BANB

CHF 66.45 4.9B market cap February 21, 2026

Bachem Holding AG BANB BUFFETT / MUNGER / KLARMAN SUMMARY

1 SNAPSHOT

PriceCHF 66.45

Market Cap4.9B

2 BUSINESS

Bachem is the world's #1 independent peptide API manufacturer, uniquely positioned for the GLP-1 obesity drug revolution and semaglutide generics wave. The company's 55-year track record, cGMP regulatory moat, and CHF 1B secured contract provide genuine competitive advantages. However, at CHF 66.45 (37x trailing P/E, negative FCF), the market already prices in successful execution of a massive capacity build-out while ignoring risks from Chinese competition, oral non-peptide GLP-1 alternatives, and the unresolved 52% founder estate stake. Wait for CHF 40-50 entry (Grogg estate-driven sell-off or capex-related earnings disappointment) to build a position with adequate margin of safety.

3 MOAT Narrow-to-Wide

#1 global peptide API manufacturer (17% share), 55yr synthesis expertise, cGMP regulatory switching costs (2-4yr/$5-15M per product), 900+ pipeline projects, CHF 1B 5yr supply contract, vertically integrated from amino acids to commercial API

4 MANAGEMENT

CEO: Anne-Kathrin Stoller

Bold but rational - CHF 1B+ capacity investment while maintaining zero LT debt, growing dividends through negative FCF, negligible buybacks. Aggressive growth capex (45% of revenue) is appropriate given secular GLP-1 tailwind but creates execution risk.

5 ECONOMICS

22% Op Margin

8% ROIC

8.6% ROE

36.9x P/E

-0.128B FCF

Net Cash Debt/EBITDA

6 VALUATION

FCF Yield-2.6%

DCF Range47 - 65

Overvalued by 2-40% depending on method

7 MUNGER INVERSION

Kill Event	Severity	P()	E[Loss]
Capacity overbuild risk - CHF 1B+ invested in facilities that may be underutilized if GLP-1 demand disappoints or non-peptide oral alternatives succeed	HIGH	-	-
Chinese CDMO competition (Hybio, Gansu Baishixing) entering generic peptide market as semaglutide patents expire 2026+	MED	-	-

8 KLARMAN LENS

Downside Case

Capacity overbuild risk - CHF 1B+ invested in facilities that may be underutilized if GLP-1 demand disappoints or non-peptide oral alternatives succeed

Why Market Right

Non-peptide oral GLP-1 alternatives (Pfizer danuglipron, Viking VK2735) reducing peptide API demand; Chinese CDMO capacity expansion commoditizing generic peptide manufacturing; Grogg estate forced selling creating supply overhang

Catalysts

Building K ramp-up to full commercial production (H2 2025-2026); Semaglutide patent expiry driving generic peptide API demand surge (2026-2027); Peter Grogg estate resolution could trigger takeover premium from Lonza/Thermo Fisher/Danaher; CHF 1B 5yr supply contract revenue ramp (2025-2029)

9 VERDICT WAIT

B+ Quality Strong - zero long-term debt, 72% equity ratio, net cash position despite massive capex cycle

Strong BuyCHF 40

BuyCHF 50

Fair ValueCHF 65

Strong Buy below CHF 40, Accumulate below CHF 50

🧠 ULTRATHINK Deep Philosophical Analysis

Bachem Holding AG - Ultrathink Analysis

The Core Question

Forget the GLP-1 hype for a moment. Strip away the semaglutide headlines, the obesity drug gold rush, the CHF 1 billion contract announcements. The real question about Bachem is simpler and harder: Is peptide API manufacturing a commodity or a craft?

If it is a commodity -- if anyone with enough capital can build a GMP-compliant facility, hire competent chemists, and produce semaglutide at scale -- then Bachem is building a CHF 1 billion fortress against an army that will simply outflank it. Chinese CDMOs will do what Chinese CDMOs always do: build capacity faster, hire cheaper, undercut on price, and gradually close the quality gap until the gap no longer matters. In that world, Bachem's current P/E of 37x is a monument to misplaced optimism.

But if peptide manufacturing is a craft -- if there are irreducible elements of accumulated knowledge, regulatory trust, and process expertise that cannot be quickly replicated -- then Bachem is one of the most strategically positioned companies in global healthcare. It would be the TSMC of peptides: the manufacturer everyone must use because the cost of failure (a contaminated drug, a failed FDA inspection, a delayed approval) is existential for the customer.

The truth, as is usually the case, lies somewhere in between. And where exactly it lies determines whether Bachem at CHF 66 is a fair price, a bargain, or a trap.

