Anthem Biosciences

Anthem Biosciences Limited, a contract development and manufacturing organization (CRDMO), is set to make its public market debut. With innovation at its core and a growing global presence, the company is looking to ride India’s biotech and pharmaceutical outsourcing wave. But does the IPO offer long-term value to investors, or is caution warranted?

1. Company Overview

Founded in 2006 and headquartered in Bengaluru, Anthem Biosciences transitioned from a private to public limited company in December 2024. It is an innovation-driven, fully integrated CRDMO, spanning the entire pharmaceutical lifecycle—from drug discovery and development to manufacturing.

Promoters & Key Management:

• Ajay Bhardwaj – Chairman, MD & CEO

• Ganesh Sambasivam – Executive Director

• K. Ravindra Chandrappa – Executive Director

• Ishaan Bhardwaj

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2. Business Model & Services

Anthem offers end-to-end drug lifecycle solutions across two main verticals:

🧬 CRDMO Services (81.13% of H1 FY25 revenue)

• Spanning small molecules and biologics

• Includes cutting-edge modalities like ADCs, RNAi, peptides, and oligonucleotides

• Significant contribution from developmental and commercial manufacturing (73.06% of H1 FY25 revenue)

🧫 Specialty Ingredients (18.87% of H1 FY25 revenue)

• Fermentation-based APIs, including probiotics, enzymes, and nutritional actives

As of September 2024, the company was managing 199 active projects across various drug development stages.

Clients & Therapeutic Focus

Anthem serves emerging biotech firms and large pharma globally, with focus areas in:

• Metabolic disorders (e.g., GLP-1 agonists)

• Oncology (e.g., ADCs)

• Gene therapies (e.g., RNAi, oligonucleotides)

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3. Manufacturing Footprint

Operational Units

• Unit I (Bommasandra) and Unit II (Harohalli) – Fully operational

• Unit III (Harohalli) – Under construction (pilot plant partially operational as of July 2024)

• Units IV & V – Planned expansions in Harohalli and Hosur

Capacity Snapshot (as of Sep 30, 2024)

• Custom Synthesis: 269,912 L (78.6% utilization)

• Fermentation: 142,301 L (47.4% utilization)

• Largest fermentation capacity among Indian CRDMOs, expected to reach 182,000 L by mid-2025

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4. Competitive Strengths

✅ Fastest-Growing Indian CRDMO: Reached ₹10,000 million revenue in just 14 years
✅ Dual Strength in NCEs & NBEs: Rare in India to offer integrated solutions in both chemistry and biologics
✅ Sustainability Focus: 89.9% of energy used is renewable (FY24)
✅ Global Regulatory Approvals: USFDA, EMA, Japan PMDA-approved facilities
✅ Strong IP Portfolio: 7 patents granted globally, 17 pending
✅ Customer Stickiness: Over 675 clients and 8,000+ projects since 2007

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5. Financial Snapshot (₹ million)

MetricH1 FY25FY24FY23FY22Revenue from Operations8,635.5014,193.7010,569.2412,312.56Profit After Tax2,439.303,670.623,859.414,047.06Total Borrowings1,312.582,325.251,250.64354.91Total Equity22,043.7019,246.5517,406.6913,549.99Diluted EPS (Annualized)₹8.58₹6.48₹6.75₹7.11

Observations:

• Strong revenue momentum: 46.2% YoY growth in H1 FY25

• Temporary dip in profits in FY23 due to a Phase III failure and product withdrawal

• Borrowings have fluctuated with capex cycles

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6. IPO Details

DetailValueIssue Type100% Offer for Sale (OFS)Offer Size₹33,950 millionUse of ProceedsCompany receives no proceeds (OFS only)Price Band₹540–₹570 per shareFace Value₹2Listing ExchangesBSE & NSE**IPO Dates (Tentative)**July 14–16, 2025 (Listing on July 21)Employee ReservationUp to 5% of post-Offer equity, with discount

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7. Key Risks to Consider

⚠️ Customer Concentration:
Top 5 clients contributed 70%+ of revenue in H1 FY25. A loss of any key customer would significantly impact revenue.

⚠️ Drug Development Failures:
Heavy reliance on successful commercialisation of client molecules—some of which may fail clinical trials.

⚠️ Supply Chain & Forex Exposure:
Imports from China surged to 54.9% of material costs in H1 FY25, increasing geopolitical and forex vulnerability.

⚠️ Execution Risk:
Large capex plans in progress. Underutilization or delays could affect returns and cash flows.

⚠️ IPO is OFS:
Since this is a 100% Offer for Sale, none of the IPO proceeds will directly fund growth or reduce debt.

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8. Valuation & Investment Verdict

While exact P/E or EV/EBITDA multiples depend on the final listing price, the IPO is expected to price Anthem closer to peers like Syngene, Divi’s Labs, and Suven Pharma.

The Good:

• Rapid revenue growth and high-end biotech capabilities

• Strong regulatory track record and manufacturing scale

• Rising global demand for CRDMO services

The Caution:

• Customer concentration risk

• Supply chain exposure to China

• No fresh capital raised; purely an exit for existing investors

🎯 Verdict: Interesting

The fundamentals are promising, but the Offer-for-Sale nature and key customer reliance warrant due diligence. Long-term investors should review the full DRHP and compare valuations closely with listed peers.