Concord Biotech Limited is an India-based biopharma company and one of the leading global developers and manufacturers of select fermentation-based APIs across immunosuppressants and oncology in terms of market share, based on volume in 2022, supplying to over 70 countries including regulated markets, such as the United States, Europe and Japan, and India. The Company manufacture (i) bio- pharmaceutical APIs through fermentation and semi-synthetic processes, across the therapeutic areas of immunosuppressants, oncology and anti-infectives; and (ii) formulations, which are used in the therapeutic areas of immunosuppressants, nephrology drugs and anti-infective drugs for critical care.
- In 2016, they launched their formulation business in India as well as emerging markets, including Nepal, Mexico, Indonesia, Thailand, Ecuador, Kenya, Singapore and Paraguay, and have further expanded to the United
- As of March 31, 2023, they had 23 API products. The Company had filed 128 Drug Master Files (“DMFs”) across several countries for their APIs, including 20, 65 and four, respectively, in the United States, Europe and Japan, as of June 30,
- They are amongst the few companies globally that have successfully and sustainably established and scaled up fermentation-based API manufacturing capabilities.
- As of March 31, 2023, the Company had three manufacturing facilities in the state of Gujarat, India, comprising API manufacturing facilities in Dholka and Limbasi and a formulation manufacturing facility in Valthera, which were commercialized in 2000, 2021 and 2016,
- They have established two DSIR-approved R&D units with 148 members as of March 31, 2023, including members having doctoral qualifications.
- Concord Biotech had over 200 customers in over 70 countries as of March 31, 2023, for their APIs and
KEY MANAGERIAL PERSONNEL
- Sudhir Vaid is one of the Promoters of the Company and the Chairman and Managing director of the Company Previously, he was associated with Ranbaxy Laboratories Limited, Lupin Chemicals Limited and as a part of M/s. Sudman Consultants acted as a consultant for companies such as Plus Chemicals S.A., Lek Pharmaceuticals & Chemicals Co. and Biocon India Limited.
- Ankur Vaid is one of the Promoters of the Company and the Joint Managing Director and the Chief Executive Officer of the company. He has been associated with the Company since 2009 and has more than 15 years of experience in the pharmaceutical industry.
- Lalit Sethi is the Chief Finance Officer of the company. He joined the Company on March 14, 2022. He is a chartered accountant and was previously associated with companies such as Tilaknagar Industries Limited, High Polymer Labs Limited, Dabur India Limited, British Health Products (India) Limited, East India Hotels Limited and American Express Bank Limited.
- Prakash Sajnani is the Company Secretary and Compliance Officer, and Assistant Vice President(Finance) of the Company. He has been associated with the Company since February 15, 2006. He has been associated with the Company for more than 18 years as a General Manager.
COMPETITIVE STRENGTHS
- Established presence across the complex fermentation value chain.
- Global leadership in immunosuppressant APIs along with a wide spectrum of complex fermentation-based APIs across multiple therapeutic areas.
- Scaled manufacturing facilities with a consistent regulatory compliance track record and supported by strong R&D capabilities.
- Diversified global customer base with long-standing relationships with key customers.
- Experienced Promoters, management team supported by marquee investor.
- Financial track record of rapid growth and consistent profitability
KEY STRATEGIES
- Continue to increase its API market share and further develop its portfolio.
- Increase the presence of their existing formulations and expand into new formulations.
- Improve cost management and operational efficiencies.
KEY CONCERNS
- Dependence on a limited number of customers for a substantial portion of its revenues.
- They have significant working capital requirements. If they experience insufficient cash flows to fund their working capital requirements, there may be an adverse effect on the business.
- Their international operations expose them to complex management, legal, tax and economic risks, which could adversely affect their business.
- They operate in a highly-regulated industry and various aspects of their operations are subject to extensive laws and regulations in India and internationally.
- The pharmaceutical industry in which they operate is highly competitive
COMPARISON WITH LISTED INDUSTRY PEERS (AS ON 31ST MARCH 2023)
FINANCIALS (RESTATED CONSOLIDATED)
OUTLOOK & VALUATION
Concord Biotech is a leading fermentation-based API company with a strong track record. The company has a diversified global customer base, strong R&D capabilities, and scaled manufacturing facilities. However, its international operations expose it to complex management, legal, tax, and economic risks. Additionally, the industry has been facing margin pressure in recent quarters. It is also worth noting that this IPO is purely an OFS, meaning that the company will not receive any proceeds from the offering. While the valuations may not appear overly attractive, this IPO could still deliver a moderate return, thus investors may apply for listing gain.
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