Last close As at 05/08/2026
NZD4.75
▲ −0.03 (−0.63%)
Market capitalisation
NZD499m
Research: Healthcare
AFT Pharmaceuticals announced FDA approval for Maxigesic IV, an intravenous form of its flagship pain relief prescription medicine. The FDA approval of the post-operative pain alternative to opioids marks a material win for AFT, given the US is the largest analgesic market (estimated at nearly $7bn) and the current US regulatory hurdles in addressing pain in light of the opioid abuse epidemic. The launch at end FY24 or early FY25 is anticipated to trigger a US$6m milestone payment from Hikma Pharmaceuticals, the US licensee for Maxigesic IV. AFT’s 65% share of this milestone has the potential to provide upside to its NZ$22–24m FY24 operating profit guidance if Maxigesic IV is launched in FY24. We note that Maxigesic IV is already registered in 43 countries and is available in 21 countries (including key markets of Germany, France and Italy). The US approval is a key addition to the AFT portfolio, providing further confidence in the company’s ability to reach its previously stated near-term rolling 12-month stretch revenue target of NZ$200m, which we anticipate to be achieved on an annual basis by FY25.
AFT Pharmaceuticals |
FDA nod for opioid alternative, upside anticipated |
Regulatory update |
Pharma and biotech |
19 October 2023 |
Share price performance
Business description
Analysts
AFT Pharmaceuticals is a research client of Edison Investment Research Limited |
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AFT Pharmaceuticals announced FDA approval for Maxigesic IV, an intravenous form of its flagship pain relief prescription medicine. The FDA approval of the post-operative pain alternative to opioids marks a material win for AFT, given the US is the largest analgesic market (estimated at nearly $7bn) and the current US regulatory hurdles in addressing pain in light of the opioid abuse epidemic. The launch at end FY24 or early FY25 is anticipated to trigger a US$6m milestone payment from Hikma Pharmaceuticals, the US licensee for Maxigesic IV. AFT’s 65% share of this milestone has the potential to provide upside to its NZ$22–24m FY24 operating profit guidance if Maxigesic IV is launched in FY24. We note that Maxigesic IV is already registered in 43 countries and is available in 21 countries (including key markets of Germany, France and Italy). The US approval is a key addition to the AFT portfolio, providing further confidence in the company’s ability to reach its previously stated near-term rolling 12-month stretch revenue target of NZ$200m, which we anticipate to be achieved on an annual basis by FY25.
Year end |
Revenue (NZ$m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
03/22 |
130.3 |
18.9 |
19.2 |
0.00 |
17.7 |
N/A |
03/23 |
156.6 |
16.7 |
11.0 |
1.10 |
30.9 |
0.3 |
03/24e |
184.0 |
21.7 |
15.2 |
1.43 |
22.4 |
0.4 |
03/25e |
214.0 |
39.2 |
27.3 |
2.64 |
12.5 |
0.8 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Following the announced FDA approval for Maxigesic IV, management expects to launch the product in the US with its partners by the end of FY24 (which ends in March) or in early FY25. The launch will trigger two near-term payments: 65% of the US$6m milestone payment from Hikma Pharmaceuticals with the commercial launch and US$2.9m in FDA regulatory fee reimbursement (expected in FY24). The US FDA approval for Maxigesic IV is AFT’s second FDA approval within a year, with the first approval of Maxigesic Rapid tablets (a rapid dissolving tablet version of Maxigesic) in March 2023; management is evaluating its market entry approach for Maxigesic Rapid tablets. We note that the US is an as yet untapped market for AFT and it is the largest analgesics market globally, valued at US$6.8bn (and estimated to grow at a CAGR of 4.9% during 2023–28). In light of the US opioid abuse epidemic, physicians have had limitations in addressing patients’ post operative pain and in our view Maxigesic IV can provide a needed alternative. The launch is anticipated to generate incremental revenues for the company and aligns with management’s Maxigesic international expansion plan.
As a reminder, Maxigesic IV (developed in collaboration with Hyloris Pharmaceuticals) is a hospital-based product. The IV formulation’s US approval was delayed because AFT had to initiate additional studies to address the FDA’s concerns related to the leachable packaging compounds. Based on a potential CY24 US launch, we believe the company’s rolling 12-month revenue stretch target of NZ$200m is achievable (we estimate in FY25), and the company could potentially record FY24 milestones if Maxigesic IV is launched in this fiscal year, potentially providing upside to FY24 operating profit guidance of NZ$22–24m.
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Research: Investment Companies
abrdn UK Smaller Companies Growth Trust (AUSC) is managed by Abby Glennie and Amanda Yeaman. The strategy of using the proprietary Matrix screening tool to search for stocks that fulfil strict quality, growth and momentum criteria has proved very successful over the long term but has been challenged since the start of 2022, as macroeconomic factors rather than company fundamentals have driven stock markets. Despite their frustrations, the managers are sticking with their tried-and-tested strategy and are highly confident that the trust will resume its record of outperformance when there is a change in the investment backdrop. This may already be underway as UK inflation is moderating, interest rates may be close to peaking and, in recent months, AUSC’s NAV performance versus the reference index looks to have stabilised.