BF Biosciences Limited (hereafter referred to as “BFBIO” or “the Company”) was incorporated on February 24, 2006, as an unlisted public limited company under the Companies Ordinance 1984 (now Companies Act, 2017). The Company is a joint venture between Ferozsons Laboratories Limited and the Bagó Group of Argentina. In October 2024, the Company was listed on the Pakistan Stock Exchange (PSX). The registered office of the Company is located at 197-A, The Mall, Rawalpindi.

In 2006, BFBIO was established following the signing of an agreement between Ferozsons Laboratories Limited, Pakistan (“the Parent Company”), and the Bagó Group of Argentina to establish a “Biotech Pharmaceutical Plant”. The plant was completed, and the Company began operations on July 1, 2009, to manufacture biological medicines for the treatment of Cancer and Hepatitis C for local and export markets. In 2020, BFBIO executed a non-exclusive license agreement with Gilead Sciences, Inc. for the manufacture and sale of Remdesivir, an antiviral drug used in the treatment of COVID-19 patients, under Gilead’s Global Patient Solutions (GPS) Program. This program aimed to improve access to medications for patients worldwide, particularly in developing countries. Agreements were executed with five South Asian manufacturers, and BFBIO was the only company from Pakistan licensed to manufacture Remdesivir for distribution in up to 127 countries. In recognition of its efforts, BFBIO was awarded the PESA Award in 2021 for the export of Remdesivir. Management decided that all the net cash flows generated from the Remdesivir would be invested to increase BFBIO’s production capacity through a brownfield expansion (“Line II”), capable of producing biological and non-biological products. In FY 2020-21, the financial close of state-of-the-art “Line II” expansion comprising a high-speed pre-filled syringes line, 42 square meter lyophilizer, a combi filling line, and other ancillary accessories was achieved. In Oct-24, the Company raised funds by issuing a total of 25 million ordinary shares through an initial public offering (IPO) to meet post-expansion working capital needs, CAPEX to enhance process efficiencies, obtain export certifications (PIC/S & SRA), and new product development, including Glucagon-like Peptide (GLP1).

BFBIO is primarily engaged in the manufacturing and sales of biological and non-biological medicines, including the treatment of Cancer and Hepatitis C for the local and export markets as well. It has a state-of-the-art manufacturing facility in Sundar Raiwind Road, Lahore, and it is also the most advanced Biopharmaceutical plant of Pakistan. The facility is designed as per the USFDA & EMEA Standards, which are ISO 9001, 45000, and 14001 certified and fully equipped with state-of-the-art manufacturing and testing equipment. It was the first USFDA-compliant pharmaceutical facility in the country. They have also helped Pakistan join the select group of companies that are exporting biotech pharmaceuticals. It produces specialized injectables in vials and prefilled syringes and has currently completed its major capacity expansion (Line-II) in 2024. This expansion was financed through debt (~70%) and internal cash flows (~30%). Notably, a majority of this debt was a subsidized loan obtained under the TERF scheme. During 9MFY26, the company’s production volume has continued to scale following the ramp-up of Line-II. During 1HFY26, total output reached ~3.4 million units, compared to ~3.0 million units produced in all of FY25, as detailed in the table below. This growth in manufacturing output reflects the successful scaling of operations and the immediate utilization of the newly added facility capacity.

Ferozsons Laboratories Limited, the parent company, owned the majority stake of ~80%, and the Bago Group owned a stake of ~20% in FY24. Post-IPO, the parent company, Ferozsons, now holds a stake of ~57.36%, and the Bago group owns ~14.34% of shares in the Company. The remaining share is held by the general public.

The ownership structure of the Company is considered stable, as it has remained under the control of the current sponsors since incorporation, with no changes expected in the foreseeable future.

