| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 40.90 | -42 |
| Intrinsic value (DCF) | 22.71 | -68 |
| Graham-Dodd Method | 13.80 | -80 |
| Graham Formula | 19.30 | -72 |
Bachem Holding AG (0QND.L) is a leading Swiss-based provider of peptide and oligonucleotide active pharmaceutical ingredients (APIs) for pharmaceutical and biotechnology companies worldwide. Founded in 1971 and headquartered in Bubendorf, Switzerland, Bachem specializes in the development, production, and regulatory support of high-purity peptides and oligonucleotides used in research, clinical development, and commercial applications. The company serves a global clientele with a comprehensive portfolio that includes peptide and oligonucleotide new chemical entities (NCEs), commercial NCEs, and generics. Bachem also offers value-added services such as project management, quality and regulatory support, analytical services, and GMP production. As a subsidiary of Ingro Finanz AG, Bachem operates in the highly specialized and growing pharmaceutical sector, catering to the increasing demand for peptide-based therapeutics in areas like oncology, diabetes, and cardiovascular diseases. With a strong focus on innovation and vertical integration, Bachem is well-positioned to capitalize on the expanding biopharmaceutical market.
Bachem Holding AG presents an attractive investment opportunity due to its strong position in the niche peptide and oligonucleotide API market, which is experiencing robust growth driven by advancements in biopharmaceuticals. The company's revenue of CHF 605.3 million and net income of CHF 120.2 million in the latest fiscal year reflect solid financial performance. Bachem's high-margin business model, supported by its expertise in complex peptide synthesis and regulatory compliance, provides a competitive edge. However, investors should consider the capital-intensive nature of the industry, as evidenced by significant capital expenditures (CHF -273.8 million). The company's low debt (CHF 290,000) and healthy operating cash flow (CHF 146.3 million) suggest financial stability. Risks include reliance on a specialized market segment and potential regulatory hurdles. The dividend yield, with a payout of CHF 0.85 per share, adds to its appeal for income-focused investors.
Bachem Holding AG holds a competitive advantage in the peptide and oligonucleotide API market due to its decades of expertise, vertical integration, and strong regulatory track record. The company's ability to produce high-purity peptides at scale positions it as a preferred partner for biopharmaceutical firms. Bachem's focus on innovation and custom synthesis allows it to cater to niche therapeutic areas, differentiating it from generic API manufacturers. Its Swiss-based operations ensure adherence to stringent quality standards, enhancing its reputation in regulated markets like the US and EU. However, the company faces competition from larger pharmaceutical suppliers with broader portfolios and greater financial resources. Bachem's specialization in peptides is both a strength and a limitation, as it relies heavily on this segment's growth. The company's investment in oligonucleotides (a growing field in mRNA therapeutics) provides diversification but requires continued R&D spending. Bachem's competitive positioning is further strengthened by its long-term client relationships and ability to support projects from research to commercialization. Yet, it must navigate pricing pressures and the potential for client insourcing of API production.