The Aspen Pharmacare Holdings offices in Durban.
DURBAN - Africa's biggest generic drug maker, Aspen Pharmacare, saw its price taking a heavy beating on the JSE in the past two days after the rumours that the company might be the next target to be investigated by Viceroy Research, a New York-based research group that published an exposé on Steinhoff International accounting irregularities.

The share price shed 4percent yesterday morning to R240.33 a share, down from Tuesday’s closing price of R250.13 a share and closed at R243.81.

Overall the share price has declined by 9.05percent in the past two days since the rumours started. It had closed on Monday at R262.08 a share.

Industry analysts said it was still too early to tell what would happen.

Izak van Niekerk, an investment analyst at Mergence Investment Managers, said at the moment it is pure market speculation that Aspen was the next target of Viceroy Research.

“It could be another South African company. The only information that Viceroy Research released was that they are working on a South African company,” Van Niekerk said.

He added that Viceroy released a tweet in which it did not mention the name of the company. “We are working on European, South African, and US names for first quarter 2018,” read the tweet from the Viceroy Group posted on Tuesday. “We view market reaction to this news as highly speculative at this stage,” Van Niekerk added.

The DA said yesterday that there was no evidence that Aspen Pharmacare had engaged in alleged anti-competitive behaviour. Photo: Simphiwe Mbokazi

Byron Lotter, a portfolio manager at Vestact Asset Management, agreed and stated that Aspen should have been very transparent with the market on any questions that are asked and the release of the SENS on Tuesday was a good start.

“Stephen Saad has a great reputation; he should remain visible throughout this period. Other than that, there is nothing more they can do, but it remains business as usual. These are all still rumours at this stage,” Lotter said.

Michael Trehne, a portfolio manager at Vestact, said what they do know was that Aspen was being investigated by the UK Competition and Markets Authority for two drugs that had a combined revenue of £11.1million (R186m). “This investigation was opened in October last year,” Trehne said.

In response to the rumours, Aspen released a statement on Tuesday in which it said it has become aware that there is market speculation regarding a possible report into Aspen being undertaken by Viceroy Research.

“Aspen shareholders are advised that it has had no contact with Viceroy Research and, as such, is unable to confirm that this speculation is correct. Aspen furthermore advises that it is not aware of any information of a price-sensitive nature that requires communication to shareholders and that trading in the current financial year has been consistent with the prospects communicated to shareholders in the 2017 financial year results announcement,” the group said.