The Moat Meditation

What makes peptide manufacturing genuinely difficult? It is not the chemistry itself. Solid-phase peptide synthesis (SPPS) is well-understood. The Merrifield method has been textbook knowledge since the 1960s. Any competent organic chemistry lab can synthesize a peptide.

The difficulty lies in doing it at scale, under GMP conditions, with consistent quality, at 99.5%+ purity, in multi-hundred-kilogram batches, while maintaining regulatory compliance across FDA, EMA, PMDA, and Swissmedic simultaneously. Each step in that chain eliminates competitors. Many can do it at milligram scale. Fewer at gram scale. Fewer still at kilogram scale. And at the multi-hundred-kilogram commercial scale that semaglutide demands, perhaps five companies on Earth can reliably deliver.

This is the essence of Bachem's moat: it is not a technological monopoly (like ASML's EUV) but a capability monopoly. It took 55 years to build. It requires simultaneous excellence in chemistry, engineering, quality systems, regulatory affairs, and supply chain management. It is not protected by patents (which expire) but by accumulated expertise and institutional trust (which compound).

The parallel to semiconductors is instructive. Intel had the best process technology in the world for decades. Then it stumbled, and TSMC proved that capability monopolies are not permanent. The lesson: excellence must be maintained through continuous investment and execution. One generation of missteps can destroy decades of advantage.

Bachem's management understands this, which is why they are investing so aggressively. But aggressive investment carries its own risk: the curse of the cycle. Companies that invest at the peak of demand (when confidence is highest and capital is easiest to deploy) often find themselves with expensive, underutilized assets when the cycle turns. In cyclical industries, the best investments are made during troughs, not peaks. Is Bachem investing at the peak?

The Owner's Mindset

Would Buffett own this for 20 years? Let us be honest about what Buffett would say.

He would like: the market position (#1 globally), the regulatory moat (switching costs measured in years), the absence of long-term debt, the clean balance sheet, the dividend track record (23 years), the essential nature of the product (medicines that save lives), and the secular growth driver (obesity epidemic).

He would dislike: the 8.6% ROE (well below his 15% floor), the negative free cash flow, the 37x earnings multiple, the CEO change during a critical execution phase, the unresolved founder estate overhang, and the fact that the company's future depends heavily on one drug class (GLP-1) in one therapeutic area (obesity/diabetes). Buffett hates single-product dependency.

Munger would add: "The incentive structure is wrong. Management owns less than 1% of the company. The founder is dead and his 52% stake is in legal limbo. Who exactly is the steward of this business? The new CEO has been in the role for two months. That is not a business with clear owner-operator alignment -- it is a business in transition."

And Klarman would say: "Where is my margin of safety? The DCF says CHF 47 at a reasonable discount rate. The stock is at CHF 66. That is a -29% margin of safety -- in the wrong direction. I am being asked to pay for perfect execution of a CHF 1 billion capacity build-out, with a new CEO, during a period of ownership uncertainty, while Chinese competitors are entering the market. The expected return in the base case is single digits. Why would I take that risk?"

Risk Inversion

The ways this business could be destroyed, in order of probability:

1. The GLP-1 narrative breaks. Not because obesity drugs stop working -- they clearly work. But because the investment thesis assumes injectable peptide APIs remain the dominant delivery mechanism. If Pfizer's oral danuglipron, or Viking's oral VK2735, or some yet-unknown small molecule succeeds in Phase 3 with comparable efficacy, the demand for synthesized peptide APIs could plateau rather than explode. Bachem's new capacity would be half-empty. This is the single biggest long-term risk, and I estimate a 20-30% probability over the next five years.

2. Chinese commoditization. Hybio Pharmaceutical signed a commercial manufacturing agreement for semaglutide in August 2025. Gansu Baishixing is building peptide capacity. Chinese Peptide Company has been expanding. The semaglutide patent expires in India and China in 2026. If Chinese manufacturers achieve FDA/EMA approval for generic peptide APIs within 3-5 years (and they will try), the generic peptide business becomes a price war that Bachem, with Swiss cost structures, cannot win. The innovator drug business remains protected by switching costs, but generic was supposed to be the growth engine.

3. Execution failure. Building K is the most ambitious construction project in Bachem's history. The Vista expansion is concurrent. The Sisslerfeld greenfield is in concept design. Running three major construction projects simultaneously, with a new CEO, during a period of ownership uncertainty, is execution risk compounded by execution risk. If Building K comes online 12-18 months late or over budget, the CHF 1B contract timeline slips, and the stock could fall 30-40%.

