BF Biosciences Plans to Raise Rs1.38 bn to 1.93 bn in Sept. 2024 through IPO

BF Biosciences Limited looks to raise 1.38 bn to 1.93 bn through issuing 28.3% new shares through an Initial Public Offering (IPO) on September 25-26.

Speaking at the pre-IPO investors road show held in Karachi, Mr. Osman Khalid Waheed Director of BF Biosciences informed that BF Biosciences, a leader in the biotech pharmaceuticals sector in Pakistan, is raising between 1.38 and 1.93 billion PKR to expand its key product lines and obtain export certifications. This strategic initiative is expected to drive significant growth in both the company’s topline and profitability as company has already completed a brownfield expansion and IPO will also help the company to manage working capital needs of the aforesaid expansion.

Mr. Farhan Rafiq, COO BF Biosciences informed investors that Pakistan’s first biopharmaceutical manufacturer, BF Biosciences Limited, is a joint venture company of Ferozsons Laboratories Ltd and Bago Group of Argentina, each holding 80% and 20% stake in it respectively.

He appraised the investors that company has already completed a brownfield expansion worth Rs 4 billion and the project is financed at a finance cost of around 2.5% for 10 years, while the majority of the expansion was completed at Rupee dollar parity of 200. He appraised the audience about the growth potential of a few of the emerging products company recently launched which includes Ferulin (Insulin) Sematide (semaglutide) and Noxane (Enoxaparin sodium).

Mr. Sebastian Martin Ferrarassi, Chairman of the Board of BF Biosciences shared with the investors that BF was the first investment of the Bago Group of Argentina outside Latin America. Mr. Ferrarassi shared the Group’s journey in partnership with Ferozsons, from their initial partnership in 2003 to commissioning BF Biosciences Limited, Pakistan’s first Biotech Plant in 2009.

The Group not only invested equity in the facility but also undertook valuable technology transfer and training of BF Staff in producing biotech products. Mr. Ferrarassi said that it is a proud moment for the company and expressed his confidence about the company’s growth prospects.

The floor price for the issue has been set at Rs 55 per share through a 100% book building process.

Initially, 18.8 million shares or 21.23% of the issue size would be allotted to the successful bidders, while 6.25 million shares or 7.07% of the issue would go to the retail investors.

The unsubscribed shares, if any, of the general subscription portion would be allocated to the successful bidders of the book building portion on a pro-rata basis.

The issuer will utilize any additional funds raised above the floor price in managing its additional requirements for capex and working capital needs.

BF Biosciences has estimated that the maximum strike price for the IPO may climb to Rs 77 per share that would increase the funds raised to Rs 1.93 billion.

Once fully subscribed, the IPO will bring down the respective shareholdings of Ferozsons Laboratories and Bago Group of Argentina to 57.36% and 14.34% in BF Biosciences.

Arif Habib Limited has been appointed as a lead manager and book runner to the issue.

The company, once raised, will primarily spend Rs 560 million of the funds on buying plant and machinery to expand its product range and improve efficiency.

It would use another Rs 141 million to acquire export certifications such as PIC/S and SRA and new product development including Glucagon-like Peptide (GLP1) while Rs 674 million have been allocated to finance the company’s working capital requirements for purchasing raw and packing materials to meet post-expansion working capital needs.

Mr. Shahid Habib, CEO Arif Habib Ltd said that BF Biosciences distinguishes itself by producing life-saving medications that are accessible to all and has propelled Pakistan into the exclusive league of exporters of biotech pharmaceuticals, especially during the Covid 19 pandemic.

BF Biosciences has a state-of-the-art biotech manufacturing plant located in Lahore that was designed and executed by Telstar Projects.

The plant produces biological medicines for cancer, chronic kidney disease and Hepatitis C and caters the local and international markets.

Currently, in this manufacturing facility the company has two manufacturing lines named “Line I” and “Line II”.

During COVID-19, BF Biosciences was one of Pakistan’s leading pharmaceutical exporters selling medicines to countries like Indonesia, Belarus, Ukraine etc.

Soon after the commencement of Line II operations, the company is targeting PIC/S certification after which it will be aggressively exploring export markets.

BFBL is actively pursuing new registrations and plans to initiate exports to non-PIC/S nations.

The company is targeting Central American countries, where regulatory requirements are less stringent and where its joint venture partner, Bagó has a strong equity.

Additionally, the BF Biosciences’ parent company, Ferozsons Laboratories, already has a strong presence in Far Eastern and Central Asian countries, which are the markets of their primary focus in the short and medium term.