapid growth in the 1st half of the year as we scaled the business. We experienced significant unforeseen operational challenges in the business in the 3rd quarter. These challenges have continued into the beginning of the fourth quarter as we increased the capacity to serve growing demand. As we first communicated on April 14th, one of the key issues here involved replacing BWI's prior ERP system, which was better suited for smaller clinical and development operations. While the implementation of the new ERP was critical to support the fundamentally bigger commercial operations at BWI, the challenges we experienced in the implementation delayed the ramp-up of this additional capacity until early May. Again, these challenges were temporary and will not affect any customer, as we have previously built sufficient bright- stock to support their immediate needs, and we are now producing in normal fashion. Our focus in our pharma and consumer health segment have also been too optimistic. This is a segment where we expected a strong growth as we started the year, modified our expectations to much more modest growth in November and February, and now tracking it to flat organic revenue growth for the full year. The main headwinds here are more pronounced declines in some existing commercial high-value pharmaceutical products, delayed launches of some promising new prescription products and lower consumer demand, particularly for gummies and other high-end nutritional supplements. We are confident that the segment will return to organic growth in the coming quarters, given the growth we see in our core development revenue, the expected rebound of a top product for the segment that has experienced supply chain challenges in fiscal 2023, the continuing strong demand that we see for our Zydis platform, and the expected launches of 10 products recently approved by the FDA. To recap, we have reviewed the procedure with which we execute our processes to determine how macro events impacted our ability to meet our forecasts after delivering three years of exemplary performance. We are bringing back more rigor and skepticism to address known and previously unforeseen macro and internal operations drivers. At the same time, we now recognize the need to reflect better the increased level of complexity involved in this new phase of our business. While it is difficult to assign precise figures to the impact of these operational and forecasting challenges, we attribute about the same magnitude of those two items in our overall net revenue and EBITDA guidance adjustments. Concurrently, and in conjunction with the changes in our finance leadership, we have conducted an independent third-party balance sheet review at the two largest sites in our biologics segment, Bloomington and BWI. Most importantly, this balance sheet review reaffirmed its overall soundness, including our contract asset balances. In all, we expect to record a few accounting adjustments at Bloomington. One example, we expect to increase our inventory reserve by roughly $55 million related to suspect and raw materials and component to accrue the safety stock to minimize pandemic-related supply chain shortages. We also expect it to correct a $26 million recognition error related to the fourth quarter of fiscal 2022. Separately, given our lower growth expectations for our consumer health business, we also expect to report a goodwill impairment in that business in excess of $200 million. Properly assessing and addressing the effect of these adjustments on our previously issued financial statements, including those in our most recent 10-K and our 10-Qs for the current fiscal year, as well as their effects on our internal control over financial reporting and disclosure control and procedures, are contributing to our delay in finalizing our 3rd quarter 10-Q. When our assessment is complete, we will fully explain to our investors these prior period changes and their effects, including their effects on our internal controls. We very much appreciate the patience of our shareholders as we work to resolve these issues in a timely fashion. Moving on to a review of our manufacturing operations. We have taken several corrective actions at BWI and Bloomington, including both management and operational changes to address the root causes of the issues identified at each site. The operational changes include more rigorous demand planning, deployment of additional Six Sigma Black Belt resources to recover previously experienced productivity levels, and an holistic cost review to adapt the future organizational structure to the new outlook on our demand. We expect these actions to bring us back progressively to typical profitability levels at these locations. We have also made a number of important leadership changes. We announced on April 14th that we appointed Ricky Hopson to serve as our interim Chief Financial Officer. Ricky is an experienced finance executive, an operational finance expert who deeply understands Catalent and can successfully lead our financial function through this interim period as we search for a permanent CFO. We also made other changes in the finance organization in the last month, including changing the finance directors at the sites with the greatest challenges. On the operational side, we made several executive leadership changes in our biologics segment. As just one example, we are pleased that Ricardo Zayas, a proven biologics operations leader with vast industry experience who joined Catalent in January, will now lead our operations worldwide across the biologics segment. In addition, in early March, we announced that Sridhar Krishnan, a 20-year industry expert in Lean Six Sigma, had returned to Catalent to reignite The Catalent Way. The Catalent Way is a company-wide system of continuous improvement and lean manufacturing with clear standards to enable more predictable and efficient processes. When I speak about rigor, it also means effectively managing costs and cash to ensure we drive the company's expected profitability. We have developed another cost reduction plan intended to drive margins more aligned to our historical levels with a goal to double our previous committed $75 million-$85 million of analyzed run rate savings from restructuring activities. In addition, we are limiting our CapEx to only essential investments. We are also actively evaluating our current portfolio to ensure we have a suite of business that achieve sustainable, profitable, and capital-efficient growth that delivers superior shareholder values. I want to reiterate my disappointment in having to deliver this news. My team and I accept responsibility for falling short of your expectations and ours. We nonetheless remain committed to Catalent's long-term vision. The secular trends in our overall business and operating environment remain fundamentally strong. We operate in generally excellent markets with industry-leading services and capabilities to meet customer needs. We are proud of our regulatory record, including this year, where in the last six months, we underwent nine successful FDA inspections, only a few of which included observations, and all of those can be readily addressed. Among these successful inspections were two PAI inspections at our gene therapy sites in support of a significant product. We also see strong current and future demand for our broad platform of services. While lower biotech funding has impacted some near-term demand for some of our offerings in the newer modalities further away from commercialization, those assets that are closer to commercial approval or those that have already been approved, which is well over half of our revenue when combined, have continued their ordering process as expected. We have also invested hundreds of millions of dollars in assets that are getting ready to be deployed as dictated by the market demand. This includes the additional new suites in BWI that are now expected to be completed in fiscal 2024, two state-of-the-art sterile syringe line, one in Indiana, one in Bloomington, and a high-capacity expansion of our diabetes offering. We