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Currency in NZD
Last close As at 09/06/2023
NZD3.74
▲ −0.16 (−4.10%)
Market capitalisation
NZD392m
Research: Healthcare
AFT Pharmaceuticals announced that, along with partner Hyloris Pharmaceuticals, the company will initiate additional studies to address the FDA queries (raised in July 2022) related to Maxigesic IV’s packaging. The new studies, which aim to generate incremental data on extractable and leachable compounds from the packaging, are expected to commence before end-CY22 with targeted completion by CY23. The company will file for FDA registration after submitting its response. Maxigesic IV has already launched in 10 countries and was out-licensed to Hikma Pharmaceuticals in the United States in April 2021 for up to NZ$18.8m in total proceeds. We anticipate the incremental launches (including 20 launches planned in Australia) in the second half of the year will offset this delay and we maintain our estimates.
AFT Pharmaceuticals |
Further studies for Maxigesic IV’s US nod |
Regulatory update |
Pharma and biotech |
7 September 2022 |
Share price performance
Business description
Analysts
AFT Pharmaceuticals is a research client of Edison Investment Research Limited |
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AFT Pharmaceuticals announced that, along with partner Hyloris Pharmaceuticals, the company will initiate additional studies to address the FDA queries (raised in July 2022) related to Maxigesic IV’s packaging. The new studies, which aim to generate incremental data on extractable and leachable compounds from the packaging, are expected to commence before end-CY22 with targeted completion by CY23. The company will file for FDA registration after submitting its response. Maxigesic IV has already launched in 10 countries and was out-licensed to Hikma Pharmaceuticals in the United States in April 2021 for up to NZ$18.8m in total proceeds. We anticipate the incremental launches (including 20 launches planned in Australia) in the second half of the year will offset this delay and we maintain our estimates.
Year end |
Revenue (NZ$m) |
PBT* (NZ$m) |
EPS* |
DPS |
P/E |
Yield |
03/21 |
113.1 |
8.2 |
7.1 |
0.00 |
49.3 |
N/A |
03/22 |
130.3 |
18.9 |
19.2 |
0.00 |
18.2 |
N/A |
03/23e |
155.9 |
27.0 |
20.4 |
4.04 |
17.2 |
1.2 |
03/24e |
194.2 |
43.5 |
30.0 |
5.94 |
11.7 |
1.7 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
AFT and its development partner Hyloris Pharmaceuticals will be initiating additional studies to generate the required data to address the FDA’s queries related to Maxigesic IV’s packaging. AFT had received a complete response letter from the FDA on 1 July 2022 regarding its application for Maxigesic IV, an intravenous form of its flagship pain relief medicine. Hyloris Pharmaceuticals communicated that the FDA had not highlighted any issues related to clinical data but rather focused on the leachable compounds present in the drug product, based on the packaging (please refer to our previous note for more details).
The studies are likely to be initiated before end-CY22 and will focus on generating additional data on extractable and leachable compounds from the packaging. AFT expects the study to complete next year and plans to file for FDA registration, post submission. As a result, we expect some delay in product launch from the previously planned timeline of end-CY22.
Maxigesic is a double-action analgesic (patented combination of paracetamol and ibuprofen) and is AFT’s core product offering. The IV version uses a double strength formulation of the oral version (1000mg paracetamol and 300mg ibuprofen) and targets hospitals for the treatment of patients with post-operative pain. While AFT is self-commercialising Maxigesic IV in its domestic Australia and New Zealand markets, commercialisation activities in other geographies have been out-licensed to regional partners. The IV formulation has been approved in 41 countries and launched in 10 countries including Australia, France, Germany, Indonesia and Korea. In the United States, Maxigesic IV was out-licensed to Hikma in April 2021 for up to NZ$18.8m in upfront and milestone payments as well as royalties on sales (of which NZ$3.6m was received in H122).
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Research: Investment Companies
Ocean Wilsons (OCN) reported a H122 loss of $34.7m (H121 profit of $39.5m), chiefly due to weak financial markets which led OCN’s international investment portfolio (OWIL) to report a $48.9m loss. Despite headwinds in the container terminal business, some good operating trends allowed Wilson Sons (PORT3) to boost OCN’s H122 revenue by 12% y-o-y and EBITDA by 2%. We are cutting our forecasts for FY22e (to a $14.8m net loss) and FY23e (22% EPS reduction). OCN is trading at 50% of the look-through value of its 56.5% PORT3 stake and OWIL portfolio. This discount seems excessive, especially as PORT3’s market valuation is undemanding. To further highlight this valuation gap, we have introduced a valuation range for PORT3; at the mid-point of the range OCN’s discount increases to 59%. OCN has a 6.8% dividend yield.
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