Patheon N.V. (NYSE: PTHN) (ticker symbol pending) plans to raise up to $625 million in its IPO that is scheduled for July 21, 2016. The company is offering 30.5 million shares at a price range of $19.00 to $22.00 per share. The underwriters will have the option to purchase up to 4,573,171 additional shares. The underwriters for the offering include Credit Suisse, Jeffries, J.P. Morgan, Morgan Stanley, UBS Investment Bank, Wells Fargo Securities, Baird, Piper Jaffray, Raymond James, William Blair, KeyBanc Capital Markets and Leerink Partners.

Business summary

Patheon N.V. provides outsourced manufacturing and pharmaceutical development services globally. The company is one of the largest contract drug manufacturers and is based in Amsterdam. According to its SEC filings, it is the only company worldwide that provides end-to-end integrated services, allowing the company to offer a comprehensive suite to its customers in order to address all of their development and drug manufacturing needs. Patheon supports across all stages of drug development, from created the drug formulations and active ingredients, to providing large-scale manufacturing and packaging.

Executive management overview

James Mullen has served as the CEO of Patheon since joining the company in 2011. During his tenure, he has led Patheon through its acquisition of Banner Pharmacaps in 2012 and in the merger of Patheon with DSM Pharmaceutical Products in 2013. Prior to joining Patheon, Mullen previously served as the CEO of Biogen Idec Inc. Other positions he held at Biogen included: Chairman, CEO and president of Biogen before its merger with Idec was finished. Mullen has more than 30 years of pharmaceutical and executive management experience and previously served the Biotechnology Industry Organization as its chairman. He earned his Bachelor of Science in chemical engineering at the Rensselaer Polytechnic Institute and completed his Master of Business Administration at Villanova University.

President Michel Galarde joined Patheon in 2016. He is in charge of the company's cross-enterprise and global operations. He previously worked at JLL Partners, a healthcare middle-market private equity firm. Prior to that, Galarde served as the CEO and CFO of Philips Electronics North America's domestic appliances and personal care division. He holds a Bachelor of Business Administration from the European University Antwerp, as well as an Executive Master in finance and control from the University of Maastricht & Amsterdam.

Financial highlights and risks

Patheon has generated revenues of $1.8 billion and a net income of $9.7 million in the past 12 calendar months. In the past 10 years, the company has developed 92 new drugs that were approved. The company employs 8,800 people in the U.S., Canada, Australia, Europe, China and Japan and boasts 400 blue-chip companies as its customers in 25 locations across the globe. Among its customers, it counts 18 out of the 20 world's largest pharmaceutical companies.

Patheon names three major risks for its business. First is if customers stop outsourcing their development and manufacturing needs. Second is that a large portion of its revenue comes from a small number of customers, so the loss of any of them could have a negative impact on the company's bottom line. Third, the company is subjected to multiple regulations with which it must comply, which could potentially drive up its operating costs and expose it to liabilities.

Conclusion: Consider buying

As one of the largest contract manufacturers of pharmaceutical drugs in the world, Patheon has demonstrated explosive growth and impressive revenues. The company has strong financials and has significant experience with 92 new drug approvals. Patheon looks like a good investment option for investors to consider, and we recommend that investors consider an investment.

We hear the deal is already oversubscribed and continues to build in popularity.