AFT Pharmaceuticals recently reported its FY20 results. Operating revenue grew by a strong 24.0% year-on-year to NZ$105.6m as there was at least double-digit growth across all regional segments and triple-digit growth in South-East Asia. Importantly, the company reported operating profit of NZ$21.2m (including a NZ$9.8m non-recurring gain), up from a reported NZ$6.1m the year before, and is guiding for operating profit of NZ$14–18m in FY21.
Companies: AFT Pharmaceuticals
AFT Pharmaceuticals is a New Zealand-based specialty pharmaceutical company that currently sells over 130 prescription specialty generics and OTC products through its own salesforce in New Zealand, Australia and South-East Asia. The company recently reported its H120 results. Operating revenue grew by a strong 22.1% year-on-year as there was growth across all regional segments, notably South-East Asia and Rest of World, which grew by 111.9% and 64.4%, respectively. Importantly, the company reported an operating profit of NZ$13.7m (with all regions contributing profit), up from a loss of NZ$0.1m in the first half of FY19.
AFT Pharmaceuticals has reported a North American licensing deal for Pascomer, a topical formulation of rapamycin being developed for facial angiofibromas in tuberous sclerosis complex (TSC), to private US-based Timber Pharmaceuticals. Timber will fund clinical development and provide AFT with over US$10m in upfront, development and regulatory milestones, as well as over US$10m in sales milestone payments and royalties. An Investigational New Drug Application has been approved by the FDA. The first of two 120-patient clinical studies is expected to start shortly, with results in 2020.
AFT Pharmaceuticals recently reported its FY19 results; the highlights were improving margins, as well as operating profitability for the year. Revenue grew 4.9% over 2018 while gross profit grew by 15.4% following the divestment of relatively low-margin hospital products in New Zealand and Australia. Lower SG&A and R&D spending allowed the company to report an operating profit of NZ$6.2m and the company is currently targeting an operating profit of between NZ$9m and NZ$12m for FY20.
AFT Pharmaceuticals recently reported its H119 results. Operating revenue grew 4.1% compared to H118 and was negatively affected by the divestment of relatively low margin hospital products in New Zealand and Australia. Gross profit, however, grew 24.1% as gross margins improved to 46.7% from 39.1% a year ago thanks to reduced exposure to lower-margin products as well as high growth in the higher margin over-the-counter (OTC) segment. Sales outside of New Zealand and Australia, which are primarily driven by Maxigesic, grew 72.7% and now represent 10.2% of sales compared to 6.1% in H118.
AFT Pharmaceuticals recently reported its FY18 results. Operating revenue grew 15.7% compared to FY17, approximately double the 8.1% growth seen the year before. The Australian market, which now represents over 61% of revenues at N$49.2m, was leading the way with 32.7% growth, thanks to patients switching from codeine-containing products. Revenues in New Zealand fell by 7% from NZ$29.2m to NZ$27.1m due to the company no longer being the sole supplier of Metoprolol. Maxigesic continues to do well internationally and is now launched in 10 countries.
AFT Pharma recently reported its FY17 results. Operating revenue grew 8.1% compared to FY16, mainly due to 19% growth in the Australian market, which currently comprises 53% of company revenue. New Zealand was weak due to Metoprolol issues and weak pharmacy demand. Maxigesic continues to do well internationally and is now launched in eight countries. Additionally, a licence agreement was recently announced in France, the world’s second largest market for similar products.
AFT Pharma recently made announcements affecting several of its marketed products. Importantly, the Australian Therapeutic Goods Administration (TGA) has made an interim decision that all products containing codeine (a key competitor to AFT’s Maxigesic) are to be rescheduled to prescription-only as of 1 February 2018. Also, AFT has licensed its cold/flu product Maxiclear to Angelini in 16 European countries. Additionally, due to continued Metoprolol shortages, the New Zealand government pharmaceutical buying agency, PHARMAC, has requested proposals from alternative providers, potentially affecting AFT’s sales of the product.
AFT reported H117 results on 24 November 2016, which marked a slowdown in its previously aggressive growth in preceding periods, largely due to supply issues and a slowdown in demand in New Zealand (NZ$13.5m sales). Despite this, supply issues with partners appear to be resolved, as underlying demand in Australia increased 17% (NZ$14.6m sales), and the demand for Maxigesic in Europe and the Middle East exceeds the expectations of licensing partners (NZ$1.2m sales).
AFT Pharmaceuticals is a New Zealand-based specialty pharmaceutical company that currently sells 130 prescription specialty generics and OTC products through its own salesforce in New Zealand, Australia and South-East Asia and has been expanding its geographic footprint. AFT now has agreements in 109 countries to distribute Maxigesic, its combination paracetamol (acetaminophen)/ibuprofen product. We value AFT at NZ$458m or NZ$4.73 per basic share.
AFT Pharmaceuticals is a New Zealand-based specialty pharmaceutical company that has grown its revenues at an average annual rate of 20% over the past decade. AFT raised an estimated NZ$33m in its December 2015 public offering, which it will use to accelerate new product development and move into new geographies including the EU and US. The company trades at a still relatively modest 4.2x EV/sales based on TTM revenues to September 2015.
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A number of REITs have the ability to thrive in current market conditions and thereafter. Not only do they hold assets that will remain in strong demand, but they have focus and transparency. The leases and underlying rents are structured in a manner to provide long visibility, growth and security. Hardman & Co defined an investment universe of REITs that we considered provided security and “safer harbours”. We introduced this universe with our report published in March 2019: “Secure income” REITs – Safe Harbour Available. Here, we take forward the investment case and story. We point to six REITs, in particular, where we believe the risk/reward is the most attractive.