With over six decades of active engagement in the pharmaceutical sector, the parent company and its sponsoring family have consistently demonstrated strong business acumen. Their core strengths include establishing strategic international partnerships (i.e., Argentine Bagó Group and Gilead Sciences) and developing strategic alliances with leading organizations in the global healthcare industry. The Bagó Group, established in 1934 and recognized as Argentina’s premier pharmaceutical group, further exemplifies this acumen. This influential group comprises diverse companies focused on human health, animal health, and pharmaceutical distribution, driven by continuous therapeutic innovation and consistent investment in R&D. Notably, within the first two years of their partnership, they achieved a position among the top three companies in both the oncology and hepatology segments. The enduring commitment to excellence of both Ferozsons and Bagó has enabled the Company to effectively navigate the complexities of the pharmaceutical landscape, fostering sustained growth and continuous innovation.

The Ferozsons Group demonstrates financial strength through its strategic investments in BF Biosciences Limited (a subsidiary) and Farmacia (a partnership). With a group size of PKR 18.9bln as of Jun-25, the Company is well-positioned within the industry, and its prospects are considered strong. Further strengthening its financial standing is its strategic alliance with the Bagó Group, with an extensive portfolio reaching over 47 countries across Latin America, Europe, Asia, Oceania, and Africa, with a direct presence in 22 countries and the remaining markets served through exports. This global reach ensures a diverse range of cutting-edge products, further strengthening the Company’s financial outlook.

The board comprises seven members: four non-executive directors (including the chairman), two independent directors, and one executive director. This diverse composition ensures compliance with the corporate governance code. Mr. Naveed Kamran Baloch tendered his resignation from the Board with effect from March 3, 2026, creating a casual vacancy. The resulting position on the Board, Audit Committee, and HR & Remuneration Committee will be filled in due course in accordance with applicable regulations.

All members of the Board of Directors (BoD) are seasoned professionals with extensive industry experience and long-standing affiliations with the company. The Chairman, Mr. Sebastian Martin Ferrarassi (Non-executive director), possesses over 30 years of enriched experience relating to the pharma industry, which enables him to contribute effectively to the board’s decision-making process. The Board also includes independent director S M Wajeeh Uddin, who brings over three decades of experience across various sectors, including multinational healthcare and pharmaceutical companies. Mr. Naveed Kamran Baloch, previously serving as an independent director, resigned with effect from March 3, 2026. Among the non-executive directors, Mr. Osman Khalid Waheed, Mrs. Amna Piracha Khan, and Mrs. Munize Azhar Paracha further strengthen the Board with their diverse professional backgrounds and extensive expertise.

The board of BFBIO has established two key committees: the Audit Committee and the HR & Remuneration Committee. Each of these is chaired by an independent director, ensuring impartial oversight and robust governance. During the year, multiple board meetings were held. Attendance of board members in these meetings remained strong, and minutes are documented adequately.

M/S KPMG Taseer Hadi & Co. Chartered Accountants, which are among the Big-4 and classified in category ‘A’ by SBP with satisfactory QCR rating, are the external auditors of the Company. The firm has expressed an unqualified opinion on the financial statements for the year ended June, 2025.

The Company has a clearly defined organizational structure, comprising functional and administrative departments, each with a multilayered hierarchy, and is led by a qualified department head. Each department head reports directly to the CEO. At present, all key positions within the organization are fully staffed.

The management team is composed of highly qualified professionals who bring extensive skills and have long-standing associations with the Company. Mr. Farhan Rafiq, the Chief Executive Officer (CEO), is a Chartered Accountant with over 20 years of experience in the pharmaceutical industry. Mr. Abdur Rehman, the Chief Financial Officer (CFO), is also a Chartered Accountant, contributing over 15 years of relevant expertise and a diverse skill set. This leadership is further assisted by a team of experienced professionals, ensuring good governance and strategic direction.

The Company has established clear reporting lines, further enhanced by the presence of a management committee which includes all chiefs and directors of all departments. Meetings are convened as needed to discuss key operational and strategic matters. Noteworthily, performance reports are prepared and submitted to all department heads on a monthly basis.