4. Grogg estate overhang. This is the most immediate risk. A 52% block needs to go somewhere. If heirs sell gradually over 2-3 years, it creates persistent downward pressure. If they sell in bulk to a financial buyer at a discount, the stock gaps down. The optimistic scenario (strategic acquisition at a premium) is possible but less likely given the complexity of integrating a mid-cap specialty manufacturer.

Valuation Philosophy

At CHF 66.45, the market is saying: "We believe Bachem will successfully triple its revenue to CHF 1B+ by 2026, ramp Building K to full utilization, maintain 30%+ EBITDA margins, and navigate the generic peptide market successfully."

That is a lot of things to believe simultaneously. The market is not pricing in any of the risks articulated above. The P/E of 37x on trailing earnings, or 27x on optimistic 2026 estimates, assumes the bull case is the base case.

Value investing is the discipline of paying for what exists, not what might be. What exists today is: CHF 605M in revenue, CHF 120M in net income, CHF (128M) in free cash flow, CHF 1.1B of PP&E that is mostly under construction, and a corporate governance vacuum created by the founder's death.

What might be in 2027 is: CHF 1B+ in revenue, CHF 200M+ in net income, CHF 150M+ in free cash flow, and the world's dominant peptide manufacturing platform. If that vision materializes, the stock is worth CHF 80-100. If it partially materializes, the stock is fairly valued at current levels. If it fails, the stock is worth CHF 25-35.

The expected value calculation does not favor buying at CHF 66.

The Patient Investor's Path

The entry opportunity will come. It always does, especially for companies with this risk profile. The most likely triggers:

1. Grogg estate liquidation (6-18 months). Swiss estate proceedings typically take 12-24 months. When the block sale or distribution is announced, expect a 15-25% price drop on supply pressure. This is the most predictable catalyst for entry.

2. Capex overshoot / Building K delay (12-24 months). Construction projects of this scale routinely experience delays. A 2-3 quarter slip in Building K commissioning would cause the market to question the 2026 CHF 1B revenue target, sending the stock to CHF 45-55.

3. Broader biotech/healthcare correction. Bachem trades in sympathy with the GLP-1 narrative. If Novo Nordisk or Lilly disappoint on GLP-1 growth (trial failures, supply issues, pricing pressure), the entire peptide CDMO sector would sell off regardless of Bachem-specific fundamentals.

The target entry zone is CHF 40-50, which would represent:

22-28x trailing P/E (reasonable for a quality compounder)
15-19x normalized 2027E earnings
20-30% margin of safety to conservative intrinsic value

At CHF 40-50, the risk-reward profile shifts dramatically: expected returns exceed 15% annually, the margin of safety protects against downside scenarios, and you are being paid to accept the execution risk rather than paying a premium for it.

The hardest part of investing is doing nothing when a business you admire is priced above what it is worth. Bachem is an admirable business. But admiration is not a substitute for margin of safety. Wait.

Executive Summary

Investment Thesis (3 sentences)

Bachem is the world's largest independent peptide API manufacturer with 17% global market share, uniquely positioned at the nexus of the GLP-1/obesity drug revolution that represents the biggest pharmaceutical growth story in decades. The company is executing a CHF 1B+ multi-year capacity build-out (Building K, Vista expansion, Sisslerfeld greenfield) to capture the wave of semaglutide patent expirations and generic peptide demand, underpinned by a CHF 1B five-year supply contract. However, at 37x trailing earnings with negative free cash flow during peak capex, and a critical overhang from founder Peter Grogg's 52% estate stake following his death in June 2025, the stock offers insufficient margin of safety for a patient value investor.

Key Metrics Dashboard

Metric	Value	Assessment
Market Cap	CHF 4.88B	Mid-cap
Revenue (2024)	CHF 605.3M	+4.8% YoY
EBITDA	CHF 176.3M	29.1% margin
Net Income (2024)	CHF 120.3M	19.9% margin
ROE	8.6%	Fails Buffett 15% test (diluted by equity raise + capex)
EPS (2024)	CHF 1.60	+7.1% YoY
Free Cash Flow	CHF (127.5M)	Negative - peak investment cycle
Net Debt	~CHF (95M)	Net cash position
Debt/Equity	0.38x	Conservative
P/E (TTM)	36.9x	Premium valuation
P/B	3.58x	Premium to book
Dividend Yield	1.28%	CHF 0.85/share

Verdict

WAIT - Accumulate below CHF 50; Strong Buy below CHF 40. Quality business in a secular growth market, but current valuation offers no margin of safety during a period of execution risk and ownership uncertainty.

