Anthem Biosciences

• Anthem Biosciences is coming out with a 100% book building; initial public offering (IPO) of 6,28,85,959 shares of Rs 2 each in a price band Rs 540-570 per equity share.
• Not more than 50% of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5% to the mutual funds. Further, not less than 15% of the issue will be available for the non-institutional bidders and the remaining 35% for the retail investors.
• The issue will open for subscription on July 14, 2025 and will close on July 16, 2025.
• The shares will be listed on BSE as well as NSE.
• The face value of the share is Rs 2 and is priced 270 times of its face value on the lower side and 285 times on the higher side.
• Book running lead managers to the issue are JM Financial, Citigroup Global Markets India, J.P. Morgan India and Nomura Financial Advisory and Securities (India).
• Compliance Officer for the issue is Divya Prasad.

Profile of the company

Anthem Biosciences is an innovation-driven and technology-focused Contract Research, Development and Manufacturing Organization (CRDMO) with fully integrated operations spanning across drug discovery, development and manufacturing. It is one of the few companies in India with integrated New Chemical Entity (NCE) and New Biological Entity (NBE) capabilities across drug discovery, development, and commercial manufacturing. As a one-stop service provider, it serves a range of customers, encompassing innovator-focused emerging biotech and large pharmaceutical companies globally. It is one of the youngest Indian CRDMO companies and the fastest Indian CRDMO among the assessed peers to achieve a milestone of Rs 10,000 million of revenue within 14 years of operations, reaching this milestone in Fiscal 2021. It also recorded the highest revenue growth in Fiscal 2024 to Fiscal 2025 as compared to its assessed peers in India and globally.

The company’s business comprises CRDMO services and the manufacture and sale of specialty ingredients. Its CRDMO business caters to customers in regulated markets, while its specialty ingredients business complements its CRDMO business by targeting both regulated markets (such as United States and Europe) as well as semi-regulated markets (such as India, South and Southeast Asia, Latin America and Middle East). Its specialty ingredients business enables it to draw on its technological capabilities across biology and chemistry and leverage its fermentation capacity to manufacture and commercialize specialty ingredients as an additional revenue stream.

In addition to serving large and mid-scale and pharmaceutical companies, it also serves small pharmaceutical and emerging biotech companies. While large multinational pharmaceutical companies currently dominate the global pharmaceuticals market, there is a growing prominence of small pharmaceutical and biotech companies which reflects a broader shift in the pharmaceutical industry towards novel therapies and innovation-driven growth. The market share of small pharmaceutical and biotech companies is expected to increase at a faster rate of a CAGR of 8.5% as compared to a CAGR of 4.9% for large pharmaceutical companies between 2024 and 2029.

Proceed is being used for:

• Carrying out the Offer for Sale of Equity Shares of face value of Rs 2 each by the Selling Shareholders
• Achieving the benefits of listing the Equity Shares on the Stock Exchanges

Industry Overview

The Indian CRDMO industry is one of the fastest-growing globally, having grown at a CAGR of 13.2% between 2019 and 2024. India is an emerging hub for pharma innovators and is gaining significant prominence due to multiple growth tailwinds in the APAC region. The Indian CRDMO is poised to grow at 13.4% CAGR between 2024 and 2029 to reach an estimated value of $15.4 billion in 2029, outpacing the global industry rate of 9.1% (2024 to 2029) and other markets such as the PRC due to the implementation of the US BIOSECURE Act, which makes India a front runner in the CRDMO outsourcing business. With multiple structural tailwinds in place and supported by the strong credentials of Indian CRO and CDMO players, India will likely garner a higher share of the global pharma outsourcing industry. The Indian CRO market grew 15.1% from $1.0 billion in 2019 to $2.0 billion in 2024, while the CDMO market grew at a CAGR of 12.6% to $6.2 billion in 2024. The Indian CRO market is forecasted to reach $3.6 billion in 2029, while the CDMO is estimated to be $11.8 billion during the same period.

