Alessandro Maselli
President and Chief Executive Officer at Catalent
Thank you, Paul and welcome everyone to the call. Before turning to our results for the quarter, I want to address the Bloomberg News report that appeared over the weekend. Not only to say that as a matter of policy, we do not comment on market rumors with that topic out of the way. Our second quarter results met our expectations, have strengthened our forward momentum for our strategic plans, highlighted by expanded collaborations with the strategic partners, significant new business wins in our drug product and gene therapy offerings, renewed business development in drug substance and exceptional demand for our worth leading Zydis fast-dissolve technology.
As we pass the midway point in fiscal 2023, I would like to first look back at the past six months. Our non-COVID business continued to show good strength as we grew organic constant currency net revenue above market at approximately 12%, despite softness in nutritional supplement demand. We brought online a new capacity to support areas of market with anticipated high-demand particularly prefilled syringes, viral vector manufacturing and Zydis.
We executed our plans to meet the increasing demand for fit for scale, high potent drug manufacturing through the acquisition of Metrics. We are very pleased that with it's overall performance out of the gate, including the recent FDA approval of two new high potent drug, so that Metrics is manufacturing.
Broadening our lands, since the beginning of 2022, Catalent has been a manufacturing partner for a total of seven new approvals across our FDA approvals across our network. In addition, we touched approximately 50% of all FDA approvals through that time through our critical Clinical Supply, analytical support and early development service offerings. We have agreed and announced, expanded and extended the partnership with two of our largest customers. All of these, but it is our strategy of providing to our partners a comprehensive portfolio of services, underpinned by our operational and excellent track record, which together position Catalent to be the partner of choice to maximize the potential of their pipelines and allows us to continue to increase our share of the most valuable molecules in the CDMO market.
Looking-forward, I'm very excited to be leading Catalent in the next chapter of our journey. We have a clear mission to help people live better healthier lives. At an investor conference last month, I discussed several aspects of Catalent that should excite everyone about our premier place in the market and the growing opportunities in front of us. Among other things, I noted continuing growth of our total addressable market, which you can see on Slide six.
Our strategic investment have materially expanded our total addressable market will provide us with greater future growth opportunities. Since fiscal 2017, we have invested over $7 billion to enable accelerated growth in exciting segments of the CDMO market and those moves have expanded our opportunities. In fiscal 2019, we addressed our $35 billion market. After our thoughtful diversification including investment in technology, capacity and new capabilities, today we address a $70 billion market, is an active and scale player in many of the largest, fastest-growing segments in our space.
Looking ahead to fiscal 2026, we anticipate our addressable market growing another 40% to $100 billion across the markets in which we operate and we are incredibly well-positioned to continue to increase our share in these markets overtime.
Now moving on to the highlights of the second quarter. As expected, the our second quarter results compared to the prior year period were negatively impacted by the lower year-on-year demand for COVID related products. However, notably, revenue from COVID products grew sequentially as we were the primary US Fill and Finnish side for a pediatric booster vaccine that received emergency use authorization during our Q2.
Net revenue of $1.15 billion was down 6% on a reported basis or a 2% decrease on a constant currency basis compared to the second quarter of fiscal 2022. When we exclude the impact of acquisition and divestitures, our organic revenue declined 4% measured in constant currency. I would like to call out the tower organic non-COVID revenue grew approximately 4% in the quarter in constant-currency, including double-digits growth in our Biologics segment. This is a slower growth realized in the first quarter because we prioritize that the launch of the pediatric booster and COVID related work tower Bloomington facility.
We expect consolidated non-COVID revenue growth for the remainder of the fiscal year to be more in-line with the Q1 levels, which was more than 20% on a constant currency organic basis, as we address our large backlog of non-COVID work, particularly in our gene therapy and drug product offerings and our PCH business returns to growth.
Our second quarter adjusted EBITDA of $283 million declined 9% as reported or 6% on a constant currency basis, compared to the same quarter of fiscal 2022, when excluding M&A, the organic adjusted EBITDA decline was 7% mission in constant-currency.