PHASE 0: OPPORTUNITY IDENTIFICATION (Klarman)

Why Does This Opportunity Exist?

The opportunity for patient investors exists for several converging reasons:

Founder's death creates overhang. Peter Grogg, who held ~52% of shares, passed away in June 2025. The fate of his estate stake (valued at ~CHF 2.1B) remains unresolved. Potential forced selling or block sale would depress shares.
Peak investment cycle obscures earning power. CapEx at 45% of revenue (CHF 292M in 2024, >CHF 400M guided for 2025) produces negative FCF, making the company look unprofitable to screening models.
GLP-1 hype cycle rotation. The initial excitement about GLP-1 suppliers has given way to questions about timeline, generic competition, and whether capacity being built will be fully utilized.
Complexity. Swiss-listed small/mid-cap CDMO in a niche subsector with limited analyst coverage (8 analysts). Most global investors cannot easily access SIX-listed stocks.

Assessment: The potential opportunity is real but not yet priced in sufficiently. At CHF 66.45, the market correctly values Bachem as a high-quality compounder but offers minimal margin of safety for the execution risks ahead.

PHASE 1: RISK ANALYSIS (Inversion)

1.1 How Could This Investment Lose 50%+ Permanently?

1.1.1 Capacity Overbuild Risk (Probability: 25%)

The Question: What if Bachem builds CHF 1B+ of capacity that ends up underutilized?

Analysis:

Bachem is tripling PP&E from CHF 340M (2020) to CHF 1,063M (2024), targeting >CHF 1.5B by 2027
The CHF 1B five-year supply contract provides some visibility, but represents only ~20% of cumulative revenue
Multiple competitors (PolyPeptide, CordenPharma, Hybio, Chinese entrants) are also expanding capacity
If GLP-1 demand disappoints or oral formulations replace injectables faster than expected, excess capacity would devastate margins and returns on capital

Expected Loss: P(Overbuild) x Impact = 25% x 40% = 10% expected value destruction

1.1.2 Technology Disruption - Oral GLP-1 (Probability: 30% over 5 years)

The Question: Could oral semaglutide or next-gen oral GLP-1 agonists reduce peptide API demand?

Analysis:

Novo Nordisk's oral semaglutide (Rybelsus) is already approved but requires higher doses (14mg vs 2.4mg injectable)
Oral peptides actually require MORE API per patient, not less - potentially bullish for Bachem
However, next-gen small molecule GLP-1 agonists (non-peptide) could bypass peptide synthesis entirely
Companies like Pfizer (danuglipron), Viking Therapeutics (VK2735 oral), and Structure Therapeutics are developing non-peptide oral alternatives
Timeline: 3-5 years before any non-peptide oral GLP-1 reaches commercial scale

Expected Loss: P(Disruption) x Impact = 30% x 25% = 7.5% expected value destruction

1.1.3 Chinese Competition Risk (Probability: 40%)

The Question: Can Chinese peptide CDMOs (Hybio, Chinese Peptide Company, Gansu Baishixing) undercut Bachem on price?

Analysis:

Semaglutide patents expire in India and China in 2026, opening generic market
Chinese manufacturers are aggressively building GMP peptide capacity
Quality gap exists today (FDA/EMA regulatory compliance favors Bachem) but is narrowing
Chinese CDMOs may capture 30-50% of generic peptide market within 5 years
Bachem's moat is strongest for innovator drugs (complex regulatory requirements) but weaker for generics

Expected Loss: P(Competition) x Impact = 40% x 20% = 8% expected value destruction

1.1.4 Founder Estate Forced Selling (Probability: 50%)

The Question: What happens to Peter Grogg's 52% stake?

Analysis:

Swiss estate law may require liquidation for inheritance tax purposes
A block sale of 52% of a CHF 4.9B company would likely require a discount
Potential acquirers (Lonza, DSM, Thermo Fisher, Danaher) might bid at a premium for control
Alternatively, estate could distribute shares to heirs who gradually sell
Uncertainty alone creates an overhang that depresses the stock

Impact on thesis: More of a timing/entry point issue than a permanent value destruction risk. Could create the entry opportunity we need.

1.2 Inversion Section

How could this investment lose 50%+ permanently? If oral non-peptide GLP-1 alternatives succeed (destroying the peptide API thesis), combined with Chinese competition commoditizing generic peptide manufacturing, and Bachem's CHF 1B+ in new capacity sits underutilized with 3-5% ROA on the invested capital.

What would make me sell immediately?

