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.
Revenue in Australia was up 19% in FY17 compared to FY16, thanks in large part to Maxigesic sales doubling as well as successful launches of Crystaderm and Restoranail. Growth is expected to continue to be robust as patients switch from codeine containing products (which will no longer be available over the counter after 1 February 2018 due to re-scheduling) to Maxigesic.
Maxigesic is currently sold and launched in eight countries and distribution agreements are in place in a total of 112, including a recent licence deal in France, which has a US$900m market for paracetamol/acetaminophen and ibuprofen tablets (the second largest in the world, behind the US). AFT is targeting between 30-40 launches for Maxigesic in FY18.
The FDA has accepted the application for registration for the oral version of Maxigesic and a decision is pending (likely in CY18). AFT is currently completing a 275-patient pivotal study for Maxigesic IV (filing expected in CY17) and recently completed a 200-patient study for Maxigesic Oral Liquid. A 275-patient pivotal study of Maxiclear PE is expected to complete this calendar year as well. NasoSURF is now in distribution and human factor studies with pharmacokinetic and clinical studies are expected to begin in FY18.
We are adjusting our valuation from NZ$461m or NZ$4.76 per share to NZ$461m or NZ$4.75 per share. We have reduced our FY18 and FY19 revenue projections by NZ$1.4m and NZ$2.0m, respectively, but the effect of this reduction is offset by advancing our NPVs to the most recent period. We expect to update our valuation following additional information regarding the status of Maxigesic launches as well as results of clinical trials.