By Promit Mukherjee
JOHANNESBURG (Reuters) -South African drugmaker Aspen Pharmacare is close to signing four partnerships to revive its COVID-19 vaccine production lines that are generating no revenues, its CEO said, sending its shares up almost 10% in the day.
Aspen had a contract with Johnson & Johnson to produce 250 million doses a year of COVID vaccine from its South African plant.
It expanded the capacity to 400 million annual doses last year to sell its own branded COVID vaccine Aspenovax anticipating a major flow of orders from African countries. A year on, it has not secured any orders.
“Let’s be honest. That was a bit of a commercial disappointment,” CEO Stephen Saad told Reuters in an interview after its interim earnings.
But Saad said the partnerships it was pursuing meant production lines designed for COVID vaccine would start generating returns.
“You can’t sit and cry in the past,” Saad said. “We found another plan and that plan is going to deliver more than we ever could have hoped for under COVID.”
He said the company was in advanced discussions with four multinational firms to produce other vaccines or biologics, a group of medicines such as vaccines that are made from living organisms.
In August it had signed a deal with the Serum Institute of India to manufacture and sell four Aspen-branded regular vaccines for Africa.
The company anticipates a contribution of 2 billion rand ($110.22 million) in calendar year 2024, increasing to 4 billion rand by 2025 under these partnerships, Saad added.
For the six months that ended Dec. 31, Aspen’s headline earnings per share, a profit measure widely used in South Africa, dropped 15% to 660 cents on account of inflationary pressures, supply chain issues and a drop in COVID vaccine sales.
Despite a tough economic environment, Aspen maintained its guidance that its results for the second half will be better than the corresponding period a year before and will surpass the first half, it said.
($1 = 18.1458 rand)
(Reporting by Promit Mukherjee, Editing by Louise Heavens and Barbara Lewis)