Cancellation or renegotiation of the CHF 1B supply contract
Fundamental shift to non-peptide oral GLP-1 proving successful in Phase 3
Bachem losing FDA/EMA GMP certifications
Board announcing a leveraged buyout using debt

If I were short this stock, what's my 3-sentence bear case? Bachem is spending CHF 1B+ building capacity for a GLP-1 generic wave that may never materialize if oral non-peptide alternatives succeed. The company is tripling its asset base at exactly the moment Chinese competitors are entering the market, guaranteeing margin compression. At 37x earnings with negative FCF and a founder estate overhang, the stock is priced for perfection in a business with significant execution risk.

PHASE 2: FINANCIAL ANALYSIS

2.1 Income Statement Trends (CHF M)

Metric	2020	2021	2022	2023	2024	5yr CAGR
Revenue	402.0	503.2	531.7	577.3	605.3	10.8%
Gross Profit	128.9	166.7	171.3	177.0	182.6	9.1%
Gross Margin	32.1%	33.1%	32.2%	30.7%	30.2%	Declining
EBITDA	119.5	154.2	160.5	166.7	176.3	10.2%
EBITDA Margin	29.7%	30.6%	30.2%	28.9%	29.1%	Stable
Net Income	78.1	114.7	100.7	111.9	120.3	11.4%
Net Margin	19.4%	22.8%	18.9%	19.4%	19.9%	Stable
EPS (CHF)	1.12	1.62	1.37	1.50	1.60	9.3%

Key observations:

Revenue growing at 10.8% CAGR - solid but not exceptional for a company trading at 37x earnings
Gross margins declining from 33% to 30% - partially due to scale-up inefficiencies from new capacity
Net margins stable at ~20% - healthy and consistent
EPS growth slower than revenue growth (9.3% vs 10.8%) due to share dilution (70M to 75M shares)

2.2 DuPont ROE Decomposition

Component	2020	2021	2022	2023	2024
Net Margin	19.4%	22.8%	18.9%	19.4%	19.9%
Asset Turnover	0.57x	0.39x	0.38x	0.34x	0.31x
Equity Multiplier	1.49x	1.16x	1.18x	1.27x	1.38x
ROE	16.4%	10.2%	8.6%	8.5%	8.6%

Critical insight: ROE has collapsed from 16.4% (2020) to 8.6% (2024), well below Buffett's 15% threshold. The culprit is asset turnover — Bachem has tripled its asset base (from CHF 711M to CHF 1,923M) while revenue has only grown 50%. This is the mathematical consequence of investing ahead of revenue: as Building K and Vista come online, ROE should normalize to 12-15% by 2027-2028.

2.3 Owner Earnings Calculation

Owner Earnings (2024):
Net Income:           CHF 120.3M
+ D&A:                CHF 39.0M
- Maintenance CapEx:  CHF (60.0M) estimated (20% of PP&E / 10yr useful life)
- Working Capital:    CHF (109.0M) estimated (inventory build)
= Owner Earnings:     CHF (9.7M)

Normalized Owner Earnings (post-capex cycle, 2027E):
Net Income:           CHF 200M (assuming CHF 1B revenue x 20% margin)
+ D&A:                CHF 75M
- Maintenance CapEx:  CHF (75M)
- Working Capital:    CHF (20M)
= Owner Earnings:     CHF 180M

2.4 Valuation Trinity

2.4.1 Liquidation Value (Floor)

Current Assets:       CHF 823M
- Total Liabilities:  CHF (532M)
= Net Current Asset Value (NCAV): CHF 291M
NCAV / Share:         CHF 3.88

Tangible Book Value:  CHF 1,391M - CHF 22M (intangibles) = CHF 1,369M
TBV / Share:          CHF 18.26

Graham Number = sqrt(22.5 x 1.60 x 18.55) = sqrt(665.7) = CHF 25.80

At CHF 66.45, the stock trades at:

17.1x NCAV (no liquidation protection)
3.64x tangible book value
2.57x Graham Number

2.4.2 DCF Valuation (Conservative)

Assumptions:

2026 revenue: CHF 1,000M (management target)
2027-2030 revenue CAGR: 8% (moderation from peak)
Terminal EBITDA margin: 30% (management target)
Maintenance CapEx: 8% of revenue (normalized post-build)
Tax rate: 12% (Swiss)
Discount rate: 9% (equity cost for mid-cap Swiss industrial)
Terminal growth: 3%

Year	Revenue	EBITDA	CapEx	FCF
2025E	680	190	400	(140)
2026E	1,000	310	200	130
2027E	1,080	324	90	210
2028E	1,166	350	95	230
2029E	1,260	378	100	250
2030E	1,360	408	110	270

