Aspen Pharmacare has called an abrupt investor call after it warned that its manufacturing business is facing a “material contractual dispute” that might lead to core earnings plunging by as much as R2bn.
The company, Africa’s biggest drug manufacturer, did not go into the details detail of the dispute. The group is expected to take investors into its confidence on Wednesday when it fields questions on the matter.
However, the company indicated that the dispute involves a manufacturing and technology agreement “with a contract manufacturing customer for mRNA products”.
JSE-listed Aspen has a sterile manufacturing contract for mRNA vaccines. Last year, it said the sterile manufacturing contract for mRNA filling had reached commercialisation stage.
“Aspen alerts shareholders that risks have recently arisen relating to Aspen’s manufacturing business, including a material contractual dispute. As a consequence, shareholders are advised that normalised ebitda from the manufacturing business for the 2025 financial year in constant exchange rate will potentially be R2bn lower than last guided,” the company said in a late regulatory filing on Tuesday.
“It is too early to estimate the full financial effects on the 2026 financial year and future years due to possible variable outcomes to the dispute and mitigating activities that will be undertaken.”
The company also said on Tuesday the dispute might see it impair R700m in the 2025 financial year.
The statement also suggested the trade war initiated by the US is likely to affect its manufacturing business.
“The pharmaceutical industry has been, and we expect, will continue to be affected by the current turbulent and unpredictable world trading environment. Furthermore, those that sell products in the US are likely to look to source these products from manufacturing sites within the US,” it said.
“Other countries and continents have also been impacted as health security and independence have become a greater priority. This shifting landscape provides both risk and opportunity for Aspen’s contract manufacturing business.”
The group, led by founder Stephen Saad, operates 24 manufacturing facilities across 15 sites. Its manufacturing capabilities includes a wide range of products, including steriles, oral solid doses, liquids, semisolids and biologicals.
In March, the group reported normalised earnings before interest, taxes, depreciation and amortisation (ebitda) of R5.83bn in the first half of its 2025 financial year, with a commercial reach to 115 countries. It said at the time core earnings in the manufacturing segment had more than doubled, driven by an increased contribution from sterile contract manufacturing.
Aspen said on Tuesday it had “valuable and needed manufacturing capacities and skills to assist in filling voids that have become evident in the changing global pharma landscape”, and that it “will work diligently to reposition Aspen for the new opportunities which present themselves in this fluid environment”.
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