estimate that when we reach planned level of utilization of this large footprint, we will be able to generate $6.5 billion in annual revenue without the need for substantial new growth capital investments. We will let you know as soon as we are ready to announce our full quarterly results and provide any necessary further detail regarding revision to our prior financial statements. I will now turn the call over to Ricky for a discussion on our capital position and expected the fiscal 2023 results. Thank you, Alessandro. Turning first to our capital position and our debt load. As discussed on Slide 6, which we now intend to reduce more aggressively, remains well structured and permits good flexibility. Our nearest maturity is not until 2027. Our most rigorous debt covenant is the ratio of first lean debt over the last 12 months of adjusted EBITDA at 6.5x. This ratio at December 31st, 2022, was roughly 1.6 x, and is expected to increase for the next several quarters before diminishing again in the back half of fiscal 2024. This covenant ratio is expected to remain well below the permitted level throughout this period. Our top priority is for positive cash generation and allocation of capital, which will support our efforts back towards our net leverage target of 3.0 x include greater utilization of our asset base, completion of essential in-flight CapEx projects that we believe will generate positive returns in the short term, activities that will reduce our cost base and contract negotiations to reduce our cash conversion cycle. We expect to report that our contract assets as of March 31, 2023, to be roughly flat with that of December 31, 2022, balance. I understand the level of contract assets has been a top investor concern. In one of my first actions as interim CFO, I initiated an independent review of the balance sheet, including contract assets at two of our largest sites in our Biologics segment, Bloomington and BWI. The review reaffirmed the overall soundness of our balance sheet, including our Biologics contract asset balances. Some of which are related to nearly completed products, including the Brightstock Alessandro mentioned earlier. Related to contract assets, the revenue accounting treatment for complex products with long production cycles will continue to be recognized on a percentage of completion basis when contract terminology determines our work related to commercial activity. Note, in the 3rd quarter, there was a change in contract terms to a large gene therapy program that drove a change in characterization from development to commercial activity. The percentage of completion method we have been using all along will not change. We are looking at other contract terms that may partially modify our accounting for this product. This is one reason for the delay in finalizing our 3rd quarter results. Finally, we now expect our fiscal 2023 CapEx to be approximately $550 million versus our previous estimate of approximately $500 million. When taking into account the $ billions of capital investments we have already made in the business, in fiscal 2024, we expect to be able to reduce our CapEx to only the most critical projects, leading to a notably lower spend. We turn to our revised financial outlook for fiscal 2023, as outlined on Slide 7. We now expect fiscal 2023 net revenue in a range of $4.25 billion-$4.35 billion. We now expect adjusted EBITDA in a range from $725 million-$775 million. We now expect adjusted net income in a range from $187 million up to $228 million. One driver of this change is that we now expect an increased tax rate of 27%-29% for the full year compared to our previous expectation in the 24%-25% range. This increase is a result of the lower outlook for earnings before taxes and certain tax detriment items unaffected by reduced pre-tax income. The rate is also affected by changes in our anticipated full-year geographic mix versus prior forecasts, as a larger portion of our earnings or losses are projected to arise in jurisdictions that do not provide an immediate benefit for such losses and related deductions, resulting in a rate detriment. We continue to expect our share count to be in the range of 181-183 million shares. I will provide some color on the temporary nature of the challenges impacting our margin in the 2nd half of fiscal 2023. First, in BWI, as we initially shared on April 14th, we continue to expect to recover in the 1st half of fiscal 2024 the revenue we failed to achieve this year due to our operational challenges related to the recent ERP implementation. Second, also as noted in the April 14th announcement, the lost productivity in our drug product business, particularly in Bloomington and Brussels, was very significant, but we now expect those sites to ramp up towards previously forecasted productivity levels in the next few months as we execute on our backlog, including multiple tech transfer programs. Third, we have started another enterprise-wide restructuring program with a goal to double our previous commitment of $75 million-$85 million annualized cost savings. This includes costs eliminated through the completion of remediation activities in both Bloomington and Brussels. We expected the annualized impact of these activities to be roughly $100 million. Let me reiterate again my personal regret regarding this update. However, I would like to close our prepared remarks by reaffirming the key strengths underlying Catalent's future. First, all our issues are temporary, and fixes to our operations and leadership are already underway. Second, we have learned many lessons that will increase our discipline and rigor going forward. Third, we have a strong pipeline aligned with our high-quality asset base, matching the most exciting trends in our end markets, capable of delivering up to $6.5 billion in revenue with substantially lower future capital investments. Over the last several months, we have continued to see a strong support from our customers, as illustrated by some of the expanded partnership mentioned earlier in our prior calls. As a result, Catalent will continue to play a critical role in delivering some of the most consequential therapies being developed and needing commercialization. This is a reset moment for Catalent, but what is unchanged is how important Catalent is to delivery of global healthcare, not just for vaccines, but also for the 8,000 other products we make. Patients around the world need Catalent, and we are not going to let them down. Operator, this concludes our prepared remarks. We would like now to open the call for questions. Thank you. At this time, I would like to remind everyone in order to ask a question, press star and then the one on your telephone keypad. We will pause for just a moment to compile the Q&A roster. We will take our first question from Tejas Savant with Morgan Stanley. Your line is open. Hey, guys. Good morning, and thanks for the time here. Alessandro, Ricky, maybe just to kick things off, you know, you trimmed the revenue guide by about $450 million, the EBITDA by about $510 at the midpoint. Can you just provide some of the quantitative, the bridge essentially there in terms of, you know, perhaps the Moderna take-or-pay contract or the quality remediation cost overruns, or any sort of rev rec issues related to, Sarepta's drug? Hey, Tejas, this is Ricky. I'll take that question. It's a fair question. Look, the way that we think about this dynamic of the EBITDA decline being more than the revenue decline is into a couple of categories. First and foremost, the delayed and missed revenues predominantly drop through to the bottom line. The cost of the labor remains, the cost of the overhead remains. The only cost that is really eliminated is the material. It's a high margin drop through on those aforementioned revenues that were delayed and missed to a future period. You know, our forecast was overly optimistic. We had aggressive timing of new business coming in, you know, high margin business coming in. Our plans to reduce our cost base were delayed by the necessary corrective actions that we were taking to address the