For four years Bubs (ASX:BUB) Australia has sold infant formula in the United States on borrowed time. Its access rested on emergency measures introduced during America's 2022 formula shortage. On Monday the Australian goat milk formula maker told the market it had crossed the line that matters: permanent regulatory authorisation from the US Food and Drug Administration. For a company that now earns most of its Revenue in America, it is the most consequential regulatory milestone in its history.

The latest development

Bubs said it had received permanent authorisation from the FDA covering its Goat, 365 Day Grass Fed and Essential infant formula products, after satisfying US safety, nutrition and quality standards. The approval places it among a limited group of non-American manufacturers holding permanent access in a heavily regulated category.

The approval follows a New Infant Formula Submission lodged in June 2025, which the company said rested on a clinical trial enrolling 478 infants over 16 months. At its FY2026 result the company described the process as at final review stage, flagging completion in the first half of FY2027.

What investors may watch next

The near-term test is gross margin. Management has guided to a rebound in FY2027 as air freight, Tariff and regulatory reset costs unwind, without providing a numeric revenue or Earnings range.

Investors will also watch whether permanent approval translates into new retailer wins or expanded ranging, whether the China Business can return to growth after a flat year, and how the Balance Sheet is managed given a modest cash position.

Conclusion

Bubs has secured the regulatory foundation it has pursued since 2022, and in a category where regulatory access is the barrier to entry, that is genuinely valuable. The next phase will be judged on commercial execution: whether margins recover as promised, and whether the company can fund growth without straining a thin balance sheet.