An Aspen Pharmacare investor is sending the JSE a formal complaint after shares in Africa’s largest generic drug maker fell the most in five years on Friday following a conference call it hosted.
“We are a holder of Aspen stock and when it started moving on Friday, we had no idea what was going on as we had not been invited to the conference call,” said Owen Nkomo, an executive partner at Inkunzi Investments.
“The smaller participants were prejudiced, especially because emphasis was made of a deteriorating environment and margins.” This was translated to indicate that things were worse than after their last update, he said.
Aspen’s stock dropped 6.2 percent, the biggest decline since April 2009, to R288 on Friday, the day of the call. The stock recovered 3.82 percent to close at R299 yesterday.
Aspen’s South African unit “had a disappointingly lower second half”, deputy chief executive Gus Attridge said on the conference call.
“The antiretroviral tender values have been significantly down on expectations. This has not only affected revenue but impacted on margins.”
The company released a statement yesterday saying it had hosted a pre-closed period conference call with members of the investment community and highlighted the link to the recording, which is available until tomorrow.
In the view of Aspen’s two executive directors who hosted the conference call, no price-sensitive information was communicated during this call,” Aspen said in yesterday’s statement. The company would release a trading update for the year to June as soon as “the directors have reasonable certainty on earnings per share and headline earnings per share”, it said.
The JSE would “as a matter of course contact and follow up” with Aspen, John Burke, the exchange’s director of listings, said.
While the JSE would prefer a company to release a regulatory statement before speaking to “anyone”, a company only contravened JSE rules if unpublished and price-sensitive information was selectively given, he added.
“As a matter of principle, this issue is important,” Nkomo said. “The question is, how does the JSE avoid this happening in future?”
Aspen supplies medicines in more than 150 countries and last year bought injectable thrombosis brands, including a manufacturing site and inventory, from London-based GlaxoSmithKline for £700 million (R12 billion). – Bloomberg