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Highlights
- On Tuesday (8 November), shares of a2 Milk jumped over 4% on the ASX, trading at AU$5.740 as of 2:30 PM AEDT.
- This was in line with the Consumer Staples sector’s positive performance, up 147.6 points around the same time.
- The company recently received approval from the US FDA to sell its infant milk formula products in the US.
The ASX- and NZX-listed infant formula company, The a2 Milk Company Limited’s (ASX:A2M) shares were on the rise today (8 November). At the time of writing (2:30 PM AEDT), the shares of a2 Milk were trading 4.174% higher, at AU$5.740 apiece on the ASX.
The driving force behind this increase in a2 Milk’s share price could be today’s (8 November) positive performance of the S&P/ASX 200 Consumer Staples (INDEXASX:XSJ) sector, which was up 147.6 points at 12,405.6 points (2:30 PM AEDT). Consumer Staples, being the best-performing sector on Tuesday, also kept the ASX 200 index in the green zone with a gain of 25 points.
What other factors contributed to increase in a2 Milk’s shares?
On Tuesday (8 November), the infant formula business announced the commencement of its on-market share buyback of up to NZ$150 million. According to the company's prior announcements on 29 August and 30 September 2022, a2 Milk committed to undertaking a capital return of up to NZ$150 million through an on-market share purchase. This ASX filing is in line with those earlier announcements.
Apart from this, the company also made a big announcement on 3 November 2022 stating that it had received approval from the US FDA (Food and Drug Administration) for selling its flagship infant milk formula (IMF) products in the US markets.
These two important factors may have also contributed to this increase in a2 Milk's share price.
Details of the US FDA approval on a2 Milk’s IMF
On 26 May 2022, The a2 Milk Company Limited submitted to the US FDA its request for permission to sell its IMF in the US under the enforcement discretion clause. However, as the company confirmed on 10 August 2022, the FDA deferred its consideration. a2 Milk persisted in engaging with the FDA to fulfil its requirements and have its application re-evaluated.
The US FDA granted a2 Milk’s request on 3 November for enforcement discretion and allowed the company to import, sell, and distribute the a2 Platinum® IMF product (stages 1 and 2) from New Zealand into the US through 6 January 2023. In addition to this, a2 Milk was also permitted to provide stage 3 toddler products, which are exempt from enforcement discretion.
In a statement, David Bortolussi, the managing director and CEO of a2 Milk, said:
Image Source: © 2022 Kalkine Media ®
Data Source: Company announcement dated 3 November 2022