regulatory actions. With the balance sheet adjustments that we mentioned in our prepared remarks, the inventory reserves, no impact on revenue, of course, but impact in EBITDA. You know, with the combination of those factors, you get to the dynamic where the EBITDA reduction is more than that of the revenue reduction. Hopefully that provides some color for you. Got it. That's helpful. One quick follow-up on the debt covenant piece, Ricky. Is it fair to assume from your prepared remarks there that you feel very confident that you won't trip up that 6.5x debt covenant? One for you, Alessandro, big picture. I know you talked about the new, sort of, expansions of the contracts with Bioepis and Novo here. You've also obviously, you know, one work with Moderna, with J&J and Sarepta and the new contract as well. There is a fair question to be had here in terms of customers worrying about management being distracted as you look to fix all of these issues across the portfolio. How are those conversations going? give us a flavor for how you're sort of assuring those customers that, you know, Catalent will be there for them, you know, despite all of the other noise. Tejas, I'll just address the first point of your question, which was around the debt covenant. The answer to that is yes, we feel very confident. Hey, Tejas. Hi, Alessandro here. Thanks for the question. A very good one. Look, overall, as I said in my remarks, the customers remain very supportive of the Catalent story. Our supply situation remain very healthy. Clearly, when we enter some periods in which we are preparing for some change, we have a number of contingency plans for those changes. We are prepared to face potential challenges without the risk of impacting our customers. So I personally spend a significant amount of my time speaking with those customers, providing them the color of those challenges. Some of them have been very, very close to what happened during the pandemic, are not surprised or shocked by what is happening in terms of how difficult sometimes is to turn some of these operations from a period of high growth back to normal world. I would characterize those conversations as very supportive, very understanding, and the proof is the expanded relationship that we continue to sign. Got it. Thanks, guys. Appreciate the time. We will take our next question from Jacob Johnson with Stephens. Your line is open. Hey, thanks. Good morning. I know it's probably too early to comment on FY 2024, but obviously it's a focus for investors, and you guys talked a little bit about the outlook for leverage in the deck. As we think about the $725+ million of EBITDA in FY 2023, the comments you made about leverage peaking in FY 2024, the middle of the year, and then also the potential for significant approval, there's a few puts and takes here. Can you just talk about what the key swing factors are of whether or not FY 2024 EBITDA could be higher or lower next year? Like, is this a trough number in FY 2023? Yeah, sure. Look, thanks for the question. Look, I believe that we, it's clearly early to speak about fiscal 2024 in May, but I understand the nature and the relevance of the question you're asking. Look, when you look at some of the prepared remarks we have provided today, we have tried to give some color around the temporary nature of the cost challenges. When I look at the overall picture, and notwithstanding the fact that we entered into this fiscal year with more ambitious expectations for our top-line growth. Our non-COVID revenues this year, even with the current revised guidance, will still be in the mid-single digits growth, given the overall situation of the market, is somewhat aligned. I believe that we don't have necessarily a demand problem here. We have a cost problem related also to execution challenges. We have provided I believe enough color to parse out what of these costs are temporary in nature and how to think about them going forward into the next fiscal year, being able to carve them out from the current outlook. Okay. That's, that's helpful. Thanks, Alessandro. Maybe a bigger picture question. I appreciate the $6.5 billion kind of revenue potential at Catalent. You just talked about some of the kind of near-term cost dynamics, and I think guidance implies depressed EBITDA margin in the back half of this year. As we think about the long term, you know, I think once upon a time you guys were targeting 30% EBITDA margins. Say you get to $6.5 billion of revenue, what do you think is a reasonable EBITDA margin profile on that level of revenue? Look, I believe the answer is pretty much connecting the dots all you lighted you mentioned there. What we are sharing is that we already have an asset base that has the potential of $6.5 billion, which means that in many ways, our operating leverage at the moment is pretty low. There is a lot of potential by driving higher level utilization into the assets that we have created and we have built. Clearly, when we made decisions of these investments, the biotech funding environment was different than it is today. Some of the environment we were living in were a little bit different. We believe that those trends, when you look more in the long term, are still valid. That operating leverage that we were expecting, we continue to expect that to come back. We do see a significant potential of expanding our margin going forward, and surely getting more aligned to the flight plan that we were discussing only a few months ago. Okay. Got it. Thanks for taking the questions. We will take our next question from Rachel Vatnsdal with J.P. Morgan. Your line is open. Hi. Good morning. Thanks for taking a question here. First of all, regarding your ongoing customer conversations, Alessandro, I heard you reiterate these customer relationships remaining relatively stable here. Just curious, have there been any changes in terms of pricing or contracting terms as you work to kind of, you know, stabilize or maintain these customer relationships? Are those any potential changes reflected in your updated guidance? Look, clearly, the pricing environment is a very difficult answer to give. The pricing environment, given the diverse portfolio that we're running, and surely in the last year has been a key point of negotiation with the customers in terms of when you live in a such a high inflationary environment, you need to give to customers some prices to offset the inflationary environment. In general, I would say that there has been no substantial change to our contract terms. The reality is this, as we look into the future and across the different modalities, the pricing power that we have continues to be very different. In general, I believe that in the segments where we're seeing a healthy level of demand, we have mentioned multiple times the prefilled syringes, and in general, fill and finish premium services, we continue to see some healthy level of pricing there. I would say that in general, I don't see the environment changing dramatically from a pricing standpoint. Got it. Very helpful. Regarding the organizational changes that you mentioned earlier, could you give us more color on kind of, you know, the extent of any additional personnel departure, and whether or not they're in functions that could impact further impact your production capacity? If you could give us a sense of, you know, where your current production capacity is compared to normal levels, and how quickly do you think you can refill those positions and get back to normal productivity? Yeah, sure. First part of the question, look, I probably, you know, it's faster for you to consult our website, which shows some of the, you know, the changes that happened at least at the executive level. Clearly, there were several of those. All I can tell you is that in these periods where the job is to regain the past performances, it's very helpful to be able to tap in known leaders that have been with the companies already, have been in these positions already, and can be redeployed to restore what was, what was there before. I was very pleased to have the opportunity to have those