Aspen boss says licensing deal a ‘coup’

Aspen Pharmacare CEO Stephen Saad has hailed the group’s licensing agreement to enter the rapidly expanding GLP-1 agonist market, deeming it “a coup”.

With preparations under way to ensure readiness for the GLP-1 market by 2026, the agreement positions Aspen to tap into a lucrative sector driven by increasing global demand for diabetes and obesity solutions, with the market projected to expand to over $142bn (R2.5-trillion) by 2030.

“We are pleased to have secured a licence agreement for the IP of a GLP-1 product for these early patent expiration countries, which presents us with both commercial and manufacturing opportunities, covering both multi-dose pens and autoinjectors. Given the complexity of these products, securing this licence is a significant coup for Aspen, with the potential to unlock substantial value,” Saad said in his letter to shareholders published in the group annual report.

“The opportunity is not without risk given that market dynamics and regulatory timelines remain uncertain. However, we believe in our strategy of pursuing this market with an arrangement that provides us with both a return per unit manufactured as well as the opportunity for additional much higher incremental returns on commercial sales,” Saad said.

According to GlobalData, the GLP-1 agonist market, which includes injectable medications that help control blood sugar and promote weight loss, is now dominated by high-profile drugs such as Ozempic, Wegovy, Mounjaro, Cagrisema and Rybelsus. The five products are expected to capture 83% of the market share by 2029. Aspen’s entry comes at a critical time, as key patents are set to expire in 2026.

Aspen’s established manufacturing facilities in SA and France are set to play a big role in meeting the high demand for GLP-1 products, which have been hindered by insufficient manufacturing capacity globally.

Select markets

Under the licensing agreement, Aspen has the intellectual property rights to manufacture and commercialise a GLP-1 product in select international markets. The company is set to serve as the exclusive supplier for these products, which include complex delivery formats such as multi-dose pens and auto-injectors that enhance patient accessibility and user-friendliness, it said in its 2024 integrated report.

Aspen’s existing capacity for sterile injectables uniquely positions the company to address the growing needs of the

GLP-1 market. The group said it had already seen strong performance in its sterile manufacturing segment, driven by contracts for mRNA vaccines and GLP-1 injectables, which had exceeded expectations in the second half of 2024 financial year.

As production ramps up at Aspen’s local and French facilities, the company anticipates that sterile manufacturing will remain a growth driver. Aspen projects an incremental constant exchange rate ebitda of R2.45bn for 2025 financial year to the 2026 financial year, driven by increasing demand for GLP-1 products.

Looking ahead, Aspen has set growth targets for the 2025 financial year, including double-digit constant exchange rate revenue growth within its commercial pharmaceuticals segment. Despite a projected decline in overall manufacturing revenue due to a shift to a toll model for heparin, the focus on sterile manufacturing is expected to drive growth.

‘Transformative shift’

The GLP-1 licensing opportunity is projected to benefit both the commercial pharmaceuticals and manufacturing segments as early as 2026, pending regulatory approvals. Additionally, Aspen’s portfolio expansion would be bolstered by acquisitions, such as Sandoz China and Eli Lilly products in SA and Latin America, helping to offset challenges in the Chinese market, the group said.

GlobalData said the GLP-1 market was expected to grow faster than other pharmaceutical sectors, outpacing the PD-1 antagonist market, which was projected to reach $51bn by 2029.

“The pharmaceutical landscape is undergoing a transformative shift, as GLP-1 agonists are poised to surpass PD-1 antagonists as the best-selling drugs from 2024 onward,” said Kevin Marcaida, pharma analyst at GlobalData.

“This shift could reflect a changing demand away from oncology towards addressing metabolic disorders. As industry leaders such as Novo Nordisk and Eli Lilly drive this evolution, GlobalData anticipates a reorientation in drug preferences in the coming years,” he said.

goban@businesslive.co.za