African drugmaker Aspen says new Latam and Eli Lilly portfolio boosting earnings

Source: Reuters.

Its shares closed 11.7% stronger at R182.

The South Africa-based pharmaceutical company is betting big on contracts for a class of medicines known as GLP-1 analogues for diabetes and weight loss.

It has an agreement with Eli Lilly to sell, promote and distribute the American drugmaker's pharmaceutical portfolio in sub-Saharan Africa, including Mounjaro in South Africa, which became available in late December.

In 2023, it also bought the commercialisation rights and related intellectual property for a portfolio of products in Latin America from Canonsburg, Pennsylvania-based Viatris.

These businesses helped boost revenue growth in the group's commercial pharmaceuticals business by 13% in constant currency terms to R16.1bn in the six months to 31 December.

Normalised earnings before interest, tax, depreciation and amortisation (EBITDA) from commercial pharmaceuticals grew 13%.

Aspen, which also has a presence in Asia, the Middle East, Africa, Australasia and Europe, said the double-digit forecast was in constant currency terms.

The company recorded normalised headline earnings per share (HEPS) of 724.2 South African cents. Group revenue grew by 4% to R21.9bn, with EBITDA up 12% at R5.8bn.

Chief executive officer Stephen Saad noted that the company is seeing increased demand for Mounjaro. "Before we even launched, it had (a) nearly 20% (share) of the (South African) market," he said, based on generated scripts.

Aspen has also applied to broaden the reach of the product to weight management, Saad said, adding that it is registering Mounjaro in some sub-Saharan African markets.