By Nqobile Dludla
JOHANNESBURG (Reuters) – The U.S. Food and Drug Administration (FDA) has approved Aspen Pharmacare’s hydroxyprogesterone caproate (HPC), which is used to prevent preterm birth in pregnant women, the South African drugmaker’s CEO said on Thursday.
Aspen, which operates in about 56 countries, has said before that it views the United States as presenting targeted growth opportunities for its niche women’s health products such as conjugated estrogens, which is used in menopausal hormone therapy.
Aspen got the FDA abbreviated new drug application approval in early August for a preservative-free, single-dose vial, Chief Executive Stephen Saad said at the pharmaceutical’s annual result presentation.
Aspen will manufacture the product and sell it to its partner to market and distribute in the United States, where it does not have representation.
“A profit-share agreement is in place for net sales above $30 million,” Saad said.
It has already earned $10 million in milestone payment on receipt of the approval. It will receive a further $20 million, subject to the partner achieving $30 million in net sales on HPC, he added.
Aspen has also struck a deal with an Indian company to provide it with the active pharmaceutical ingredients (API) used to make antiretrovirals (ARV), deputy CEO Gus Attridge told Reuters in an interview shortly after the presentation.
“They will supply us the chemicals, we will supply the product to the state and when the state pays us we’ll take a fee off the top and we will pay them what is left,” Attridge said without naming the company.
“Ultimately the model will evolve, subject to approval by the competition authorities, to where we simply manufacture for them and they’ll have the tender and we’ll get a fee for manufacturing.”
This will eliminate exchange rate and working capital exposure, Saad said. The largest input cost to ARVs is the API, which is priced in U.S. dollars.
The country’s biggest pharmaceutical manufacturer pioneered the first African produced generic ARV, which it supplies to the state and the private sector.
In November, it launched a new Emdolten drug, which is a once-a-day tablet in the form of dolutegravir, an antiretroviral medication that counters the drug resistance that often develops with older HIV treatments.
On Wednesday Aspen reported a 4% decline in full-year normalised earnings before interest, tax, depreciation and amortization due to a lower contribution from its manufacturing business and said it will not pay a dividend this year.
Shares closed 10.97% firmer at 94.25 rand on Thursday after it lowered its full-year debt, which had concerned investors as levels moved close to breaching debt covenants.
(Reporting by Nqobile Dludla; Editing by Lisa Shumaker)