Moving to slide eight, I would like to cover some data regarding our COVID related revenue that we addressed during the recent public webcast. Our revenue guidance assumed an approximate $750 million decline in COVID related revenues from approximately $1.3 billion in COVID revenue we recorded in fiscal 2022. We are actually tracking slightly better than previously reported, with approximately $450 million in COVID revenue recorded in the first half of the fiscal year and expected additional demand in the fourth quarter to prepare for a seasonal COVID vaccine in the fall, which is expected to result in fiscal 2023 COVID revenues that is more than $600 million.
Having said that, given the expected near seasonality of the product, we expect minimal revenue contribution from COVID products in Q3, resulting in a decline of COVID related revenue of nearly $350 million when compared to the third quarter of fiscal 2022, which was our peak COVID quarter.
Moving on, we continue to position ourselves as the industry partner of choice across the Pharma, biotech and consumer health sectors. Our position has been further validated by two significant strategic partnership expansions. First, we will be extending and expanding our manufacturing partnership with Moderna, which will see Catalent support the manufacture of multiple Moderna products in multiple formats across our North American and European Biologics drug product network.
Catalent will continue to provide the drug product fill and finish service and production capacity for Moderna's COVID-19 programs. In addition, there are plans to extend the non-COVID 19 program such as two non-COVID 19 programs such as Flu and RSV vaccines from our manufacturing site in Bloomington, Indiana as well, extending the partnership to support Moderna from our state-of-the art European facility in Anagni, Italy.
We look-forward to our stated long-term relationship in helping Moderna advance its robust mRNA pipeline. Second, we recently expanded our existing manufacturing partnership with Sarepta. Catalent will be the Catalent primary commercial manufacturing partner for its leading the gene therapy candidate for the treatment of Duchenne Muscular Dystrophy, which has May 29 PDUFA date. The agreement was also created the mechanisms for Catalent to support multiple gene therapy candidates in the Sarepta pipeline for limb girdle muscular dystrophy.
To meet increasing demand for maturing gene therapy pipelines from Sarepta and other customers, we are ramping-up additional suites at our BWI camp later this year. Critical to our business in building strong partnership with our customers is our quality and regulatory track record. Quality and compliance are central to everything we do and our strong quality management system continues to be a differentiator for Catalent with several strong recent regulatory inspection results.
In addition to enhancing our strong quality performance, our management team and I have a renewed focus on improving efficiency across the organization and free-cash flow generation, as demonstrated by our recently executed restructuring activities. Tom will share additional details on these activities in a moment. He will also walk you through our fiscal 2023 guidance ranges which are unchanged from our November call.
On slide nine, we cover our recent progress in ESG areas. We have a strong commitment to ESG and customers and corporate responsibility at Catalent. We will soon publish our fiscal 2022 Corporate Responsibility Report, which shows our continued progress in this area. We have developed our sheer strategy to align to our patient first culture, enhancing our inclusive culture, which drives our commitment to operational and quality excellence. Our sheer strategy is focused on three main pillars, people, environment and communities, each of which is informed by our employees, communities, customer, investors and other key stakeholders.
We put patients and people first, invest in and show respect for our employees and promote responsible supply chain. This progress includes, completion of a third party human right assessment as part to our responsible supply chain initiatives, a sizable increase in diversity in our global leadership teams and extensive adoption of our employee resource group with our sites. For the environment, we are heavily focused on reducing our greenhouse gas emissions waste and water used, as you can see by the targets and initiative on the slide.
Finally, we get back to our communities by investing our time, talents and resources in certain patients. I'm proud of the increasing contribution that Catalent and employees made two communities we serve and we believe where we live and work. To close, we are uniquely positioned to leverage our cutting-edge technologies to advance healthcare innovation on behalf of our customers and their patients, while powering the next-generation of medicine. We have also created many opportunities for our business through our investment so that we may achieve long-term attractive growth. With the assets we have in-place, we are focused on executing our strategy to optimize our best-in-class CDMO ecosystem. We are maximizing asset utilization and free cash flow generation to enhance value for our customers, patients as shareholders.
With that, I will turn the call over to Tom.