BFBIO has implemented SAP S/4 HANA through Systems Limited, ensuring compliance with global standards for enterprise management systems. It provides a real-time, end-to-end integrated solution for operations across finance, sales & marketing, production, procurement, quality management, and human capital management.

A detailed Management Information System (MIS), featuring key performance indicators, is submitted to the CEO/CFO on a monthly basis, including an income statement, segment-wise and region-wise breakdowns of revenue and profit, efficiency variance reports, as well as receivables, payables, and inventory aging reports, and an operational expenditure summary. The current control environment includes a formally constituted independent internal audit function. This strengthens the third-party assurance on internal controls, process adherence, and risk management adequacy.

Pakistan’s pharmaceutical industry has demonstrated sustained structural expansion, with the total market reaching PKR 1,182.6 billion on a MAT basis as of January 2026, reflecting growth of 15.2% and a 5-year MAT CAGR of 17.2%. This consistent double-digit trajectory highlights the sector’s defensive, non-cyclical nature, underpinned by inelastic healthcare demand and rising disease prevalence, making it relatively resilient versus broader macroeconomic volatility. The market remains predominantly a branded-generic structure, comprising over 700 registered manufacturers and more than 70,000 approved formulations. Industry participants are broadly categorized into multinational companies (MNCs), large domestic manufacturers, and a long tail of small-scale generic producers. MNCs account for approximately 25–30% of the market by value, while domestic players dominate volume, reflecting Pakistan’s strong affordability-driven consumption pattern across both public and private healthcare channels. Structurally, the industry is highly competitive and fragmented. Key competitive dynamics include: (i) brand equity and physician engagement through medical detailing in prescription-driven therapies, (ii) persistent pricing pressure from unregistered or substandard products reflecting regulatory enforcement gaps, which industry bodies such as the PPMA continue to advocate against, (iii) reliance on a fragmented wholesale and retail pharmacy distribution network that intensifies price competition, and (iv) increasing contestation in institutional procurement channels, where both domestic manufacturers and importers compete for government and tender-based demand.

Demand-side growth is being structurally reinforced by an increasing disease burden, particularly the rise of non-communicable diseases (NCDs). Pakistan faces a significant metabolic health challenge, with diabetes prevalence estimated at ~33% among adults and a high incidence of overweight and obesity (57% among women and 41% among men per WHO estimates). These epidemiological trends are creating sustained, long-duration demand for anti-diabetic, cardiovascular, and obesity-related therapeutics. Globally, this trend is most visible in the rapid expansion of GLP-1 receptor agonists such as semaglutide and tirzepatide, with the global GLP-1 market projected to exceed USD 100 billion by 2030, underscoring the shift toward high-value metabolic therapies. Oncology and pre-cancer related therapies also represent an increasingly important growth segment. Pakistan continues to witness a rising incidence of cancer cases, driven by population growth, aging demographics, lifestyle risk factors, tobacco consumption, and delayed diagnosis rates. In parallel, greater clinical focus on early screening and pre-cancer conditions is gradually expanding demand for preventive and early-stage interventions. This is supporting higher utilization of chemotherapy agents, targeted therapies, supportive care medicines, and specialty injectables. Given the relatively high cost and technical complexity of oncology treatment, domestic manufacturing and biosimilar development present meaningful import substitution opportunities over the medium term.

Other high-burden therapeutic areas, including nephrology, hepatitis, and infectious diseases, continue to drive demand for specialty pharmaceuticals, particularly injectables and biologics. However, access remains structurally constrained by affordability and system-level limitations, including low insurance penetration and a predominantly out-of-pocket healthcare financing model. From a structural demand perspective, Pakistan’s population of ~240 million, with a median age below 23 years, provides a long-term demographic tailwind supporting volume growth. However, per capita pharmaceutical expenditure remains low at approximately USD 12–14 per annum, indicating significant latent demand that is currently suppressed by income constraints and access barriers.