Terminal Value (2030): CHF 270M / (9% - 3%) = CHF 4,500M PV of FCFs (2025-2030): ~CHF 550M PV of Terminal Value: ~CHF 2,840M Enterprise Value: CHF 3,390M Less: Net Debt (add net cash): CHF 95M Equity Value: CHF 3,485M Per Share: CHF 46.50

Sensitivity Table (Fair Value per Share):

Discount Rate \ Terminal Growth	2%	3%	4%
8%	CHF 52	CHF 60	CHF 72
9%	CHF 42	CHF 47	CHF 54
10%	CHF 35	CHF 39	CHF 44

2.4.3 Private Market Value

Recent comparable transactions:

Lonza (CDMO peer): Trades at 8-10x EV/Sales
CordenPharma (CDMO): Private, estimated at 4-6x EV/Sales
PolyPeptide Group: Trades at 5-7x EV/Sales

Bachem's 2026E revenue of CHF 1B at 6-8x EV/Sales = CHF 6,000-8,000M EV Less net debt: negligible Equity Value: CHF 6,000-8,000M Per Share: CHF 80-107

A strategic acquirer (Lonza, Thermo Fisher, Danaher, Samsung Biologics) would likely pay a control premium for the world's #1 peptide API manufacturer. This is a plausible upside scenario, especially given the founder estate uncertainty.

2.5 Margin of Safety Summary

Valuation Method	Value/Share	vs Current (CHF 66.45)	MOS
Graham Number	CHF 25.80	-61%	None (overvalued)
NCAV/Share	CHF 3.88	-94%	None
Liquidation (TBV)	CHF 18.26	-73%	None
DCF (Conservative, 9%)	CHF 47	-29%	None
DCF (Base, 8%)	CHF 60	-10%	None
Private Market Value	CHF 80-107	+20% to +61%	Moderate
Owner Earnings 10x (norm.)	CHF 24	-64%	None
Owner Earnings 15x (norm.)	CHF 36	-46%	None

Weighted Intrinsic Value Estimate: CHF 55-65

At CHF 66.45, the stock trades at or slightly above fair value with no margin of safety.

PHASE 3: MOAT ANALYSIS

3.1 Moat Sources

3.1.1 Regulatory Switching Costs (STRONG)

Peptide API manufacturing requires cGMP (current Good Manufacturing Practice) certification from FDA, EMA, PMDA, and Swissmedic. Each customer-API combination requires a Drug Master File (DMF) submission. Switching from Bachem to a competitor requires:

New DMF filing (12-18 months)
Regulatory re-approval (6-12 months)
Process validation at the new site (6-12 months)
Total switching time: 2-4 years
Cost: $5-15M per product

Measurement: Switching Cost / Annual Customer Value = Very High (>3x annual contract value)

3.1.2 Technical Know-How (MODERATE-STRONG)

55+ years of peptide synthesis expertise (founded 1971)
Proprietary SPPS (Solid-Phase Peptide Synthesis) processes
Quality-by-Design approach for complex 30-40+ amino acid peptides
Track record of FDA/EMA regulatory approvals spanning decades
900+ peptide projects in development pipeline

3.1.3 Scale Advantage (MODERATE)

#1 global peptide API manufacturer with 17% market share
Vertically integrated: amino acid derivatives (Vionnaz) through commercial API
Multi-site manufacturing network (Switzerland, USA, UK)
Building K and Sisslerfeld will create the world's largest peptide manufacturing complex
Scale enables investment in R&D and process optimization that smaller competitors cannot match

3.1.4 Customer Relationships (MODERATE)

Serves 7 of top 10 global pharma companies
Long-term relationships built over decades
Regulatory interdependency (DMF filings tie customers to Bachem)
CHF 1B five-year contract demonstrates customer commitment

3.2 Moat Durability Assessment

Threat	Severity (1-5)	Timeline	Mitigation
Chinese CDMO entry	4	3-5 years	Regulatory barriers, quality track record
Non-peptide oral GLP-1	3	5-10 years	Diversified pipeline beyond GLP-1
Customer concentration	3	Ongoing	Expanding customer base
Technology commoditization	2	10+ years	Continuous process innovation
Capacity overbuild industry-wide	4	2-4 years	Secured contracts provide visibility

3.3 Moat Trajectory: Stable to Widening

The moat is likely WIDER in 10 years because:

Building K and Sisslerfeld create the world's largest peptide capacity, reinforcing scale advantage
Every new DMF filed deepens regulatory switching costs
Peptide complexity is increasing (longer chains, cyclic structures), favoring expertise
GLP-1 generics wave beginning ~2026 creates enormous demand for qualified manufacturers

However, Chinese competition is the key risk that could narrow the moat for commodity peptides.

