South African billionaire Stephen Saad loses more than $250 million from Aspen Pharma stake

The market value of South African billionaire Stephen Saad’s stake in Aspen Pharmacare Holdings, Africa’s largest drug manufacturer, has dropped by more than $250 million since the start of the year, as investors continue to price in the difficult operating environment into shares.

Aspen Pharmacare Holdings Limited is a multinational holding company founded 25 years ago by Saad, a billionaire businessman and South African pharma tycoon. He owns a 12.5-percent stake in the drug company worth $566 million.

Shares in the leading drugmaker have dropped by more than 31 percent since the start of the year, as investors reduce their stakes in pharma and tech companies as part of a strategic move to preserve wealth in the post-pandemic period, as demand for vaccines and PCR tests gradually decline.

According to data obtained by Billionaires.Africa, shares in Aspen Pharmacare Holdings have dropped from R224.44 ($14.39) at the start of the year to R154.63 ($9.92) at the time of writing this report, resulting in a 31.1-percent loss for shareholders in 156 days.

The decline in Aspen shares reduced the market value of Saad’s stake from R12.83 billion ($822.7 million) at the start of the year to N8.84 billion ($566.82 million) at the time of writing.

This amounts to a total loss of R3.99 billion ($255.9 million) for the pharma billionaire since the year began, as investors continue to sell down stakes in the leading drugmaker.

Aspen Pharmacare Holdings recently announced plans to shift approximately half of its COVID-19 vaccine production capacity to other products if demand does not improve within six weeks.

The decision comes several months after Aspen reached an agreement with Johnson & Johnson (J&J) to develop and distribute an Aspen-branded COVID-19 vaccine throughout Africa in response to a lack of demand for Aspenovax, the Aspen-branded COVID-19 vaccine.

With a nameplate capacity of 1 million doses per day, roughly half is being used to fulfill a supply agreement with J&J, while the remaining capacity, which was supposed to produce Aspenovax shots for the African market, is presently idle.

According to Saad, maintaining capacity when demand is non-existent is pointless.