South African pharma giant Aspen hit by mRNA contract loss

Aspen Pharmacare, led by Stephen Saad, reported weaker interim results for the six months ended Dec. 31, 2025, reflecting the impact of a cancelled mRNA manufacturing contract and restructuring costs. The drugmaker said the performance reflects a transition period, not a sustained change in its underlying business.

Revenue declined 4 percent to R21.1 billion ($1.28 billion), weighed down by the absence of a prior-year boost linked to the mRNA contract. Aspen said it expects a stronger second half, with early signs that changes in its manufacturing operations are beginning to support performance.

EPS drops on restructuring charges

Earnings reflected sustained pressure. Normalized EBITDA fell 13 percent to R5.1 billion ($311 million), in line with guidance, as the prior year included a R1.5 billion ($91.4 million) contribution from a cancelled contract. Profit was also reduced by R695 million ($42.3 million) in one-off restructuring costs tied to sterile finished dose facilities in South Africa and France.

As a result, headline earnings per share dropped 35 percent to R4.174 ($0.25), while basic earnings per share declined 38 percent to R3.311 ($0.20). The company said these figures reflect short-term cost pressure rather than underlying demand trends.

Commercial unit EBITDA up 11 percent

Outside manufacturing, Aspen’s commercial pharmaceuticals business showed steady demand. Revenue in the segment rose 4 percent to R16.6 billion ($1.01 billion), while normalized EBITDA increased 11 percent at constant exchange rates. Growth was supported by demand for Mounjaro in South Africa and improved contributions from operations in China. However, a stronger rand reduced part of those gains when reported in local currency.

Aspen is also moving ahead with plans to sell its Asia-Pacific business in a deal valued at A$2.37 billion ($1.66 billion). The transaction, announced in late 2025, is expected to close by the end of May 2026, subject to shareholder approval. Proceeds are expected to reduce most of the group’s net debt, which stood at R28.6 billion ($1.74 billion) at the end of the period, and give the company more room to fund future investments.

Aspen projects stronger earnings growth

Looking ahead, management said it expects full-year normalized EBITDA at constant exchange rates to be at least double the first-half figure of R3.8 billion ($232 million). The company also expects double-digit growth in normalized headline earnings for the 2026 financial year.

In manufacturing, Aspen said commercial insulin production at its South African sterile facility is on track for final regulatory approval in the first quarter of 2026. The group expects its sterile facilities in South Africa and France, which are currently loss-making, to return to positive normalized EBITDA and cash flow by the 2027 financial year.