Multinational pharmaceutical giant Aspen Pharmacare hasn’t exactly put up the for-sale sign, but it would be happy to entertain further asset disposals if the price is right. This follows the sale of its Asia-Pacific (Apac) division, a R26.5bn transaction that management believes validates its long-held view that Aspen’s market capitalisation trades at a substantial discount to the sum of its parts.
Apac was sold at about 11 times ebitda, while the rest of the group — which management argues is growing faster than Apac — is valued by the market at about eight times ebitda.
Speaking at the interim 2026 results presentation, CEO Stephen Saad said Aspen must continue to find ways to unlock that value. “It doesn’t make sense for shareholders if the value remains trapped.”
CFO Sean Capazorio echoes that in an interview with the FM, adding that further asset disposals — including manufacturing facilities outside South Africa — could be considered. “We’ve got a French facility. We’ve got a facility in the Netherlands. We’ve got other facilities. And those are facilities … that have a very high value and drive a lot of value to the group. But certainly … if something comes along, we’ll always consider those types of opportunities.”
For Aspen’s leadership, the willingness to consider further disposals reflects frustration with how the market values the group. Management believes setbacks in its manufacturing division have unfairly coloured investors’ perceptions of the entire business, overshadowing the consistent performance of its commercial pharmaceuticals segment.
On current valuation multiples, the group’s manufacturing assets are effectively assigned little — or even negative — value once consolidated earnings are considered. Management disputes that view, arguing that the sterile facilities are world-class infrastructure built over many years at significant cost and should return to consistent profitability once the current restructuring is complete.
The Apac disposal still requires shareholder approval, with a vote expected in April and completion anticipated by end-May. If it proceeds as planned, the deal will dramatically reshape Aspen’s balance sheet and largely eliminate the group’s debt for the first time in nearly 30 years.
During the results presentation, Saad struck a light-hearted tone when discussing Aspen’s capital allocation plans. “I think the first thing I’ll do is just look at the cash for a little while.”
On a more serious note, Saad indicated that if the share price remains at current levels, his preference would be to pursue share buybacks. However, he stressed that the final decision rests with the board. Large acquisitions have been ruled out, with management’s focus firmly on organic growth and cost optimisation.
A key contributor to commercial pharma’s growth is the rapid rise of GLP-1 medicines, particularly Mounjaro, the diabetes and weight-loss drug developed by Eli Lilly and licensed to Aspen in South Africa and certain other territories. The company forecasts that the product will generate more than R1.3bn in South African sales in the 2026 financial year, making it one of the fastest-growing products in its portfolio. Registrations across Sub-Saharan Africa should begin this year, creating an additional growth runway. Aspen also expects to secure the rights to any oral version of Mounjaro should it receive approval in South Africa.
At the same time, Aspen is positioning itself to participate in another GLP-1 opportunity through the development of a generic version of semaglutide, the active ingredient used in Novo Nordisk’s blockbuster drugs Ozempic and Wegovy.
An unusual regulatory oversight has created an opportunity in Canada, where a failure to file a patent extension means generic manufacturers may enter the market earlier than expected. Aspen hopes to be among the first companies to launch a generic semaglutide product there, potentially as early as mid-2026.
Beyond Canada itself, the approval would serve another strategic purpose. Many emerging market regulators rely on decisions from stringent authorities when evaluating generic medicines. A Canadian registration could therefore make it easier for Aspen to secure approvals across its key emerging markets.
Unlike Mounjaro, which Aspen distributes but does not manufacture, the generic semaglutide product would be partially manufactured in the group’s sterile final-dose facilities, where Aspen would perform the fill-finish stage of production. This could help improve utilisation at plants that have struggled with undercapacity in recent years.
Additional volumes are also expected from insulin manufacturing contracts and other agreements, which should gradually improve profitability.
Management’s broader objective is to rebuild earnings following both the Apac disposal and the loss of a major mRNA manufacturing contract. Aspen is targeting a return to about R9.6bn in ebitda by the 2027 financial year, driven by growth in commercial pharmaceuticals, expansion in GLP-1 products and improved manufacturing performance.
If the strategy succeeds, Aspen could emerge from its latest reset with stronger earnings, minimal debt and rising free cash flow. The Apac sale has shown that parts of the group can command valuations well above what the market currently assigns to the company as a whole. Management’s challenge now is to convince investors that the rest of the business deserves similar recognition.
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