Against this backdrop, the biopharmaceutical and injectable segment represent a structurally distinct and higher-barrier sub-market within the broader industry. Unlike oral solid dosage (OSD) formulations, biologics and complex injectables require advanced manufacturing capabilities such as aseptic processing, lyophilization, and large-volume parenteral production. These technological and regulatory barriers significantly raise entry thresholds and limit the competitive set.

Historically, Pakistan has been heavily dependent on imports for biologics and specialty injectables, with only a limited number of domestic players developing meaningful capabilities in this space. As a result, the growth of the biotech injectable segment is being driven by: (i) import substitution as local manufacturing gradually replaces high-cost imported therapies, (ii) increasing institutional procurement through public sector tenders and Essential Medicines List (EML) inclusion, particularly in oncology, nephrology, and infectious disease categories, (iii) gradual expansion of hospital formularies incorporating biosimilars and specialty injectables, and (iv) selective export opportunities in comparable emerging markets.

Within this context, BF Biosciences operates in a structurally high-growth but technically complex segment of the pharmaceutical value chain, where long-term growth is anchored not only in demand expansion but also in manufacturing capability depth and regulatory alignment with institutional healthcare procurement systems.

On a consolidated basis, the Ferozsons Group (including BFBIO) holds an estimated market position of No. 21 in Pakistan’s pharmaceutical industry, with aggregate reported sales of ~PKR 19 billion and a combined market share of approximately 1.7%. The Company’s portfolio covers chronic and specialty care therapeutic areas including diabetes/Anti-obesity, hepatology, Anti-fungal/Oncology, and cardiology. These segments exhibit relatively stable prescription demand. Within its portfolio, BFBIO holds leading positions in select niche molecules, particularly in hepatology and oncology-related injectables.

During 9MFY26, the Company reported a topline of ~PKR 7,236mln, reflecting growth of ~71.7% over 9MFY25 (PKR 4,214mln). The growth is primarily volume-led, supported by continued capacity utilization gains following the commercialization of Line-II, alongside incremental contributions from new product introductions and increased penetration of existing brands. In-market generic sales grew by ~61% YoY, while institutional sales expanded by ~141%, reflecting broad-based demand traction across both channels. The revenue trajectory is consistent with the capacity ramp-up and field force investment undertaken since FY24, though sustaining this rate of growth will become progressively more challenging as base effects accumulate.

The revenue mix remains moderately diversified, with biological products contributing ~60% of sales, while non-biological products account for the remaining ~40%, providing a balance between volume-driven and relatively higher-value segments. Geographically, the sales mix remains largely domestic (~98.5%), with exports contributing a modest ~1.5% of net revenues (~PKR 109mln) as of 9MFY26, reflecting continued reliance on local demand dynamics. The Company’s export reached nine markets in 1HFY26 but remains nascent. The closure of the Afghanistan border has been flagged as a near-term constraint on export expansion, limiting near-term diversification of the revenue base.

Profitability indicators showed recovery in gross margins during 9MFY26. Gross margins improved to ~44.1% in 9MFY26 (9MFY25: ~41.2%; FY25: 39.2%), reflecting better overhead absorption as production volumes scaled through Line II utilization and a favorable product mix shift toward higher-value biological products. At the operating level, margins moderated to ~12.7% (FY25: 13.4%), as selling and distribution expenses rose ~97% year-on-year, driven by ongoing field force expansion and marketing support for new product launches. Administrative expenses also increased by ~PKR 97mln over the nine-month period. Net profit margin moderated to ~6.4% (FY25: 7.7%), with the effective tax rate rising to ~43.3% (FY25: 38.2%). 