leaders available to make the changes in a very fast fashion, going for solutions that I would define known entities with a proven track record. I'm very confident that the changes we've done, together with the addition of Ricardo Zayas and Sridhar, which I mentioned in my remarks, we have now the team that is needed to really correct the course and establish the performance of the company. I would also mention that I have a lot of trust in Ricky. He knows the operational finance of the company like nobody else and our segments and markets very well. He's gonna be very helpful in this interim period in rebuilding some of the forecasting processes that, especially in the newer parts of our business, are not as strong as they are in our legacy assets. With regards of your question around productivity levels, the work, as I said, is already underway. We are addressing this with the speed and pace. The way I would characterize this, it will take a lot of work and some time, but we are already making progresses, and I can already see, notwithstanding that we're not in the position to give necessarily quarterly phasing, but I can share that I already see in Q4 progresses versus Q3. Got it. That's helpful. Then last one from me. You mentioned opportunities for portfolio adjustment in your prepared remarks. Are there any preliminary thoughts you can share with us at this point? Will you be pursuing those portfolio strategy efforts simultaneously as you work on the other issues? That's all from me. Thank you. The first part of the answer is that this is not surprising. I've already signaled that I do believe at any point in time we need to conduct a assessment to our portfolio to understand what are the right assets for Catalent, and if at any point in time we are the right owner for other assets. I do believe that as we have built the company in the last few years and arrive now to more than 50 sites, we have some significant opportunities, probably in getting for some of the assets, thinking about better ownership given the phase those assets are in. It's an ongoing evaluation that we do continuously. Clearly, I cannot deny that the current, you know, updates we had on the outlook, surely have accelerated some of those evaluations. The simple answer to the second part of your question is that, yes, we are doing this, as we also look at improving the productivity levels at our more critical sites. We will take our next question from Dave Windley with Jefferies. Your line is open. Hi. Thanks. A couple. I heard Ricky talk about a $100 million annualized number that I think was targeted at costs and the additional restructuring. My first question is: how much of the original $75-$85 has already been harvested and is reflected in the new EBITDA guidance that you're giving today, versus how much, you know, of what I guess would now be like a $160 million target would still be targeted to take out beyond that guidance? You know, above and beyond that guidance. Yeah. I understand the question, Dave. I would say when we announced and made the cost reduction changes in November 2022, we remain on track to deliver approximately Half of that in the 2nd half of our fiscal. The second cost reduction exercise that we're embarking on now, we would expect to see the majority of that come through in our fiscal 2024. Okay. Helpful. Thank you. Secondly, a little broader question. kind of invoking the contract asset review, appreciate the comments there and the guidance and the magnitude of change. Correct me if I'm wrong, but it seems like in your saying that you've reviewed contract assets, and it seems like you're particularly pointing at Baltimore and Bloomington, the big sites, that would say that revenue recognition related to percentage-of-completion accounting through the December balance sheet date, you're saying you're comfortable with. That certainly gives some assurance around, you know, previous rev rec. It does then say that the $510 million of EBITDA that you're taking out is essentially all 2nd half EBITDA. This is all kind of from a chronological standpoint, fiscal 2nd half of the year impact. Is there anything about that that I should think about differently as I think about the, you know, the run rate that is implied by the 2nd half EBITDA ex these cuts? You're thinking about that correctly. When you think about the 2nd half, also consider what we alluded to in terms of the one-time costs that impacted the 2nd half run rate. The full 500 is related to the 2nd half. It's not related to the 1st half. As I said, a number of one-time non-recurring items in that 2nd half run. Okay. Understood. I guess bigger picture question about the $6.5 billion, the productivity expectations. I guess what in this review I understand, you know, some of this is still in flight. I guess, Alessandro, what I'm really interested in is what gives you the confidence, you know, given that last answer, what gives you the confidence that you can get up to or back to target margin/productivity levels in light of, you know, some factors that, you know, if we exclude the one-time items, factors that make the margin in the 2nd half look, you know, really, really bad? Help me understand your confidence in the long-term productivity? Sure, sure. Dave, look, we need to go to the root causes to get to the confidence, right? When you look at the root causes, this is primarily related to what my commentary around the operational COVID grief. You're talking about doubling the workforce overall as Catalent, but this was very much concentrated in very few locations, okay? That was of course, you know, needed and necessary for the mission we were on. Unwinding these costs and these head count in the middle of implementing, you know, remediation actions for CapEx related to 4 ADTs is not the easiest of the task. I'm not searching for excuses here. I'm just saying that is highly complex, and surely we have underestimated that complexity. We surely had the plans to realign the cost structures to the real-reality of the product mix and the portfolio, but we had to make some decisions and trade-off in delaying those. We don't implement ERP systems every day, and we don't do them to the extent we do it every day. This was necessary to be done, and we were mindful that we had to do it early enough before a potential approval to have time to recover if something was not going quite as expected. There were decisions being made. There are things that are very special to this fiscal year, many firsts and many first-timers. As I said, we learned a lot, but I also recognize that some of those elements will reverse as we go into the next few quarters. As I said, I already see the next, the recent performance better than the most performance. The other element that you need to think of, we have built a significant number of assets in the new modalities, which have a very low level of absorption and utilization at this point in time. Now, as I said before, our expectation and focus was to fill those assets, primarily in the cell therapy space, much faster than what really happened, and that's a combination of many items. Some are environmentally related. I believe some are self-reflection we need to do on our go-to-market strategy, but the overall appeal of those areas remains. To be honest with you, all these assets are at the morning, at the moment, heavily much dilutive to the organization. The latest element looking at the portfolio considerations is also a consideration around what are the assets that at the moment non-strategic and dilutive, and these are the assets also that we need to look at. I hope I gave you all the elements, Dave, to get the same level of confidence I have that the fundamental pricing of the business remains the same, the fundamental demand profile remains the same, the fundamental technologies we use are the same. All when you consider all to this together, we will get back the margin where it needs to be. That's very helpful. I appreciate. I wanna ask one last quick one, and that is on the contract asset, Ricky, coming back to that. I understand I believe that's