Bubs Australia said on Monday it secured permanent authorisation from the US Food and Drug Administration to sell three infant formula products in the country, sending its shares up 30 per cent to their highest close since mid-February.
The stock surged as much as 45 per cent to $0.145 during the session, its strongest intraday percentage gain since late-May 2022, before closing 30 per cent higher.
The company said it secured FDA approval for Bubs Goat, Bubs 365 Day Grass Fed and Bubs Essential.
The company added that the authorisation places it among a limited number of international manufacturers permitted to supply the US infant formula market.
The firm is also evaluating an entry into the US private label infant nutrition segment, following the approval.
The approval comes amid tighter regulations and supply chain disruptions for infant nutrition companies in Australia and New Zealand.
Last month, Bubs reported an annual EBITDA loss of $1.8 million (US$1.30 million).
However, the company said it expects a stronger first half in 2027, supported by growing demand in the US, a key market in its strategy to diversify beyond China.
Meanwhile, New Zealand-based dairy firm A2 Milk said in its annual results last month that supply constraints hurt earnings, highlighting the operational and regulatory complexities facing companies in the sector.
- Reporting by Aamir Shaik Khalid in Bengaluru; Editing by Eileen Soreng, of Reuters.
