Peptides manufacturers

Company Update: 
Both stocks have seen some profit taking in May and we think Bachem could be a good opportunity right now. The stock is trading below CHF70. We expect now a slower than anticipated first half as there will be no sales recorded in the new building K (new manufacturing facility) in the 1H, FY estimates are not impacted that much and we are optimist as the company should provide a detailed roadmap for 2028 and beyond, notably regarding the Sisslerfeld greenfield plant, at the CMD in November in Zurich.

We see room for near-term share price appreciation until CHF80, which appears to be a barrier for the company, and upgrades could come after the CMD in November.

Bachem could also benefit from an expected strong momentum for PolyPeptide. The management of Poly have been very vocal on 1H performance, both in terms of revenues and profitability, stating that the consensus was completely off: this has trigerred some model upgrades and the stock has re rated more than 20% (from CHF33 to CHF40).

Expert Opinion:
We like the call. In current environment we see peptide manufacturers as defensive picks with low downside risk. Both are good picks but Bachem seems less risky in the long term (historical operational efficiency) and multiples are more attractive. Strong demand is unchanged, with some customers (Elli Lily, NOvo ....) financing the expansion of capacity (e.g. Expansion in Malmö for PPGN worth c. €100m).

For daily updates, subscribe to our newsletter and for detailed information, reach out to us at sales@alphavalue.eu