10 CDMO Businesses Decoded
Most CDMO companies sound the same from the outside: capex, peptides, new customers, new molecules, big opportunity.The harder question is, which of those things actually matter?
Ishmohit and Sid have researched almost every major listed CDMO covered on this channel over the years. In this video, they step back from individual companies and pull all of that research into one framework.
At the centre of it is SCALE UP, a seven-part checklist for judging a CDMO business, followed by a six-tier mental model for understanding why businesses that can look almost identical from the outside may be completely different underneath.
Sid usually works behind the scenes on this research. In this video, he joins Ishmohit to unpack the CDMO framework they have built together over the years.
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Here's the short version.
1. Why Indian CDMOs account for only a small fraction of a roughly $171 billion global industry, and what China, policy uncertainty, AI and new capacity have to do with the shift toward India.
2. Why switching a manufacturing supplier can be far harder than it looks once regulatory filings are involved.
3. How a single molecule can change the trajectory of a CDMO business, including one example where the CDMO business went from roughly ₹40 crore to a targeted ₹1,000 crore, and why successful molecules can create a J-curve.
4. The complete SCALE UP framework: stickiness, chemistry, anchor clients, late-stage pipeline, capex economics, utilisation and price.
5. Why destocking, restocking and batch manufacturing create real lumpiness, and why judging these businesses quarter to quarter can be misleading.
6. Peptides from first principles, why GLP-1 changed the conversation around them, and why so much CDMO capacity is now being built around new modalities.
7. A six-tier framework for separating CDMO businesses that can look remarkably similar from the outside.
And one line captures a lot of what this business ultimately comes down to:
"He wants your soul in the game. Not skin in the game."
This is not a list of stock ideas. It is a framework for thinking about CDMO businesses before forming a view on any individual company.
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REFERENCED IN THIS VIDEO
CDMO Tier Financials Deck Presentation:
https://drive.google.com/file/d/1zm0yAIYWyXrqmT5ttmKREMBPbANKcTAQ/view?usp=drive_link
NCE and NBE primer:
https://drive.google.com/file/d/1ZYWkzoat1bgcbtYCIjWBNcaiy2uHl-at/view
ValuePickr thread on PI Industries:
https://forum.valuepickr.com/t/pi-industries-from-agchem-csm-giant-to-industrial-giant/223972
Update on PI Industries:
https://drive.google.com/file/d/11whogfEHUTXVYQ19fvKEMLdjBuYQE5kG/view?usp=drive_link
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CHAPTERS
0:00 Ishmohit and Sid set up the CDMO primer
1:54 How big the CDMO industry is, and where India sits
6:10 Why the sector is inflecting: China, policy and supply chains
13:23 AI, drug discovery and why capacity is being built now
22:23 SCALE UP: how to judge a CDMO business
28:11 What a peptide actually is, and why GLP-1 changed everything
36:30 Destocking, restocking and why the business gets lumpy
41:05 The six tiers explained
53:42 Tier 1: Executioners
1:05:30 Tier 2: Challengers
1:12:14 Tier 3: Wannabes
1:30:20 Tier 4: Hero or Zero
1:35:08 Tier 5: Little Babies
1:37:27 Tier 6: Copycats
1:43:33 Conclusion
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DISCLAIMER
This video is for educational and informational purposes only. Nothing in it constitutes investment advice, research or a recommendation to buy, sell or hold any security. Any stocks, sectors or themes mentioned are used only to illustrate investing frameworks and market history. Views expressed are personal, current as of the recording date and may change without notice. Investments in securities markets are subject to market risks. Please read all related documents carefully and consult a SEBI-registered investment adviser before making investment decisions. SOIC Intelligent Research LLP is registered with SEBI under the SEBI Research Analysts Regulations, 2014, with registration number INH000012582. #SOIC #CDMO #Pharma #Investing Receive SMS online on sms24.me
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