BFBIO’s long-term operating sustainability is anchored in its biopharmaceutical manufacturing platform, which provides a differentiated production capability relative to conventional oral solid dosage manufacturers. The Company maintains a defined product development pipeline, including GLP-1/GIP-based molecules (Zeptide®, tirzepatide and Sematide®, semaglutide), targeting the structurally high-demand diabetes and anti-obesity segment. The IPO proceeds continue to fund the Company’s investment plan, with a remaining balance of ~PKR 282mln as of March 2026. Geographic diversification of revenue remains limited, increasing vulnerability to domestic market dynamics. The Company’s medium-term growth strategy is partially dependent on obtaining SRA certifications to access regulated export markets. This process involves significant time, regulatory engagement, and capital. Delays or failures in certification would defer export revenue and limit the return on the biopharmaceutical manufacturing platform. Continued pursuit of PIC/S and SRA certifications is necessary to unlock export market access. BFBIO’s API sourcing is ~85–90% import-dependent, with procurement planning and forward-buying practices used to buffer supply chain disruptions. DRAP GMP compliance is maintained, and the Company monitors regulatory developments affecting pricing and product registration. BFBIO’s entry into the GLP-1/GIP segment (Sematide, Zeptide) places it in competition with multinational originators and multiple domestic manufacturers pursuing the same opportunity. Pricing pressure, formulary competition, and the rapid pace of innovation in this class create execution risks for margin sustainability in the anti-obesity and diabetes portfolio.

The Company’s working capital cycle elongated modestly during 9MFY26, with gross working capital days rising to ~96 days (FY25: ~88 days). This was driven primarily by an inventory build-up, with total inventory days reaching ~81 days (FY25: ~76 days). The inventory build reflects BFBIO’s strategy of maintaining higher raw material buffers to mitigate supply chain disruptions arising from geopolitical risks and the closure of the Afghanistan border impacting logistics. Trade receivable days increased marginally to ~15 days (FY25: ~12 days), broadly consistent with historical norms for the sector and reflecting the higher institutional sales mix. On the liability side, payable days contracted to ~11 days (FY25: ~18 days), suggesting shorter supplier payment terms or a change in the creditor mix. As a result, net working capital days widened to ~85 days (FY25: ~70 days), representing a modest but monitored deterioration. Operating cash flow was negative at PKR (161mln) during 9MFY26, driven by significant working capital consumption. While the Company maintained liquidity through short-term investments and credit lines, a sustained period of negative operating cash generation could pressure financial flexibility and accelerate reliance on short-term borrowings. The liquid cover ratio declined to approximately 9.9x in 9MFY26 from approximately 11.7x in FY25, due to the drawdown of short-term credit lines to fund working capital requirements.

The Company’s coverage profile improved in 9MFY26, driven by EBITDA growth and continued moderation in finance costs. EBITDA expanded to ~PKR 1,167mln over the nine-month period (annualized: ~PKR 1,556mln). The EBITDA-to-finance-cost ratio improved to ~17.6x (FY25: ~8.8x), reflecting both operating earnings growth and declining interest burden as long-term debt amortizes under a declining rate environment. The coverage ratio improved to ~13.4x (FY25: ~5.9x), supported by FCFO of approximately PKR 887mln during the nine months, which represents an ~80.5% increase over FY25 annualized levels. Core debt service coverage improved to ~2.2x (FY25: ~1.2x), and the debt payback period improved to ~1.7x (FY25: ~3.9x). These metrics provide adequate headroom above debt service obligations and reflect the deleveraging trajectory.

The Company’s capital structure remained sound as of 9MFY26, with the leverage ratio at ~28.7% (FY25: ~31.6%; FY24: ~54.0%; FY23: ~62.1%), continuing a multi-year deleveraging trajectory supported by equity accumulation from retained earnings (Equity: PKR 5,127mln at 9MFY26, vs. PKR 4,662mln at FY25) and active long-term debt repayments of ~PKR 282mln during the nine-month period. Total borrowings were broadly stable at PKR 2,068mln (FY25: PKR 2,157mln). A notable shift in 9MFY26 is the increased utilization of short-term borrowings, which rose to ~PKR 216mln (FY25: ~PKR 29mln), representing ~10.4 of total borrowings (FY25: ~1.4%). This reflects the Company’s use of working capital facilities to partially fund the significant inventory and receivables expansion. The remaining IPO proceeds balance of ~PKR 282mln as of March 2026 provides some financial flexibility for the planned cartridge facility and ongoing product development milestones.