By Nqobile Dludla JOHANNESBURG (Reuters) -Aspen Pharmacare’s manufacturing division aims to grow profit by 2027 by commercializing an insulin deal and producing GLP-1 drugs, after the ending of a major contract led to a full-year loss of 1.1 billion rand ($63 million). The after-tax loss in the year ended June 30 compared to a year-ago […]
Health
South Africa’s Aspen aims for profit turnaround with insulin, GLP-1 drugs
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By Nqobile Dludla
JOHANNESBURG (Reuters) -Aspen Pharmacare’s manufacturing division aims to grow profit by 2027 by commercializing an insulin deal and producing GLP-1 drugs, after the ending of a major contract led to a full-year loss of 1.1 billion rand ($63 million).
The after-tax loss in the year ended June 30 compared to a year-ago profit of 4.4 billion rand, Aspen said on Wednesday, while citing asset impairments of 4.1 billion rand for the loss.
Group revenue edged 1% higher in constant currency terms to 43 billion rand.
In April Aspen disclosed a customer dispute, the details of which are confidential, over a contract to manufacture messenger ribonucleic acid (mRNA) products such as vaccines using synthetic strands of genetic code to instruct cells to produce specific proteins.
Manufacturing revenue fell 21% to 11.1 billion rand, while normalised earnings before interest, taxes, depreciation and amortisation (EBITDA) dropped 62% to 668 million rand, mainly due to the lost contract, the company said.
Aspen aims to offset lost manufacturing capacity with an insulin contract in South Africa, as it progresses toward commercialization. The company forecast revenue of about 300 million rand for fiscal 2026, and more than 1 billion rand in fiscal 2027.
To cut costs, Aspen plans in calendar 2025 to restructure its manufacturing facilities in France and South Africa that produce sterile drugs entirely free from living microorganisms.
For the overall manufacturing business, Aspen is betting on the production of paediatric vaccines for the Serum Institute of India, expected to commence sales in 2026, and the integration of GLP-1 drugs for obesity and diabetes treatments at both facilities.
“We believe those volumes will give us some upside,” group CEO Stephen Saad told Reuters.
Commercial pharmaceuticals sales rose 5%, with normalised EBITDA growth of 1%, supported by organic revenue growth in injectables, over the counter medicines and prescriptions. Further gains came from the South African rollout of diabetes drug Mounjaro, which Aspen sells on behalf of Eli Lilly.
($1 = 17.5632 rand)
(Reporting by Nqobile Dludla; editing by Barbara Lewis and Richard Chang)