Aspen founder and CEO Stephen Saad has spent about R100m buying the group’s shares, in a move seen to be a bid to shore up confidence in the company’s medium- to long-term prospects after a plunge in its value over the past month.
Saad, who is the company’s second-largest shareholder behind the Public Investment Corporation (PIC), bought more than 850,000 of the group’s securities this week, valued at just less than R102m.
The move by Saad, who cofounded the pharmaceutical group in 1997, comes just weeks after the company’s stock plunged on the JSE. Aspen made an abrupt investor call after it warned that its manufacturing business faced a “material contractual dispute” that might lead to core earnings plunging as much as R2bn.
Though the company, Africa’s biggest drug manufacturer, has not provided details of the dispute, it has indicated that the clash involves a manufacturing and technology agreement “with a contract manufacturing customer for mRNA products”.
It said it was too early to estimate the full financial effect 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 the dispute might see it impair R700m in the 2025 financial year, adding the trade war initiated by the US was likely to affect its manufacturing business.
The investor call did little to calm investor jitters, with the group’s stock down 21% over the past 30 days, and down 27% for the year to date — shedding more than R20bn in value in the process.
Aspen, which operates 24 manufacturing facilities across 15 sites, is now valued at R53bn, with its market value down nearly 50% over the past year.
What added to investor jitters was the company’s suggestion that the trade war initiated by the US was 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 in mid-April.
“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 market jitters around the company also happened shortly after it secured a €500m loan package from a development finance consortium led by the World Bank’s International Finance Corporation (IFC).
This is as the company has bolstered its plans for the development of medicines and vaccines for Africa.
Aspen has also applied to the medicines regulator for the registration of the drug tirzepatide — used to treat type 2 diabetes — as a weight loss medication.
In October, Saad 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 more than $142bn by 2030.
In 2023, the country’s largest generic drugmaker bagged a deal that would give it exclusive rights to market, distribute, use and sell Amgen’s products in the country.
The US-based Amgen has a presence in 100 countries and regions and its medications are used in the fight against serious illnesses such as cancer, cardiovascular disease, osteoporosis, asthma, rheumatoid arthritis and many others.
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