Moat Assessment: NARROW-TO-WIDE - Strong regulatory and technical moat for innovator drugs, narrower moat for generic peptides where Chinese competition is intensifying.

PHASE 4: MANAGEMENT & INCENTIVE ANALYSIS

4.1 Leadership Transition

Anne-Kathrin Stoller became CEO on January 1, 2026, replacing Thomas Meier
Previously Head of Bachem Americas — led Vista site expansion
Continuity appointment from within, not a strategic pivot
Kuno Sommer remains Chairman (since 2012) — provides stability

Concern: New CEO during the most critical phase of capacity build-out adds execution risk. However, internal promotion suggests strategic continuity.

4.2 Ownership Structure

Shareholder	Stake	Assessment
Peter Grogg Estate	~52%	CRITICAL UNCERTAINTY - founder passed June 2025
Free Float	~42%	Limited, constraining institutional ownership
Management	<1%	LOW skin in the game

Major concern: The Grogg estate's 52% stake is the single largest risk/opportunity factor. If heirs sell in bulk, the stock could decline 20-30% on supply pressure. If a strategic buyer emerges, it could trigger a premium takeover bid.

4.3 Capital Allocation Assessment

Use of FCF	2024	Assessment
CapEx	CHF 292M (48% of revenue)	Aggressive growth investment
Dividends	CHF 60M (50% payout ratio)	Maintained during negative FCF
Buybacks	CHF 1M	Negligible
Debt	Zero LT debt	Conservative

Assessment: Capital allocation is bold but rational. Bachem is investing massively in capacity to capture a secular growth wave, while maintaining a fortress balance sheet with zero long-term debt. The decision to maintain and grow dividends during negative FCF years signals management confidence in future cash generation.

PHASE 5: CATALYST ANALYSIS (Klarman)

Catalyst	Trigger	Timeline	Probability	Impact
Building K ramp-up	Full commercial production	H2 2025-2026	80%	Revenue acceleration toward CHF 1B target
Semaglutide patent expiry	Generic API demand surge	2026-2027	90%	CHF 200M+ incremental revenue potential
Grogg estate resolution	Sale/distribution of 52% stake	2026-2027	70%	Could create entry point OR takeover premium
CHF 1B contract execution	Revenue recognition ramp	2025-2029	85%	Provides 5-year revenue visibility
Sisslerfeld greenfield	Concept design to construction	2025-2030	60%	Next phase of capacity expansion

Catalyst Assessment: Strong catalysts exist (GLP-1 generics, Building K, secured contracts), but they are 12-24 months out and largely priced in at 37x earnings. The most interesting catalyst for value investors is the Grogg estate resolution, which could create a temporary price dislocation.

PHASE 6: DECISION SYNTHESIS

Megatrend Resilience Screen

Megatrend	Score	Notes
China Tech Superiority	-1	Chinese peptide CDMOs are emerging competitors
Europe Degrowth	0	Swiss HQ, global revenue, energy costs manageable
American Protectionism	+1	Vista site provides US manufacturing capability
AI/Automation	+1	AI can optimize peptide synthesis processes
Demographics/Aging	+2	Aging population = more chronic disease = more peptide drugs
Fiscal Crisis	0	Healthcare spending is relatively resilient
Energy Transition	0	Neutral impact

Total: +3 | Tier 2 "Resilient"

Expected Return Scenario Analysis

Scenario	Probability	3yr Price	Return	Weighted
Bull (CHF 1B revenue, 30% EBITDA, 30x P/E)	25%	CHF 120	+81%	+20%
Base (CHF 800M revenue, 28% EBITDA, 25x P/E)	40%	CHF 75	+13%	+5%
Bear (capacity underutilized, 22% EBITDA, 18x P/E)	25%	CHF 40	-40%	-10%
Disaster (technology disruption, margin collapse)	10%	CHF 20	-70%	-7%
Expected	100%			+8%

Expected 3-year return of ~8% is insufficient for the risk profile. A value investor needs 15%+ expected return with a margin of safety.