Indian CRDMO industry has largely been dominated by small molecules with their proportion constituting more than 92% of the total industry in 2024. However, the salience of biologics (large molecules) in Indian CRDMOs is expected to continue to improve given higher growth rates relative to small molecules. The biologics (large molecules) segment in India grew rapidly between 2019 and 2024 at a CAGR of 23.2% to reach $0.7 billion in 2024 and is estimated to grow at 15.5% CAGR from 2024 to 2029. In the value chain functions, development and commercial manufacturing contribute to 76.8% of the Indian CRDMO market in 2024 and are expected to grow at 14.9% and 12.8% between 2024 and 2029, respectively. The growth can be attributed to significant improvements in the technical capabilities of Indian companies, which attract manufacturing outsourcing demand from global pharma companies. Indian companies are also growing their integrated offerings with an increased focus on various therapeutic segments, including biologics (large molecules).

Meanwhile, Active Pharmaceutical Ingredient (API) is any substance or combination of substances used in a finished pharmaceutical product (either small molecules or biologics (large molecules)), which is intended to furnish pharmacological activity or to otherwise have a direct effect in the diagnosis, cure, mitigation, treatment or prevention of disease, or to have direct effect in restoring, correcting or modifying physiological functions in human beings. The effectiveness and safety of a drug are closely linked to its precise API. As pharmaceutical demand rises, so does the need for APIs. The global API market was valued at $285.2 billion in 2024 and is projected to reach $399.9 billion by 2029, driven by increased drug consumption, including biologics (large molecules) and small molecules. 

Pros and strengths

Offers comprehensive one-stop service capabilities across the drug life cycle: The company offers a comprehensive, integrated and highly customizable range of CRDMO services across the NCE and NBE lifecycle, from target identification and lead selection to preclinical development, supporting its customers by manufacturing development batches of molecules used for clinical (Phase I, II, III) trials, and by offering commercial manufacturing. It is one of the few Indian companies with integrated NCE and NBE capabilities across all three segments of drug discovery, development and manufacturing. It is also the only CRDMO in India among the assessed peers with a strong capability in both small molecules and biologics (large molecules).

Innovation-focused approach has enabled it to offer a spectrum of technologically advanced solutions: Since its inception in 2007, the company’s core focus has been to adopt a culture of innovation across its business practices and work towards building unique advanced technological capabilities. It is one of the few Indian companies which focuses on new biologics (large molecules) platforms and it offers a wide range of technology capabilities for drug development relative to its assessed peers focusing on biologics, including biotransformation, flow chemistry, RNAi platforms, and fermentation-based manufacturing. Its CRDMO platform comprises 5 main modalities (RNAi, ADC, peptides, lipids and oligonucleotides) and 4 manufacturing capabilities (custom synthesis, flow chemistry, fermentation and biotransformation). It is the only CRDMO in India among the assessed peers with a strong capability in both small molecules and biologics (large molecules).

Differentiated business model catering to the needs of small pharmaceutical and emerging biotech companies: While large multinational pharmaceutical companies currently dominate the global pharmaceuticals market, there is a growing prominence of small pharmaceutical and biotech companies which reflects a broader shift in the pharmaceutical industry towards novel therapies and innovation-driven growth. The market share of small pharmaceutical and biotech companies is expected to increase at a faster rate of a CAGR of 8.5% as compared to a CAGR of 4.9% for large pharmaceutical companies between 2024 and 2029. Small pharmaceutical and biotech companies are typically characterized by their innovative approaches to drug development and grow faster than large pharmaceutical companies, enabled by substantial venture capital funding.

Wide specialty ingredients portfolio: In its specialty ingredients business, it has leveraged its technological capabilities across biology and chemistry and developed and commercialized specialty products, serving as a complementary revenue stream. The specialty ingredients market is broadly divided into biosimilars which includes microbial and mammalian, vitamin K2, probiotics, peptides, industrial enzyme, protease, serratiopeptidase, nutritional actives and, vitamin analogues. Its specialty ingredients business demonstrates its technological capabilities as it often involves the use of complex methods. For instance, it successfully produced and commercialized natural Vitamin K2 (Menaquinone-7) through an innovative biotransformation process, combining chemical synthesis and fermentation. Its specialty ingredients portfolio includes Fermentation Products, Probiotics, Enzymes, Nutritional Actives, Vitamin Analogues, Biosimilars and APIs.

