IPO-bound Anthem Bio says cost arbitrage drove expansion, proposing China alternative for global pharma

Bengaluru, July 10, 2025 — As it prepares for its much-anticipated initial public offering (IPO), Anthem Biosciences, a contract development and manufacturing organization (CDMO), is positioning itself as a cost-efficient alternative to China in the global pharmaceutical supply chain. In recent investor presentations, the Bengaluru-based company emphasized how India’s skilled talent pool and lower operating costs have helped fuel its rapid growth while catering to big pharma clients across the globe.

Cost Arbitrage: Key to Anthem's Growth Story

Anthem Bio's rapid expansion in recent years has been underpinned by its strategic use of cost arbitrage — capitalizing on India’s lower costs of labor, real estate, utilities, and regulatory compliance compared to China and Western nations. The firm claims this advantage has not only ensured strong operating margins but also helped it become a go-to CDMO partner for biotech and pharmaceutical companies seeking scalable yet affordable manufacturing solutions.

"Over the last five years, we have delivered consistent topline growth, supported by a robust margin profile, thanks to a highly efficient cost base," said an Anthem Bio spokesperson. "As global pharma reassesses its dependence on China, we are offering a reliable and transparent alternative."

The China+1 Strategy: Anthem’s Strategic Opportunity

As geopolitical tensions and supply chain vulnerabilities mount, the “China+1” strategy has gained traction across the global pharmaceutical and life sciences ecosystem. This strategy encourages diversification beyond China — and India is emerging as the top beneficiary.

Anthem Bio is leveraging this shift by expanding its footprint aggressively. The company recently added a 1.3 million sq ft facility in Bangalore and is scaling its R&D capabilities to accommodate early-stage biologics and small molecule development.

“India is fast becoming a critical hub for pharma outsourcing. Anthem Bio’s value proposition lies in its blend of cost advantage, regulatory alignment, and skilled workforce — all essential elements for global pharma majors looking to de-risk their supply chains,” said Prakash Mehta, pharma analyst at Axis Securities.

Financials Ahead of IPO: Solid Growth Trajectory

According to its draft red herring prospectus (DRHP) filed with SEBI, Anthem Bio clocked ₹1,490 crore in revenue in FY24, up from ₹1,000 crore in FY22. Its net profit stood at ₹245 crore in FY24, showcasing a CAGR of nearly 30% over the past three fiscal years.

The company’s EBITDA margin stood at 31.2% in FY24, underlining strong operational efficiencies. The IPO proceeds are expected to fund further capacity expansion, repay debt, and enhance R&D infrastructure.

Analyst Perspective: Market-Ready But Competitive Landscape Looms

Market analysts are bullish on the company’s IPO prospects but caution that competition from both domestic and international players could pressure future growth.

“Anthem Bio has shown impressive financial discipline and capitalized well on macro trends,” said Sneha Varma, Senior Analyst at ICICI Direct. “However, the CDMO space is heating up with Indian players like Syngene, Laurus Labs, and Divi’s already commanding strong positions. Anthem will need to keep innovating to stay competitive.”

Anthem's management acknowledges this and is focused on investing in high-value segments, including biologics and cell/gene therapy research. The company also aims to increase its presence in regulated markets, particularly the US and EU, where compliance and quality standards are key differentiators.

Global Pharma Partnerships

Anthem currently serves over 200 clients worldwide, including top-tier pharma and biotech firms. Its long-term relationships and project-based collaborations have allowed it to climb up the value chain — from simple formulation support to end-to-end clinical and commercial manufacturing services.

“We’ve built trust through consistent delivery and high compliance standards,” said the company’s Chief Operating Officer. “Now, we’re exploring joint ventures and strategic alliances to further penetrate regulated markets.”

Investor Outlook: High Hopes Backed by Strong Fundamentals

Market buzz surrounding Anthem Bio’s IPO is building steadily, with early estimates valuing the company between ₹12,000–₹14,000 crore. Investor interest is driven by the company's strong financials, scalable business model, and alignment with long-term global pharma outsourcing trends.

"Investors should consider Anthem as a promising long-term bet in India’s growing CDMO market," said Rajesh Shah, a Mumbai-based investment advisor. "Its IPO could also serve as a bellwether for future biotech listings in India."

The IPO is expected to open in Q3 FY26, subject to regulatory approvals, and may include a combination of fresh issuance and an offer for sale (OFS) by existing shareholders.

Anthem Bio’s Moment of Opportunity

Anthem Biosciences is entering the public markets at a time of profound global transformation in pharma manufacturing. With a strong cost base, diversified client portfolio, and a keen focus on scaling up R&D and manufacturing capacities, the company is poised to take full advantage of the China+1 momentum.

However, the road ahead will require continued execution excellence and strategic agility to navigate increasing competition and regulatory scrutiny. If it succeeds, Anthem Bio could well emerge as one of India’s premier biotech success stories in the coming decade.