Entry Prices

Intrinsic Value (weighted): CHF 55-65
Strong Buy (30% MOS):       CHF 40
Accumulate (20% MOS):       CHF 50
Fair Value:                  CHF 60
Take Profits:               CHF 78
Sell:                        CHF 95

Sell Triggers (Pre-Defined)

Thesis Break: Non-peptide oral GLP-1 succeeds in Phase 3 with comparable efficacy
Moat Erosion: Chinese CDMO gains FDA approval for semaglutide generic API
Management Failure: CHF 1B contract cancelled or materially restructured
Valuation: Price exceeds CHF 95 (>50% above intrinsic value)

Monitoring Metrics

Metric	Current	Threshold	Action if Breached
Revenue Growth	+4.8%	<0% for 2 consecutive quarters	Review thesis
EBITDA Margin	29.1%	<25%	Margin pressure = reduce conviction
Building K utilization	Commissioning	<50% after 12 months	Overcapacity signal
Grogg estate	Unresolved	Block sale announced	Potential entry opportunity
Chinese CDMO FDA approvals	None	First approval	Narrow moat risk

INVESTMENT RECOMMENDATION

+-------------------------------------------------------------+
|                  INVESTMENT RECOMMENDATION                    |
+-------------------------------------------------------------+
| Company: Bachem Holding AG        Ticker: BANB               |
| Current Price: CHF 66.45         Date: Feb 21, 2026          |
+-------------------------------------------------------------+
| VALUATION SUMMARY                                             |
| +-------------------------+-----------+---------------------+ |
| | Method                  | Value/Shr | vs Current Price    | |
| +-------------------------+-----------+---------------------+ |
| | Graham Number           | CHF 25.80 | -61% (overvalued)   | |
| | Net Current Asset Value | CHF 3.88  | -94% (overvalued)   | |
| | Liquidation Value (TBV) | CHF 18.26 | -73% (overvalued)   | |
| | DCF (Conservative)      | CHF 47    | -29% (overvalued)   | |
| | DCF (Base Case)         | CHF 60    | -10% (overvalued)   | |
| | Private Market Value    | CHF 80-107| +20% to +61%        | |
| | Owner Earnings 15x      | CHF 36    | -46% (overvalued)   | |
| +-------------------------+-----------+---------------------+ |
|                                                               |
| INTRINSIC VALUE ESTIMATE: CHF 55-65 (weighted)               |
| MARGIN OF SAFETY: 0% (trading at/above fair value)            |
+-------------------------------------------------------------+
| RECOMMENDATION:  [ ] BUY  [ ] HOLD  [ ] SELL  [X] WAIT       |
+-------------------------------------------------------------+
| STRONG BUY PRICE:     CHF 40 (30% below IV)                  |
| ACCUMULATE PRICE:     CHF 50 (20% below IV)                  |
| FAIR VALUE:           CHF 60                                  |
| TAKE PROFITS:         CHF 78                                  |
| SELL PRICE:           CHF 95                                  |
+-------------------------------------------------------------+
| POSITION SIZE: 2-3% of portfolio (if entry price achieved)    |
| CATALYST: GLP-1 generics wave + Grogg estate resolution       |
| PRIMARY RISK: Capacity overbuild + Chinese competition         |
| SELL TRIGGER: Non-peptide oral GLP-1 Phase 3 success           |
+-------------------------------------------------------------+

SOURCES USED & DATA EXTRACTED

Primary Sources

Document	Source	Key Data Extracted
FY 2024 Results	Bachem press release	Revenue, EBITDA, margins, CapEx, dividend, segments
FY 2023 Annual Report	Bachem IR (PDF link)	Historical financials, strategy, risk factors
FY 2022 Annual Report	Bachem IR (PDF link)	Historical financials

Financial Data Sources

Source	URL	Data Extracted
StockAnalysis.com (S&P Global)	stockanalysis.com/quote/swx/BANB	Income statement, balance sheet, cash flow (2020-2024)
MarketScreener	marketscreener.com	Valuation multiples, analyst consensus, balance sheet
Investing.com	investing.com/equities/bachem-holding-ag	Current price, 52-week range, analyst targets
CompaniesMarketCap	companiesmarketcap.com/bachem	Historical revenue data

Industry Research

Source	Key Data
Bachem Blog (Scaling Up)	Capacity expansion details: Building K, Vista, Sisslerfeld
InsightAce Analytic	GLP-1 CDMO market sizing and growth projections
Global Growth Insights	Top 17 Peptide CDMO companies ranking
C&EN (ACS)	Semaglutide patent expiry analysis, manufacturing chemistry

API Data Limitations

AlphaVantage: Does not cover BANB (Swiss SIX exchange)
EODHD: 401 Unauthorized for BANB.SW - not in coverage universe
All financial data sourced from web-based databases and cross-referenced