Concord Biotech IPO, a primer

Concord Biotech Limited, an Indian biotechnology company founded in 2000 by Sudhir Vaid, is headquartered in Ahmedabad, Gujarat. The company, which has 1180 employees, specializes in manufacturing biopharmaceutical active pharmaceutical ingredients (APIs) through fermentation processes. Concord Biotech produces over 30 products across various therapy segments, including immunosuppressants, oncology, antifungal, and antibacterial. Notably, it was one of the first companies in India to develop the anti-immunosuppressant tacrolimus. For more information on a potential Concord Biotech IPO, see below.

Tacrolimus, classified as an immunosuppressant medication, is used in conjunction with other drugs to prevent organ rejection in transplant recipients, including those who have received a kidney, liver, lung, or heart transplant. It operates by reducing the activity of the immune system to prevent it from attacking the transplanted organ. Tacrolimus is available in various forms, including immediate-release capsules, granules for oral suspension, extended-release capsules, and tablets, each with specific instructions for use. It’s crucial to follow the prescribed dosage and not substitute different tacrolimus products without a doctor’s guidance. Tacrolimus treatment involves careful monitoring and adherence to special precautions, particularly due to its effects on the immune system and potential side effects like increased risk of infections, cancer, particularly lymphoma, and other serious health issues. It’s important for patients to discuss risks and follow specific dietary and lifestyle recommendations while on tacrolimus therapy​​.

Fermentation-based biopharmaceutical active pharmaceutical ingredients (APIs) are components of drugs produced using fermentation processes involving living organisms, typically microorganisms like bacteria or yeast. This method is particularly useful for producing complex molecules, such as antibiotics, hormones, and certain vaccines. In these processes, microorganisms are cultivated under controlled conditions to produce the desired biologically active substances. These APIs are crucial in the development and manufacturing of various biopharmaceutical products, offering advantages in terms of complexity and specificity that are often challenging to achieve through chemical synthesis.

Concord’s manufacturing facility in Ahmedabad has received approval from global regulatory bodies, including the U.S. Food and Drug Administration and the European Union’s Good Manufacturing Practice. The company also attracted a significant investment in 2016 when Quadria Capital acquired a 20% stake​​.

Concord Biotech IPO

Concord Biotech’s IPO, attracting strong investor interest, was listed at a 21% premium over its issue price on both NSE and BSE. The offering, supported by Rakesh Jhunjhunwala, was subscribed 24.87 times, with different investor categories showing varied levels of subscription. Established in 1984, Concord Biotech, a research-driven biopharma firm, is a key player in fermentation-based APIs, particularly in immunosuppressants and oncology. The company has a global reach, operating in over 70 countries, including the USA, India, Europe, and Japan.

Concord Biotech posted Net Income of ₹240 crore (US$30 million) on revenue of ₹853 crore (US$110 million) in fiscal 2023.

At least one analyst believed shares of Concord could go even higher.

In September, Kotak Institutional Equities said the company shares could rise as much as 30 per cent and has a current price target of ₹ 1,110. (approximately $14.80 USD). The call was prescient as shares of Concord Biotech closed December 15th at ₹ 1,321.00 (approximately $17.61 USD)

“Founded by a technocrat, Concord’s focus lies on niche, high-value molecules across immunosuppressants, anti-infectives and oncology, wherein complex fermentation processes and difficulties in scaling up are key entry barriers,” the firm’s analysts said.