Bachem

Company Update:
Bachem unveiled plans to build a large-scale production facility in Sisslerfeld with total investments amounting to CHF500m.

The company had already bought the land (15ha) to focus on large-scale peptide manufacturing. This facility is the first large project announced on site.

The CHF500m investment commitment was announced after the signature of a strategic collaboration with a key client, with scheduled manufacturing starting 2030. Notably, it includes pre-payments.

After strong metabolics earnings from PolyPeptide yesterday, this is further evidence that demand for peptide APIs is strong. Clients are already starting to book supply starting in 2030, including paying ahead of manufacturing delivery.

Pre-payments have been a key financing mechanism, allowing peptide manufacturers to invest higher amounts than what they would be able to do on their own, with limited impact on their leverage.

Expert Opinion:
CHF500m capex is massive for Bachem but is financed by clients. We believe this comes from one of Bachem's clients involved in GLP1, demonstrating the massive confidence that the GLP-1 market will keep growing massively over the foreseeable future. Positive X read for Novo (Conviction buy for us) and Eli Lilly. 


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