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Laboratory Services Contracts Signed
Companies: Open Orphan
MaxCyte’s new clinical and commercial licence agreement with Apeiron Biologics allows the use of MaxCyte’s proprietary Flow Electroporation technology for manufacturing Apeiron’s gene-silencing siRNA therapy, APN401, for clinical studies. The deal is the latest in a series of clinical and commercia
Cambridge Cognition ("COG") has provided a trading update for the 6 months to 30 June and presented its growth strategy at an excellent Capital Markets Day. The Group continues to build on an impressive H1 2020, announcing additional contract wins that take the order intake to £4.9m (+88% vs H1 2019). COG is currently 'seeing unprecedented demand' for its solutions which enable pharmaceutical companies to continue clinical trials even while participants are unable to physically visit clinical trial sites.
Companies: Cambridge Cognition
Diaceutics is expected to report 20% YoY revenue growth in H1E. This strong performance against a difficult global backdrop reinforces the recession proof growth qualities of the business model. With the launch of the DXRX platform this year, we expect further operational benefits to flow through the business.
With CHF13bn ($14bn) annual sales, Roche is a dominant force in the global diagnostics market. Interestingly, in recent years, most diagnostics majors have witnessed material re-ratings – also a function of increased M&A euphoria. Now, in the backdrop of COVID-19, Roche has also emerged as a prominent player on the testing front. With big pharmas moving away from (low-growth) non-pharma offerings, is it time for Roche to consider unlocking value from Diagnostics?
Companies: Roche Holding
Today Ergomed held its annual general meeting (AGM). As expected, no new financial details were provided, although the executive chairman released a statement with a general business update. Q120 trading was good with ‘solid overall growth in revenue’ and cash generation ‘remained strong’. In Q220, Ergomed continued to grow the order book across the business and maintained its ‘revenue growth trend’. Its staff successfully adapted to remote working conditions and no employees were made redundant or furloughed. The H120 trading update will be released in July 2020 as usual, but Ergomed stated within its AGM update (June 10) that it is confident the results will be ‘in line with current market expectations’.
ReNeuron has released further follow-up data from the ongoing human retinal progenitor cell (hRPC) trial, which shows a robust sustained averaged response. This data set completes the six-month data on eight patients and extends, for one individual, to 18 months, who showed a good net gain. The next dose level, two million cells in nine patients, remains delayed due to COVID-19. A filing to start a pivotal study is expected in the second half of CY21. Our indicative value remains at £107m.
Companies: Reneuron Group
RenalytixAI (RENX.L): Proposed dual-listing on Nasdaq | e-therapeutics (ETX.L): Covid-19 project update | RedX (REDX.L): Appointment of Non-Executive Director
Companies: RENX ETX REDX
Inspiration Healthcare has announced its intention to acquire SLE Limited (SLE), a leading neonatal ventilator designer and manufacturer for consideration of £18.0m. Inspiration Healthcare has conditionally raised £16.5m (gross, ahead of an open offer) via an oversubscribed equity placing to support the acquisition. We believe the acquisition represents a transformation deal, virtually doubling the size of the business and providing significant new revenue growth opportunities. We expect the acquisition, on a 12-month proforma basis to be accretive to adjusted earnings in the near-term and increasingly so in the medium-term. We reiterate our Buy recommendation.
Companies: Inspiration Healthcare Group
Hutchison China MediTech (HCM) is on the brink of global launches of two assets from its internally developed oncology portfolio. In 2022 we expect US launches of surufatinib (broad NET indication) two years earlier than forecast as well as savolitinib (NSCLC). Recently the FDA granted fast-track designation to fruquintinib in mCRC and we forecast global launch in 2023. In China, HCM has laid the foundations to capitalise on the slew of additional novel oncology drugs (expected by end 2021). HCM is well funded (following the recent $100m equity investment from General Atlantic, plus warrants granted for an additional $100m in 18 months) as it accelerates the global development of its unpartnered assets and expands its global commercial outreach. Beyond 2024 we expect sustainable profitability and margin expansion. Our increased valuation is $6.3bn.
Companies: Hutchison China Meditech
Hutchison China MediTech (HCM) is on the brink of global launches of two assets from its internally developed oncology portfolio. In 2022 we expect US launches of surufatinib (broad NET indication) two years earlier than forecast as well as savolitinib (NSCLC). Recently the FDA granted fast-track designation to fruquintinib in mCRC and we forecast global launch in 2023. In China, HCM has laid the foundations to capitalize on the slew of additional novel oncology drugs (expected by end 2021). HCM is well funded (following the recent $100m equity investment from General Atlantic, plus warrants granted for an additional $100m in 18 months) as it accelerates the global development of its unpartnered assets and expands its global commercial outreach. Beyond 2024 we expect sustainable profitability and margin expansion. Our increased valuation is $6.3bn.
Collagen Solutions (COS.L): Supply agreement with NovaBone
Companies: Collagen Solutions
Much has been written about the effects of the virus on the world and on the stock market. Here is one analyst’s take on some of the likely impacts on the way we should look at companies. This article was originally produced as a blog, “10 Changes Post Virus”, which was published a few weeks ago.
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Diaceutics is launching a cloud based diagnostics commercialisation platform for the precision medicine market that will bring significant functional gains to customers and create meaningful internal efficiencies. The company has raised £20.5m gross in an equity Placing of new ordinary shares to fund the ongoing development of both the business and the new platform.