BF Biosciences Limited looks to raise 1.38 bn to 1.93 bn by issuing 28.3% new shares through an Initial Public Offering (IPO) on September 25-26. Speaking at the pre-IPO investor’s roadshow 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 the company has already completed a brownfield expansion, and the IPO will also help the company to manage the working capital needs of the expansion above.
Mr. Farhan Rafiq, COO of BF Biosciences, informed investors that Pakistan’s first biopharmaceutical manufacturer, BF Biosciences Limited, is a joint venture between Ferozsons Laboratories Ltd and Bago Group of Argentina, each holding an 80% and 20% stake in it, respectively.
He informed the investors that the company had already completed a brownfield expansion worth Rs 4 billion. The project is financed at a finance cost of around 2.5% for 10 years, while the majority of the expansion was completed at a rupee-dollar parity of 200. He appraised the audience about the growth potential of a few of the emerging products the company recently launched, which include 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 also 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 trained BF Staff in producing biotech products. Mr Ferrarassi said it was a proud moment for the company and expressed his confidence about its 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 retail investors. The unsubscribed shares 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 to manage its 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, which 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 lead manager and book runner for the issue.
Once raised, the company 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 develop new products, including Glucagon-like Peptide (GLP1). 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.
BF Biosciences, incorporated as an unlisted public limited company in 2006, imports, manufactures, markets, and distributes pharmaceutical products in Pakistan. The company started local manufacturing in 2009 through Line 1.
Mr. Shahid Habib, CEO of Arif Habib Ltd, said that BF Biosciences distinguishes itself by producing life-saving medications that are accessible to all. This 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 in Lahore that Telstar Projects designed and executed. The plant produces biological medicines for cancer, chronic kidney disease and Hepatitis C, catering to 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 such as Indonesia, Belarus, Ukraine, etc. Soon after commencing Line II operations, the company is targeting PIC/S certification, after which it will aggressively explore export markets. BFBL is 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, BF Biosciences’ parent company, Ferozsons Laboratories, already has a strong presence in Far Eastern and Central Asian countries, the markets of their primary focus in the short and medium term.
