Africa’s largest generic drug maker, Aspen Pharmacare, is trading at levels last seen in 2013 as negative sentiment towards healthcare companies persists.
Regulatory bodies, meanwhile, are keeping a close watch on the sector.
On Monday, the share was trading at R274.25, compared with R236.92 on August 22 2013. It peaked at R440 in 2015.
"I still think superb results will not be enough to push Aspen to previous highs," said portfolio manager at Gryphon Asset Management Casparus Treurnicht.
"Management credibility has definitely taken a knock and, at best, we should see a gradual share price increase to previous highs over the next two years."
In June, Aspen lost its appeal against the €5.2m fine levied by the Italian Competition Authority over the price of some of its cancer drugs. Domestic competition authorities also announced an investigation into the pharmaceutical industry.
While the company has defended itself against allegations of overcharging for cancer drugs, the share price has declined 3.3% in the past 90 days of trade.
Treurnicht said that sentiment on the sector was depressed because investors had chased the stock to levels that implied a "perfect earnings profile" and that regulatory bodies were "handing out fines left and right".
Aspen’s dividend policy is to pay out 0.91% of the share price.
Treurnicht said that while Aspen was still a business that operated in a good space for the long term, the poor performance coupled with a low dividend yield was not impressive.
"There has been a poor performance and it doesn’t quite qualify as a hefty dividend payer with a yield of less than 1%," he said. "We are now in a period where earnings first need to grow into the share price."
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