AFT Pharmaceuticals on track to return to profitability

AFT Pharmaceuticals, manufacturer of the Maxigesic painkiller, significantly shrunk its first half loss to $0.1million from $6.7 million in the prior period, saying it remains on track to return to profitability in this financial year.

The company says the small Operating Loss in the six months to September 30 2018 is positive progress and it expects the second half of the financial year to generate greater revenues and profitability.

The improvement in operating loss came from strong growth in Gross Profit (up 24% to $17.8 million) and reduced Research and Development costs, as clinical trial programmes identified at the time of AFT’s 2015 IPO are concluding. Research and Development investment reduced to $2.2 million, from $5.0 million in the previous corresponding six month period.

Completion of Research and Development programmes allows AFT to commence regulatory filings for new Maxigesic products which will support future revenue growth — an intravenous version for hospital use and an oral liquid for use in children. Additional Maxigesic dose forms, hot drink sachets and dry stick sachets, are also in development and regulatory filings for these are expected to commence in 2019.

AFT’s Total Income in the first half of FY19 was $40.2 million, up 7% from $37.4 million in the prior period. This was largely driven by continued growth in the Australian and Rest of World markets.

Maxigesic sales in Australia in the six months to September 30 doubled versus the prior period, after an Australian regulatory change restricted codeine-based painkillers to prescription-only from February 2018. Maxigesic is a codeine-free painkiller containing ibuprofen and paracetamol.

AFT founder and Chief Executive Hartley Atkinson said: “Maxigesic has obtained a market leadership position in Australia for paracetamol-ibuprofen combinations. We see the opportunity of significant ongoing organic growth from Maxigesic tablets and additional dose forms such as Maxigesic IV and Maxigesic Oral Liquid, which are planned to be launched in the next 12-18 months.”

Revenue growth in the six month period also came in the Rest of World market, up 70% on the prior period to $2.8 million, and Southeast Asia, up 81% on the prior period to $1.1 million. New Zealand revenue declined, down 11% to 12.6 million, however sales of higher margin products saw a 23% increase in its Gross Profit.

Maxigesic is now being sold in 15 countries and is licensed in 128, up from 125 in the 2018 financial year. The company says the timing of sales in different parts of the world remains difficult to determine due to the multitude of countries and different regulatory requirements, however estimates from licensees continue to indicate that sales will increase significantly over the next few years, with new launches, growth in already launched markets, and new line extensions.