Rare Enterprises and Quadria Capital-backed Concord Biotech files DRHP for IPO
Chennai, 16.08.22: Concord Biotech Limited, 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 2021 has filed its Draft Red Herring Prospectus (DRHP) with the markets regulator, Securities and Exchange Board of India (SEBI), to raise funds through an initial public offering (IPO).
The issue with a face value of Re 1 per equity share is a complete offer for sale (OFS) aggregating to 20,925,652 equity shares by Helix Investment Holdings Pte. Limited. The offer also includes a reservation for a subscription by eligible employees.
The Offer is being made through the Book Building Process, wherein not more than 50% of the Offer shall be available for allocation to Qualified Institutional Buyers, not less than 15% of the Offer shall be available for allocation to Non-Institutional Bidders and not less than 35% of the Offer shall be available for allocation to Retail Individual Bidders.
As per the F&S report stated in its DRHP, Concord Biotech commands a market share of over 20% by volume in 2021 across identified fermentation-based API products including dactinomycin, sirolimus, tacrolimus, mycophenolate sodium, and cyclosporine. It supplies to over 70 countries including regulated markets such as the United States, Europe, Japan, and India.
The DRHP additionally states that Fermentation is a challenging process as it involves working with microbial strains and culture, controlling multiple process parameters, and performing various purification steps.
As of March 31, 2022, it had a portfolio of 56 brands and 65 products including 22 APIs and 43 formulations. In addition, it had 80 out-licensed formulations which they distributed in India under their brands. It has filed over 120 DMFs across several countries.
The Ahmedabad-based biopharma firm is amongst the few globally that has successfully and sustainably established and scaled up its fermentation-based API manufacturing capabilities. It has three production sites in the state of Gujarat located out of Valthera, Dholka, and Limbasi having a total installed fermentation capacity of 1,250 m3 .
Some of Concord Biotech’s API clients include Intas Pharmaceuticals Limited and Glenmark Pharmaceuticals Limited. As of March 31, 2022, it had over 200 customers and its ten largest clients had a relationship with them for an average of nine years in FY22. It plans to increase its wallet share from its existing API customers and pursue growth in formulations in India, Emerging Markets, and the United States.
In India, CBL markets immunosuppressant, nephrology, and anti-infectives drugs for critical care, which they market under its own brands and through its sales force model. As of March 31, 2022, it offered formulations across 20 states and five union territories in India, covering over 1,500 government and corporate hospitals.
The company’s revenue from operations increased by 15.56% to Rs 712.93 crore for the Financial Year 2022 from Rs 616.94 crore for the Financial Year 2021, primarily due to an increase in the sales volume of its products to existing customers; sales to its new customers; and increase in prices of some of the products, which was partially offset by the decrease in prices of certain products, while profit for the financial year 2022 stood at Rs 174.93 crore.
The global small-molecule fermentation-based API market is expected to reach US $13 billion (Rs 966 billion) in 2026 at a CAGR of 3.6% from 2021 to 2026. The immunosuppressant drug market is expected to grow at a CAGR of 9.6% from 2021 to 2026. The Oncology drug market, the largest segment among the therapeutic areas in the API market, is expected to reach US $67 billion (Rs 4,978 billion) by 2026. The anti-infective market, one of the largest segments by revenue among the therapeutic areas in the API market, is expected to reach US $36 billion (Rs 2,675 billion) by 2026.
Kotak Mahindra Capital Company Limited, Citigroup Global Markets India Private Limited, and Jefferies India Private Limited are the book running lead managers and Link Intime India Private Limited is the registrar to the offer. The equity shares are proposed to be listed on BSE and NSE.