Risks and concerns

Maximum revenue comes from limited customers: It depends on certain key customers for a significant portion of its revenues. The company has garnered 70.92%, 65.07% and 65.80% of its total revenue from its top 5 customers in FY25, FY24 and FY23 respectively. The loss of one or more of these significant or key customers or a reduction in the amount of business it obtains from them could have a material adverse effect on its business, results of operations, financial condition and cash flows.

Business depends on the demand for its CRDMO services: The company is primarily engaged in the provision of CRDMO services. The company has garnered 81.65%, 76.31% and 76.46% of its total revenue from CRDMO services in FY25, FY24 and FY23 respectively. The company’s business from such industries may be affected by factors beyond its control. These include cost pressures, which have increased significantly per NBE or NCE, surpassing $1.0 billion per drug, success rates, and uncertainty of the drug approval process, ability to secure private equity and venture capital funding, and increased regulatory oversight. The amount that its customers spend on the development and manufacture of their products, particularly those which are outsourced, substantially impacts its revenue and profitability.

Dependent on overseas suppliers for procurement of raw material: The company is dependent on overseas suppliers, and its procurement from overseas suppliers increased from 24.60% of its total cost of materials procured in Fiscal 2024 to 48.41% of its total cost of materials procured in Fiscal 2025 primarily due to its reliance on a single-source overseas supplier in the PRC. Any price increases or interruptions of such supply from overseas sources may adversely affect its business, financial condition, results of operations and prospects.

High working capital requirements: The company has high working capital requirements and have incurred significant capital expenditure and increasing net working capital during the last three Fiscals. It may require substantial financing for its business operations and planned capital expenditure, including for the expansion of its facilities, and the failure to obtain additional financing on terms commercially acceptable to it or at all may have an adverse effect on its business, results of operations, financial condition and cash flows.

Outlook

Anthem Biosciences is an innovation-driven and technology-focused CRDMO with fully integrated operations encompassing drug discovery, development, and manufacturing processes. The company is one-stop service across the drug life cycle (discovery, development, manufacturing) for small molecules and biologics; it is India's fastest growing CRDMO. It has Specialized business model for small pharmaceutical and biotech companies, from discovery to manufacturing. On the concern side, the company’s business depends on the demand for its CRDMO services and any adverse impact on its CRDMO customers’ business or the industries in which they operate may have a material adverse effect on its business. Moreover, the company depends on certain key customers for a significant portion of its revenues and any inability to retain its key customers or decrease in revenues from any of its key customers could negatively affect its business and results of operations.

The issue has been offering 6,28,85,959 shares in a price band of Rs 540-570 per equity share. The aggregate size of the offer is around Rs 3395.84 crore to Rs 3584.50 crore based on lower and upper price band respectively. Minimum application is to be made for 26 shares and in multiples thereon, thereafter. On performance front, revenue from operations increased by 29.96% to Rs 18,445.53 million in Fiscal 2025 from Rs 14,193.70 million in Fiscal 2024. Such increase in revenue was primarily due to an increase in revenue from its CRDMO business, mainly from exports sales in the United States and European countries. Moreover, profit for Fiscal 2025 increased by 22.85% to Rs 4,512.59 million in Fiscal 2025 from Rs 3,673.10 million in Fiscal 2024.

The company intends to leverage on its technological capabilities across chemistry and biology to attract new and existing customers to secure its pipeline of future projects across the discovery and development phase. For example, it aims to expand its technological capabilities to include laboratory-scale photochemistry and electrosynthesis capabilities, which are alternative procedures for the synthesis of new complexes. Photochemistry is expected to be experimentally simpler, less expensive and more environment friendly than the thermal alternative, and electrosynthesis can help replace harmful terminal oxidizers and reducing agents produced. As a result, both technologies are expected to support its efforts to move towards greener chemistry. Going forward, the company has focused on adding new technologies and expanding them from laboratory-scale level to commercial scale cGMP manufacturing, and it intends to continue to seek ways to increase the number of its commercial scale cGMP manufacturing capabilities.