Aspen Pharmacare Shares Crashes 33% on R2.77B Shock—Here’s What Happened

Aspen Pharmacare (JSE: APN) had one of its worst days in years—losing a third of its value in a single day. The fall came after the company issued a late Tuesday warning that a contractual dispute could cost it up to R2.77 billion. That includes a R2 billion hit to EBITDA and a further R770 million impairment on mRNA manufacturing technology.

The market was brutal. By midday Wednesday, Aspen’s stock had dropped to R107—its lowest since 2020—breaking through key support levels with heavy volume. For a company long seen as a local pharmaceutical success story, the news was a shock to the system.

What We Know—and What’s Still Unclear

Aspen won’t say who the client is, citing confidentiality. But analysts believe it’s a U.S. pharma partner, given Aspen’s reference to “changing demand for U.S.-made supplies”.

The timing isn’t coincidental. Glbal otrade tensions are back in the spotlight with U.S. President Donald Trump’s tariff policies forcing buyers to prioritize local production. That could be bad news for offshore manufacturing deals, especially in specialized areas like mRNA where Aspen has invested heavily.

This isn’t just Aspen’s problem. It’s part of a bigger trend:

• U.S. pharma companies are localising supply chains to hedge against tariffs.

• South Africa’s pharma exports are under pressure from trade nationalism.

• Political and regulatory uncertainty adds another layer of risk for JSE-listed manufacturers.

What the Chart Says: Don’t Rush In

From a technical perspective, the damage is done. Aspen has broken below its long-term support at R165 and fallen through the 50-week EMA at R180. Momentum indicators like the MACD are bearish and showing no signs of stabilising.

Key Levels to Watch:

• Support: R103 (short-term), R82.50 (long-term low from 2020)

• Upside Recovery Zones: R132.50, R165.20 (if a bounce occurs)

Trade Ideas for Cautious Traders:

• Enter only on a confirmed bounce from R103 with volume support.

• Alternatively, look for a breakout above R132.50 if sentiment improves.

• Stop Loss: Below R103 to protect against further downside.

Verdict: Bargain or Breakdown?

Aspen looks cheap at current levels—but that’s dependent on how this plays out. Until we get clarity on the legal outcome and whether they can limit the damage, be cautious. This isn’t a bounce back; it’s a wait and see. Let the chart speak—and for now it’s saying: wait and watch.