Bubs Australia gets permanent FDA nod for infant formula sales in US, shares jump

Sept 7 (Reuters) – Bubs Australia said on Monday it secured permanent authorisation from the U.S. Food and Drug Administration to sell three infant formula products in the country, sending its shares up 30% to their highest close since mid-February.

Here are the details:

• The stock surged as much as 45% to A$0.145 during the session, its strongest intraday percentage gain since late-May 2022, before closing 30% higher.

• The company said it secured FDA approval for Bubs Goat, Bubs 365 Day Grass Fed and Bubs Essential.

• The company added that the authorisation places it among a limited number of international manufacturers permitted to supply the U.S. infant formula market.

• The firm is also evaluating an entry into the U.S. private label infant nutrition segment, following the approval.

• The approval comes amid tighter regulations and supply chain disruptions for infant nutrition companies in Australia and New Zealand.

• Last month, Bubs reported an annual EBITDA loss of A$1.8 million ($1.30 million).

• However, the company said it expects a stronger first half in 2027, supported by growing demand in the U.S., a key market in its strategy to diversify beyond China.

• Meanwhile, New Zealand-based dairy firm a2 Milk said in its annual results last month that supply constraints hurt earnings, highlighting the operational and regulatory complexities facing companies in the sector.

($1 = 1.3881 Australian dollars)

(Reporting by Aamir Shaik Khalid in Bengaluru; Editing by Eileen Soreng)