Frankfurt The Mainz-based glass packaging manufacturer Schott Pharma expects a valuation of 3.7 to 4.3 billion euros for its initial public offering (IPO) planned for the end of September. As the company announced on Monday, shares will be offered in a price range of EUR 24.50 to EUR 28.50.
The papers come entirely from the ownership of the parent company Schott, which generates 849 to 987 million euros and remains the majority owner. Qatar Holding is subscribing to a package worth 200 million euros and acting as a so-called cornerstone investor that wants to acquire up to five percent of the shares. After the initial listing, which is scheduled for September 28th, up to 23 percent of the shares will be in free float.
Schott Pharma is expected to be one of the largest IPOs of the year in Germany. In addition to Schott Pharma, the tank gear manufacturer Renk has already announced its debut, and the mobility service provider DKV (fuel cards) is also in the starting blocks for an initial listing on the Frankfurt Stock Exchange. German sandal maker Birkenstock is preparing for a debut in New York.
The Schott subsidiary’s customers include Biontech and Moderna, which use the packaging for their Covid vaccines. Schott is increasingly focusing on high-quality products that can be sold for premium prices.
With Schott Pharma, a high-margin, high-growth specialty business is coming to the stock exchange. In 2021, the company grew by a good eleven percent and in 2022 by 26.5 percent to 821 million euros. The margin based on earnings before interest, taxes, depreciation and amortization (Ebitda) increased from 22.6 percent in 2020 to 26.8 percent last year. In the medium term, Schott Pharma wants to grow its sales by around ten percent per year; the goal for the Ebitda margin is a value in the “lower 30 percent range”.
>> Read here: Schott Pharma officially announces its IPO
The company produces pharmaceutical packaging made of glass and plastic (polymer). These are ampoules, bottles and cartridges for storing medication, as well as syringes. “We are focused on drugs that are administered via injection,” Andreas Reisse, the company’s CEO, told Handelsblatt. “We supply storage and administration solutions for these, which often have an additional function.”
The competition is manageable. According to industry analysts, Schott Pharma, Stevanato – an Italian company listed in the USA – and the US group Beckton Dickinson share around 60 percent of the market. Beckton Dickinson almost only competes with Schott when it comes to syringes; the company has a wide range of products for hospitals, for example.
The US company West Pharmaceutical Services is also involved, but is also a partner of Schott Pharma. The company supplies, among other things, the stoppers for the bottles.
Billion dollar syringe business
However, the syringe business is developing particularly well. More than half of the drugs approved by the US Food and Drug Administration last year require injection. On the one hand, less of the often expensive active ingredients are needed because they go directly into the bloodstream and do not have to pass through the gastrointestinal tract. On the other hand, there are fewer side effects and preparations work faster.
According to Schott Pharma, the market for these injectable drugs will outpace general pharmaceutical growth by 1.4 times. The global market volume is expected to increase from 426 billion euros last year to 579 billion euros in 2026. Even slightly higher growth is estimated for high-quality Schott packaging.
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The company has great hopes for the development of mRNA active ingredients. “Development is just beginning here. But Covid has shown that it works and happens quickly,” says CEO Reisse. The technology also has the advantage that it can be adapted quickly and individually. This opens up new possibilities for so-called “rare diseases”.
The challenge: The mRNA drugs have to be stored very cool. “The active ingredients are very sensitive and are frozen and then thawed again. “They are exposed to high pressures when transported on airplanes,” explains Reisse. These are extreme demands on the syringe systems.
Boom through diet supplements
In addition, so-called GLP-1 drugs are booming. Preparations that were actually developed for the treatment of diabetes but are now often administered as diet injections. ean has already concluded long-term contracts with the leading providers, says Schott boss Reisse, without naming specific names. The volume: around one billion euros by 2030.
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According to the Schott Pharma boss, portable solutions in which the patient injects the active ingredient themselves will be increasingly used in the weight loss market in the future. This complements a third trend, known in technical jargon as homecare. For example, the patient permanently wears a patch, a device into which the active ingredient is inserted and administered subcutaneously.
Schott Pharma supplies the so-called cartridges in which the active ingredient is stored. They can be inserted directly into the machine without any further preparatory work. This relieves the burden on the healthcare system, saves costs and can be easily combined with telemedicine, says Reisse.
At the same time, the production of medicines is changing. Different medications can be produced on one production line with short changeover times. Schott supplies pre-sterilized and ready-to-fill packaging solutions for this purpose.
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