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Highlights
- Bubs has secured the US FDA Infant Formula Enforcement Discretion for importing its infant formulas to the US.
- The company will supply approximately 1.25 million tins of infant formulas to the US.
- The share price of Bubs skyrocketed on the ASX post this announcement.
The shares of Bubs Australia Limited (ASX:BUB) were spotted trading 40.206% higher at AU$0.680 per share at 11:00 AM AEST on the ASX today (30 May). Over 36 million shares of Bubs were traded within the short span of time after the ASX opened for trading on Monday morning.
The shares of the diary company skyrocketed on the ASX today (30 May) after the company secured the US FDA discretion to import six of its infant formulas to the USA.
The share price of Bubs has gained approximately by 101% on the ASX over the past 12 months. On the other hand, Bubs’ year-to-date share price also gained over 41% (as of 11:00 AM AEST on the ASX today, 30 May).
What made Bubs’ shares gain significantly on the ASX today?
Today, Bubs announced that the US Food and Drug Administration (FDA) informed its decision to implement discretion for the immediate import, sale and distribution of all the six Bubs Infant Formula products in the US. This is aligned with FDA’s recently released policy regarding Infant Formula Enforcement Discretion.
This announcement is primarily responsible for the share price push on the ASX today. It has also garnered investors’ attention on the ASX this morning.
As a result, Bubs is currently collaborating with the US Department of Health and Human Services (HHS) to bring out the best options for importing the products as soon as possible to the US.
Bubs has committed to the Biden Government to provide at least 1.25 million tins of its Infant Formula in the coming weeks and around 27.5 million bottles in total, including all six formulas.
The company is already ready to export about 500,000 tins to the US at this moment. The remaining 750,000 tins will also be delivered soon. The production and supply are already planned and scheduled for the upcoming months, stated the firm.
Image source: © Henrischmit | Megapixl.com
Bubs Australia Limited was the first company to respond to the new US FDA Infant Formula discretion policy. The new policy addresses the current shortage of infant formula and enhances flexibility for importing infant formula to the US.
Furthermore, the new discretion policy of the FDA reflects the rigorous review process of information portraying Bubs Infant Formula meeting safety and nutrition standards for American families.
On the other hand, the new import order to the US does not disrupt Bubs’ deal with the Australian retailers. Bubs’ export deals with the Australian diary retailers remain unchanged. However, it is subjected to the company’s ability to increase its current production rate due to the strong control of the vertically integrated supply chain and flexibility of its existing 100%-owned production facilities.
Also read: A2M, BUB, AFH, SM1: How are these dairy stocks performing on ASX today?
About Bubs:
Image Source © 2022 Kalkine Media ®
Bubs Australia Limited belongs to the ASX200 Consumer Staples sector with a market capitalisation of AU$297.19 million. The company primarily deals with the production of premium goat dairy products, including infant formulas. Bubs is the leading goat dairy products producer and supplier in Australia. Bubs’ products are also exported across major supermarkets in Australia as well as to China, Southeast Asia, the Middle East, and the US.
Also read: Bubs’ (ASX:BUB) gross revenue jumps 49% in FY22 third quarter