applied to your development stage work. Could you comment then on like a, an aging of that from an AR standpoint? I know you can't bill for it yet, but, like, how long dated are some of those contract assets? How far back do they date? Thank you. Yeah, Dave. Look, it's something that we obviously, we look at, we assess. At this stage, it's not something that concerns me in terms of the aging profile of those contract asset, those contract asset balances. If there is anything in there greater than one year, it would be, you know, deemed on the balance sheet a long-term contract asset. Just to clarify one point, the contract asset is not just for development. As I mentioned in the prepared remarks, the large gene therapy program, which is now being treated as a contract asset as well from a development standpoint. Maybe I will add some other information we have already shared, this is like repeating what is already been made known. Clearly, as we got into these new modalities, Dave, we didn't realize how long the production process might be also due to some of the intermediate testing that is required. There are several type of the process, but between steps, there are very long testing times in which you essentially, you know, cannot progress the process until such testing is completed. And that time is measured in quarters. It's not measured in months. Of course, we know much better now what the process ended up to be on some of these new modalities. We are actively discussing also with our customers around how we can look at this from a contractual standpoint to avoid us having too much working capital, you know, tied with these assets as we go forward, you know, in the future. It's very much not lost on us that it is creating an inefficiency from a working capital standpoint, and we need to find ways to address it. That is a big contributor to this contract asset, and is a big contributor also of the aging of it, because you have several quarters worth of production at any point in time that is waiting to be finalized with the last steps of the process by design. Understood. Dave, just to make the point also, the balance sheet review that we conducted, did confirm the overall stand of all of our contract assets, which included the aging profile of those balances. Understood. Very much appreciate the answers. Thank you. We will take our next question from Paul Knight with KeyBanc Capital Markets. Your line is open. Hi. Thanks for taking the time. In effect, are you going to have to reprice in the future, cell therapy projects? Do you think that was? Also, the method by which you're doing the percentage of completion, recognition, does that have to be adjusted both how you price it and the method of the recognition? If I understand well your question was around the pricing of cell therapies, or maybe, I would say, look, probably you're asking both cell and gene therapy, so I'm gonna give you a little bit more broader answer. I don't believe that on gene therapy there is any pricing significant changes into the future. I do believe that on cell therapies, we are still finding the right process to produce these therapies in an efficient way. It's not lost on the industry that we need to make sure that these therapies are made available to a wider group of patients because they have a significant impact. We are really working with our customers and some of our key partners from a component standpoint to try to find the solutions to have more efficient processes. That doesn't necessarily mean then only the price, but also the cost of those processes to be addressed. Yes, I believe that in cell therapies over the next few years, you're gonna see changes in those regards, but I believe it's a good thing because they will allow more patients access these therapies, and as a result, will have more volumes for us to manufacture. With regards of your second question, can you better specify the question? I want to understand exactly what you're asking. The milestones needed to achieve revenue recognition, have you learned in this process that those need to be modified? I don't necessarily believe that it's a matter of milestones. I believe that what we learned is that sometimes, you know, probably the invoicing triggers along the process could be different. That, you know, you move faster. These value you create from contract asset to AR, from AR to cash in the bank. I believe this is the learnings. I believe we are trying to address those learnings, attacking them from different angles. On one end, I believe that we have opportunities to make the process much leaner, much faster, especially when it comes to the testing element of it. On the other part, I believe that we can address this also together with the customers. What Alessandro is referring to is the balance sheet aspect, the working capital aspect. No change from a P&L perspective from a revenue recognition Okay. The last question is regarding Bloomington and Brussels. Did you expand Of course you did the work to comply with the 483, but did you expand facilities in those locations as well, going above and beyond the 483 needs and they are running now? Is that correct? Look, I will tell you that expanding the footprint, especially in Bloomington, yes. As we mentioned many times, we're having additional lines being installed there. If the question is in around did we go over and beyond, you know, what was necessary in the 483? Look, every regulatory inspection is a checkpoint and an opportunity to reflect on what can be improved. Catalent has always had a very holistic approach to these situations. Yes, we go over and beyond because we are here for the long haul. Whenever we have the opportunity, we need to make sure that we address everything at the same time in a holistic fashion, no matter what the pain is in the short term. Okay. Thank you. We will take our next question from Derik De Bruin with Bank of America. Your line is open. Hi. Good morning. Just some clarifications on some things. How much revenue from fiscal 2023 is getting pushed into fiscal 2024, right? Specifically, I'm curious about the gene therapy drug that's going commercial. What was that push? You know, we've heard some, you know, there's some fairly big numbers out there on what that contribution could be to the company. I would appreciate any sort of, like, clarity on how to think about that and the margin flow through. Look, this is Alessandro. I appreciate your question. I really understand the reason why you're asking. I will tell you, though, that it's premature for us to make any comment for fiscal 2024. It's not the time. Evading the question, I understand the reasons. We're gonna try to give this quantification in due course as soon as possible. You know, it's a complicated equation because there is the demand, but there is also the additional scale-up of capacity you want to do to catch up on that demand, how fast you can do it, where it's gonna happen, the 1st half of fiscal 2024, 2nd half of fiscal 2024. I'm just not wanting to-- It's not that I don't want to answer, it's just that we need some more work to make that quantification, I can promise that as soon as we're gonna have that available, we're gonna share this with you guys. Clarify this, you've got product that you've already made that can supply patients that are expected to be dosed with that drug for the next six to 12 months. Absolutely. Absolutely. We had, if you like, part of the reason why we have the contract asset that we have is because part of that contract asset is what we call the bright stock. Let me explain it. It's a stock that can be converted in final product with only few remaining steps of the process. You do it once some final, you know, information is available, market labels and so forth. Yes, we were well aware that this ramp path might be, might have been more complex than others because it's a new processes, it's new modalities, and there is ERP implications and so forth. We were very well, very much mindful of building the stock ahead of the time so that we could have periods of adjustments without impacting supply. I