(Adds details, comments from conference call and shares)
By Tamara Mathias
Sept 19 (Reuters) - U.S. drug contract manufacturer Catalent Inc agreed to buy Cook Pharmica LLC for $950 million in cash as the company doubles down on its fast-growing business of supplying biologics to drugmakers.
Catalent's shares fell as much as 2.8 percent to $38.79 on Tuesday, before recovering slightly.
The deal is the latest in the consolidating global contract manufacturing industry and comes when drugmakers are outsourcing more of their development and manufacturing to cut costs.
Swiss pharmaceutical supplier Lonza Group AG last year said it would buy Capsugel, a U.S. maker of capsules and other drug delivery systems, for $5.5 billion.
The deal gives Catalent access to Cook Pharmica's Bloomington, Indiana facility, which specializes in developing biologics-based drug compounds or products.
Share of biologics, or drugs manufactured from living organisms, will account for about 21 percent of the combined entity's pro-forma revenue, Catalent said on a conference call.
Biologics account for about 14 percent of Catalent's consolidated revenue currently.
The acquisition is "pricey, but important", said Wells Fargo analyst Tim Evans, as it enables Catalent to beef up previously weak areas of manufacturing active ingredients and final dosage forms of biologic drugs.
Catalent said it would pay $750 million when the deal closes, expected in the second quarter of the company's fiscal 2018, and the rest in four annual installments.
Cook Pharmica, a unit of medical device maker Cook Group Inc, generated $179 million in revenue for its year ended June 30.
The acquisition will add to adjusted net income per share in the first full fiscal year after the deal closes, Catalent said.
Catalent said it expects to fund the deal with about $450 million of new debt and $250 million of equity and has obtained financing from Morgan Stanley, J.P. Morgan, RBC Capital Markets and BofA Merrill Lynch.
Morgan Stanley is the financial counsel and Fried, Frank, Harris, Shriver & Jacobson LLP the legal counsel to Catalent.
Reporting by Tamara Mathias in Bengaluru; Editing by Sai Sachin Ravikumar and Sriraj Kalluvila