The pharmaceutical group Aspen, which reported a 21% increase in its headline profit per share on Wednesday, isin talks with Johnson & Johnson to expand its Gqeberha site to increase Covid-19 vaccine production, and is also negotiating to secure a licence to produce the vaccines.
Currently, Aspen’s factory in Gqeberha only handles the final stage of the vaccination, or the so-called "fill-finish process".
It imports the coronavirus vaccine in frozen format from Johnson & Johnson. It is then thawed, after which vials are filled with the liquid vaccine, and then sealed.
If it gets the licence from Johnson & Johnson, it will produce the drug substance itself - which is like a concentrate in the production of the vaccines - in South Africa.
In a statement, Aspen said that the production of Covid-19 vaccines at its Gqeberha site was "the standout achievement" over the past financial year.
Supported by a 36% increase in manufacturing revenue (due in part to the vaccine contract), its group revenue increased by 12% to R37.8 billion in the year to end-June.
But the company said that "the low/no margin nature of the transaction-related finished dose form supply" weighed on its profit. The first of the vaccine sales (valued at around R400 million) started in the past few months.
The company’s debt burden shrank from R35 billion to R16.3 billion in the past year, thanks to the sale of its European thrombosis business, as well as thanks to strong operating cash flows and a stronger.
After Aspen did not declare a dividend in the previous year, it has now declared a dividend of 262c per share for the past year.