can definitely reaffirm very, very clearly because this is important to me, it's important to the patients out there is no risk to supply of any of these products. Have you recognized revenue on that product? To some% of completion, you know, according to our policies, yes. Okay. Let me try something else then. How much do you think of your revenue miss is tied to the biotech issues? Just because, I mean, one would argue that's not gonna come back next year. I'm also just curious, you know, you had a 6% to 10% guide for the PCH business longer term. That seems to be arguably off the table now, given some of the asset write-downs and things there. Can you just sort of talk about how you're thinking about that? Sure. Look, the biotech funding is clearly a situation that is still very volatile. I would say volatility there continues to be fairly high. I believe we were the first one speaking openly that there would have been a challenge in November. You know, as you know, continues to be a little bit of a challenge, especially for early-stage programs and especially new modalities. I want to stress that in the new modalities, because of the nature of them, we have a high level of exposure to the biotech industry and as such, to the biotech funding. I believe that the 1st half or the 2nd half of this calendar year will continue to be a period of volatility, and we need to continue to observe at what is happening there in terms of understanding the time for recovery. There are some elements, though, that are more in our control in that regard, which is, you know, the late-stage programs which are less affected by that because they are so close to potential commercialization, which are not really affected by the funding because you're gonna, you know, you're gonna progress those. I believe that on those ones we have more visibility and we are more optimistic. With regards of the PCH segment, when you look at what was in the script, there were three elements that really affected our outlook this year and made this business, which was expected to be a contributor of growth this year to a more flattish story. One was that we had some delayed approvals. That's the business we're in, right? Sometimes you have a year or so periods where you have the approvals all together and periods where they just get delayed. The 1st half of this year was disappointing because many of these approvals were in fact delayed, and as such, the launches, all of a sudden, in the last few months, we received 10. Sometimes you don't control those events. The good news is that now they've happened. As we look into the fiscal 2024, those are gonna be launches that are actually gonna happen. I believe this year we suffered from a higher-than-expected erosion of some of our portfolio in the prescription business. The erosion was expected to happen, happened a little bit faster. I believe it's now bottoming to the levels for these products that will be sustained going forward. We have resolved some supply, meaning raw material challenges for one key product we have in that segment. During the summer, we expect to be back on the supply of those ones. With regard of the consumer, I'm gonna tell you a little bit the same response that I gave for the biotech. I believe it's still a volatile environment. We're still monitoring it. We continue to convert the portfolio to larger, bigger, more diverse customers. You know, that's an environment where we're going to continue to observe in the next 6 months cycles. I hope this call helps you. It does. Thank you. Just one final one, just to be clear. Do you need any restatements, do you think, beyond fiscal 2022? Basically, just if you go back and you look at the pre-COVID numbers before you started adding all this capacity, are those numbers safe from what you've recorded? I would Look, I would say that we're just continuing to assess and address the effect of these adjustments that we discussed earlier in our previously issued financial statements. When the assessment is complete, we'll be back and fully explain to our investors these prior period changes and their effects on our financial statements. Thank you. We will take our next question from Luke Sergott with Barclays. Your line is open. Great. Thanks for the questions. Before the operational challenges, you guys were doing about $300 million ± in EBITDA per quarter. Like, outside of the next few quarters, and you're, you know, clearly a bit below those, that level. When can we reasonably think about when that will get back to those types of levels? Like, is that back half of 2024? Or, you know, is it more going to be like a 2025 issue? Look, I believe that as I said, that this will require some time and some work. I have confidence that we're gonna get back there. It also depends on the top line. There are many variables attached to it. Of course, as you know, we have a pretty consequential events on the horizon in the next few weeks. I believe it's hard to make a prediction, but I believe that if you assume calendar 2024, you're not far from where we expect to be. Okay, great. Then I guess on the approval, can you for the gene therapy, I mean, you guys are scaling up to, I think it was like, 16 or 18 suites. Can you update us on what that manufacturing capacity? Do you guys need to build out additional suites? It's clearly taking more of the, you know, materials and inventory to make the drug than what was earlier anticipated. Look, as we said, the BWI facility is a facility with a lot of capacity and we believe that we are creating capacity for our current needs, but that facility can continue to serve the demand in gene therapy for years to come after the expansions that we have done. There is a lot of capacity available there. We feel very comfortable. It's a premium facility. It's commercially approved, recently to more successful PAI inspections. Is still a jewel in the crown of Catalent, notwithstanding some of the short-term challenges we discussed with our yet implementation. Very pleased with that facility and very optimistic about the future. Okay. Lastly here on the, sticking with the percentage of completion. I, you know, how do you plan to do that through actually after the drug is approved, assuming it does get approved? I mean, how does that work? Yeah. We've concluded on the accounting with regards to that product. It will be continued on a percentage of completion basis. As we shared during our prepared remarks with such a complex agreement, we are looking at other contract terms that could prospectively modify our accounting for that product going forward. Yeah. Right. I mean, it gets approved, it's commercialized, it's no longer development, right? It would have to be recognized in batch commercialization, right? No. No, no, that's the point is we will continue to recognize it if it is approved and it's a commercial product on a percentage-of-completion basis. Gotcha. All right. Thanks. We will take our next question from Jack Meehan with Nephron Research. Your line is open. Thank you. Good morning. My question is simple: Can you grow EBITDA in 2024? Based on the transitory impacts you've talked about, can you just confirm 2023, what you've laid out, is this gonna be the trough? Look, clearly this question requires some, you know. You make these answers based on assumptions. Based on some assumptions of these, I would say that is a credible expectation. Great. Some key assumption is also regarding some expected approvals in the next few months. Okay. I believe I heard you mention the COVID forecast down 50% year-over-year. It sounds like you maintained it at over $600 million for the fiscal year. Could you confirm that and what's embedded for the 2nd half of 2023? Yeah, it's about right. Yeah. We pretty much expect it to be the number, you know, maybe a little bit different than the phasing, but yes. Yeah, we can. No change to our previous estimates around that number, a little more than $600 million. Great. one final, what was the $26 million impact in the fourth quarter of 2022 you called out? Yeah, as a result of the balance sheet review that we are