Monday, September 26

NZ’s a2 Milk says FDA deferred request to supply baby formula, shares slide


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A2 Milk Company Ltd said on Wednesday the US Food and Drug Administration had deferred the dairy producer’s request to import infant milk formula products into the United States, sending its shares down over 9%.

Earlier this month, a2 dismissed a report suggesting that it was close to winning approval to sell baby formula in the United States, adding that the application was still under active review.

“At this time, the FDA is deferring further consideration of the company’s request for enforcement discretion to import infant milk formula products into the US,” a2 said.

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Shares of a2 tumbled 9.4% to NZ$5.1, recording their biggest single-day drop since October.

The regulator had said previously it would allow formula sold in other countries into the United States under a temporary program with relaxed standards. The US government has also flown in formula from overseas plants.

The FDA has exercised its “enforcement discretion” provision to import certain infant formula products from Bubs Australia Ltd, UK-based Kendamil, Nestle SA and Danone SA.

However, companies like a2, local rival Fonterra, Swiss firm Holle and US-based Nature’s One are yet to receive the go-ahead.

The FDA has to use extreme caution with formula standards as impurities or substandard nutrition could cause permanent disability or death in babies.

A2 said it was informed by the US-based trade group International Dairy Foods Association that pending discretion enforcement applicants have also received similar communication from the FDA, indicating that the regulator is deferring any further review of applications at this time.

The FDA did not immediately respond to a Reuters request for comment. (Reporting by Harish Sridharan in Bengaluru; Additional reporting by Upasana Singh; Editing by Maju Samuel)



financialpost.com