The Recovery Journey
It's been it's been a journey Bronwyn, you know, you've lived the journey with me for a long time. We took a really big bet on sterile manufacturing, what you put into eyedrops, syringes, vaccines. And we thought the world was moving that way some time ago. And 5 or 6 years later, it's been R10 billion without any return.I remember the first year the analysts said, you guys are wonderful, we like it, and then your ROIC is down and we say what do you expect we've got bricks and mortar?
Investment paying off
The value of the platform that we have built is now being demonstrated. It started with COVID, that was what in bush terms, I call that a mock charge. There was a mock charge where we were promised billions. But the market has really opened and there is a big plan on vaccines, but a bigger play in the obesity market.
The Global Obesity Market
The two companies that are leaders in that space, Lilly and Novo between them have got a market cap of over a trillion dollars. That's largely on the back of where the world sees obesity going. So that's the market and from an Aspen perspective, we are looking to see how can we be involved in this market because they use their our products.
The money is starting to come in
We'll get our first 500 million next year, no less than 3 billion the following year, and no less than four billion the year after that. We are hoping with the squeeze now in the next few months we will have an even bigger push on that manufacturing plant to reach capacity. And then our returns become very substantial on the money invested. What you are going to find is that as supply becomes more plentiful as generics come into the obesity market the market will just keep growing from a manufacturing point of view. In the short to medium term there will be stock constraints, we're not sure how much and it is dependent on how much we can get in and out from a global level. In this instance we are in the very "unfamiliar role" of having the branded product only, for now.
The future
I think the major difference between where we were in Covid and now is that during Covid we were promised the world as we rolled out our sterile manufacturing plant and then those promises disappeared over night. But now we are in a much better place because before we even talk about obesity, we've got three or four really large products, which are called take or pay, what take or pay means that is that you can't promise and not deliver. In other words, if you say we want 100 units at $100, you will pay for those 100 units of capacity, even if you don't use it. So that's what a take or pay contract is we will bank that money regardless. You've got to learn from your mistakes and you don't want to learn lessons twice.