still ongoing, one of the reasons why we are late in our Q3 financial statements, is the review did lead to some accounting adjustments. One that we shared here today was to correct a $26 million revenue error related to fiscal 2022. Overall, I'm very pleased with the pace, the depth, the overall quality of the review that we're doing to make sure that we don't leave any stone unturned. Thank you. We will take our next question from Max Smock with William Blair. Your line is open. Hi. Thanks for taking our questions. Just wanted to follow up on a earlier question, the point from the deck around net leverage peaking in the middle of fiscal 2024. I know you said it's a little too early to give a guide on next year, can you just confirm that net leverage peaking in the middle of fiscal 2024 means Adjusted EBITDA in the 1st half of next year will be down year-over-year? Again, we have not completed a full assessment of fiscal 2024 myself. I'm getting up to speed here on all financial matters at Catalent. My focus has been around, you know, Q3 financial reporting commitments. At this stage, we don't have a fully built out FY 2024. Yeah, I would say, look, that being said, our ratio is always calculating on LTM basis, right? There is not only. It's not necessarily only the next couple of quarters. It always look the 4 quarters back. That there is an averaging factor there. Okay. Got it. Maybe just a couple quick ones on Sarepta. There was a lot of focus last week during their AdCom on the ratio of empty capsids. Can you just discuss what's going on there, why you changed the manufacturing process to one that has higher empty capsids and did not add steps to address this issue? Whether or not there could be some CMC issues moving forward as a result, even though the FDA has already completed its inspections at your BWI facilities. First of all, look, there is not necessarily a change of the process. Sometimes where you develop drugs, there are processes that are suitable for the early clinical stage, and they are not necessarily suitable for larger clinical production, commercial production. This sometimes use different technologies with this process. I don't believe that there was any comment around these. It's more in and around. It's in the nature of what we do. Bench scale is not same on industrial scale. It is an industrial, what we use here, it is an industry standard process that is used for this type of therapy used in many other programs. I believe the data continue to be pretty sound also, with regards of the use of this process. That being said, you know, we are in an industry where we always look at opportunities to further enhancing processes. As it stands today, this is an industry standard, is more suitable for the large commercial volumes and the data are supporting the use of this process. Okay, got it. Thank you. Maybe just one final one for me on Sarepta. You mentioned already having product for initial dosing of patients and understand that SRP-9001 is a big opportunity moving forward. How should we think about the potential revenue in fiscal 2024, given Sarepta said during the AdCom that it only expects to treat about 100 patients in the 1st six months post-launch. Does this mean that we could actually see a step down in revenue from this program in fiscal 2024, especially considering Thermo could be up and running by then? Thank you. Look, if, on the basis that the product is approved, as or received, accelerated approval, I want to be more specific, surely, I do not expect that there would be a reduction. Okay, perfect. Thank you for taking our questions. We will take our next question from John Sourbeer with UBS. Your line is open. Hi, thanks for taking the question. You know, I just wanted to dig in a little bit deeper on some of the emerging biotech that you mentioned, earlier. I guess, you know, some of your peers have provided what% of revenue is there exposed. You know, would you be willing to provide that and maybe even, you know, ex Sarepta and gene therapy, what does that look like for your customer base? You know, you mentioned that there were no customer cancellations, assuming that, you know, some of these companies have no capital, do you think that maybe these assumptions here are a little bit more too optimistic and that, you know, there could be cancellations here, you know, moving into next year? Yeah. I mean, whenever I make a commentary, I'm making comments around sizable, notable cancellations in our business because we are in the clinical world, in different modalities, there are all the time cancellations just because of the nature of the business. Most of these programs do fail as they go through the clinics. I just want to caveat that, you know, I was referring to large, notable commercial supply agreements that were potentially being canceled and can have a material impact on the company. With regards of your comment around optimism, I believe we've been pretty humble and open here in saying that, yes, we've been optimistic. I don't believe necessarily on the rate of cancellations. I believe we've been optimistic around the amount of assets which would have been entering the clinic or progressing through the clinic, in these last, call it 9 months. The pace at which this was happening now is very, very different from what it was, in 2021 and 2022. I would say mid 2020 to mid 2022. It's been a sharp correction, what we've seen from our observation standpoint, but you know, the science is still there and the potential, the unmet need for patients is still there, and the efficacy and safety profiles of these is still there. These are all elements that will bring this back at some point. Yes, we were optimistic. Yes, now we have learned, and we have a more realistic outlook. Yes, we continue to be bullish about the long-term prospects of these modalities. Got it. I guess just on the Brussels facility, you know, the previous press release didn't provide a timeline there. I just want to confirm, just the timelines and when you think that, you know, these productivity issues would be resolved. Just from, you know, a high level, can you remind us on an overview there, you know, what percentage of that facility is dedicated to Novo Nordisk and Wegovy? On the last question, I cannot give you that information. It's just simply that we're not authorized to share, without you know, our customers. I can tell you that for Brussels, we have now the facility is now finally fully up and running after some periods of challenges. Especially when you restart from these long periods, it's complicated to reach the ex-efficiency levels that you experienced before. I would say in total honesty, there's still a while. We are now at the full absorption. It's still a work in progress. I still believe that in Brussels, we're gonna have to do more work, and we'll require some more time, to be honest with you. You know, the good news there is that we have all the demand that we want because we have to recover on a lot of backlogs. The absorption and utilization is not going to be a problem. It's just recovering the manufacturing consistency that we had before and we're making very good progresses in that direction. This is something that just doesn't happen overnight when you experience the challenges that we have experienced. Got it. Thanks for taking the questions. We will take our next question from Sean Dodge with RBC Capital Markets. Your line is open. Yep. Thanks. Alessandro, you said, with the Bloomington tech transfers, the couple that you've won there and working to launch, they're a little more complex and taking longer than expected. Did I hear correctly those are done now and up and running? As we think about how meaningful those are, could you, I don't know, maybe compare the size of those relative to the COVID work in Bloomington that you're working to backfill? Sure. That's a great question. First of all, I believe that the technical challenges in adults that we experience, the cause of experience delay to the final steps of the validation of this program have been overcome now. Now is completing the last