Phibro Animal Health Corporation announced that Brazil’s Ministry of Agriculture and Livestock has issued Ordinance No. 1617, which bans the importation, manufacture, marketing and use of performance‑enhancing feed additives that contain antimicrobials for growth promotion. The ordinance, issued on April 27, 2026, will take effect after a 180‑day transition period, meaning the ban becomes enforceable in late October 2026.
The ban targets feed additives that use antimicrobials for growth promotion, a category that includes several of Phibro’s products sold in Brazil, notably virginiamycin and bacitracin. These products have been a significant portion of the company’s Animal Health revenue in the country, and the prohibition removes a key revenue stream for the business in one of its largest international markets.
Phibro is actively mitigating the impact by pursuing new registrations for virginiamycin for therapeutic use in cattle and broiler chickens, while bacitracin already holds therapeutic claims. The company has also launched its PhibroVet digital prescription platform to support the transition to a veterinary prescription model for these antimicrobials, positioning itself to maintain sales under the new regulatory framework.
In its Q2 FY2026 earnings, Phibro reported net sales that rose 26% and adjusted EBITDA that increased 41%, driven by strong performance in the Animal Health segment. The segment’s adjusted EBITDA margin expanded to 28.3%, up 290 basis points from the prior year, reflecting a favorable mix and pricing power. Management indicated that the regulatory change would have a limited impact on FY2026 results because of the 180‑day transition period and has raised its full‑year guidance to net sales of $1.45 billion to $1.5 billion and adjusted EBITDA of $245 million to $255 million.
Investors reacted positively to the Q2 earnings, citing the robust growth and the company’s proactive strategy to address the regulatory change. Analysts raised their EPS estimate for FY2026 to $2.99, reflecting confidence in Phibro’s ability to navigate the new environment.
Brazil has a history of restricting antimicrobial growth promoters, having banned tylosin, tiamulin and lincomycin for swine production in February 2020. The current ordinance aligns with a global trend of tightening antimicrobial use in livestock, exemplified by the European Union’s 2006 ban on antibiotics for growth promotion.
The ban represents a significant regulatory hurdle, but Phibro’s swift response—therapeutic re‑registration, digital prescription infrastructure and a strong financial footing—suggests the company is well positioned to adapt and sustain its market presence in Brazil while maintaining overall growth momentum.
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