steps and waiting for the regulatory timing that is required to get ourselves in the position to move to commercial production. As we said this in our remarks, we expect now this to be a second calendar year 2023, impact in terms of these. These are meaningful products. I can tell you that at this point in time, our biggest concern is to have enough capacity more than demand. We're trying to make an effort of freeing up and installing additional capacity there so that we can support what we envision to be very high demand products because the end market is very strong and at the moment is not fully satisfied. It's difficult to make a parallel to the COVID times because these are very different products. I can tell you from a profitability standpoint, we are aligned in terms of the margin. Clearly, you need to understand that there is no product in the world that will ever be produced in 1 billion doses in 18 months. That is never gonna repeat in terms of what we've done in Bloomington. I believe that was a little bit of a unique situation. net of that, which we have now already washed out of our numbers, it's a very healthy portfolio that we have down there. Okay, great. You pointed out that you all continue to win new business, including an expansion with Novo. When was that expansion signed? Maybe is there any more color you can provide there? Is this kind of involving you working with them on more products, or is this expanding what you're doing with them beyond the Brussels facility? Yeah, sure. Look, it's clearly as we bring the new assets online. These assets are in high demand, as you can expect. We said repeatedly, and also some of our competitors are giving same information, right? When you look at these, you know, clearly when you have these new assets coming online, the first thing you do, you offer them to your existing partners with which you have a very healthy, established, and fruitful discussion. Many time, more times than not in the recent months, those customers have picked up on the offer to go in some other sites and to go to some other capacity and bigger capacity. I believe that's very, very exciting for us. The fact that customers continue to give us confidence and continue to want to serve from us, it's probably the best thing that can happen to us. Okay. All right, great. Thanks again. We will take our final question from Justin Bowers with Deutsche Bank. Your line is open. Thank you, good morning. Just have two sort of broader questions, then I'll follow up offline with the rest. With respect to gene therapy, and I'm just piecing together a few comments from the call, but you did say that you have additional suites coming online through the end of the year. I'm curious if that's referring to BWI 2 and if you mean through the end of this calendar year. The second part of that would be you had some comments around seven quarters of production waiting to be released. Is that reflected in the, sort of in the contract asset on the balance sheet? I'll pause there until the second one. Mr. Maselli, are you there? Yes. Sorry, was that... Oh, I apologize. This is the operator. Okay. Our speaker line is still connected. However, I am not hearing any audio from them. Please stand by. Ladies and gentlemen, we appreciate your patience. Please continue to stand by while we reconnect our speakers. We will resume momentarily. Ladies and gentlemen, we appreciate your patience. Please continue to stand by while we reconnect our speakers. We will resume momentarily. Ladies and gentlemen, thank you for your patience. We do have our speakers reconnected. Sorry, everyone. We had an outage here at our location, we are reconnecting from mobile. Can you please ask again the last question? Yeah, sure. It's two questions, one related to gene therapy and then one just related to the guide down. With respect to gene therapy, you talked about bringing new capacity online. I'm just curious if the timing, is that through the end of this year, and is that related to BWI and all eight suites that you've sort of talked about before? Part two of that is you also said that you have sort of seven quarters of production, I believe waiting to be released in the contract assets. I don't wanna paraphrase, but I just wanna clarify that that is what you said. That's related to gene therapy. I'll come back with the second one on the guide. Let me address the last one. I didn't say several quarters, I said a few. It means I just was saying that it's not, it's not a contract. The process length is not three months. Is more, is longer than that. It depends on a few things. You need to think about the process length from the start to finish somewhere in the several months type of timeframe. We are working actively to reduce that. With regards of the suites, yes, it's BWI, the ones we were referring to. You don't have to think about this as a binary event. They told us at the start that you have all these suites. These suites have the ability to come online progressively, in, in sync couples, call it, so because the facility allows that to happen. You have two, then another two, another two, and, over the next few months, we're gonna bring online this additional capacity. Understand. That makes sense. Was that one of the inspections related to those suites as well? Then just the other parts that in terms of the contract terms, since you're still doing it on percentage of completions, it sounds like the amendment that you're looking for is maybe around invoicing. Is that fair? The first part of the question, look, the inspection is never by suite. You inspect the whole facility. For us, from a regulatory standpoint, BWI and BWI 2 belongs to the same campus, you need to look at these. When you get inspected, the inspection is relevant to the entire campus. That's the answer to your first part of the question. Very pleased that those inspections were successful because again, it's an impact that, you know, these are inspections related to that, but they have an impact on your whole facility. Very pleased with that outcome. With regards of the terms, look, we can all probably a little bit of a clarification here. Ricky was referring to some other terms of the contract with regards of our revenue recognition mechanisms there beyond the percentage-of-completion. I do believe that we have an opportunity to. We are already making progresses in terms of, setting the different milestones for invoicing of this contract asset going forward, that we're gonna continue to work against these objectives. Okay. Just quickly on the change in the guide, it sounded like of the $500, that $400 was related to forecasting and then the other $100 was related to sort of the one-timers. I just want to clarify that. Of the one-timers, you guys did spike out, sort of $55 million in inventory markdown. Is that one of those one-timers, and is that running through the PNL with the new guidance? Thank you. Yeah, If I take that, Alessandro, I would say that you're right about the 55 in terms of being the one of the one-timers. After that one-timer, I would estimate it to be roughly split equally, 50/50 between the forecasting challenges that Alessandro referred to and the operational and productivity challenges being the second issue for the call down on our guidance. Yeah. I would add that, you know, when you think about one-timer, Ricky refers to one-timer, if you like, more from a financial accounting standpoint, but even also in the execution challenges, there are issues that we deem temporary nature, which we are addressing. We don't believe that they will affect long-term the business performance from a profitability standpoint. Okay. appreciate the time. All right. And- Yeah. I apologize. Ladies and gentlemen, that concludes the question and answer portion of today's call. I will now turn the call back to Mr. Alessandro Maselli for closing remarks. Thank you. Thank you everyone for taking the time to join our call and your continued support of Catalent. Ladies and gentlemen, this concludes today's conference call, and we thank you for your participation. You may now disconnect.