Currency in NZD
Last close As at 07/06/2023
NZD3.90
▲ 0.07 (1.83%)
Market capitalisation
NZD409m
Research: Healthcare
AFT Pharmaceuticals has announced that the US FDA has allocated a Prescription Drug User Fee Act (PDUFA) date for Maxigesic IV, an intravenous form of its flagship pain relief medicine. The PDUFA date is expected to be the last step in the FDA review process and has been set for 17 October 2023. It follows submission of additional requested data in April 2023 in response to the complete response letter (CRL) received from the FDA in July 2022 (related to queries about certain extractable and leachable compounds present in Maxigesic IV’s packaging) following the 2021 New Drug Application. The IV formulation is registered in 43 countries and has been launched in more than 19 (including the key markets of Germany, France and Italy), but the US is expected to be a key high-margin market. We note that Maxigesic IV was out-licensed to Hikma Pharmaceuticals in the US in 2021 for up to NZ$18.8m in proceeds.
AFT Pharmaceuticals |
Maxigesic IV closer to FDA approval |
Regulatory update |
Pharma and biotech |
2 May 2023 |
Share price performance Business description
Analysts
AFT Pharmaceuticals is a research client of Edison Investment Research Limited |
AFT Pharmaceuticals has announced that the US FDA has allocated a Prescription Drug User Fee Act (PDUFA) date for Maxigesic IV, an intravenous form of its flagship pain relief medicine. The PDUFA date is expected to be the last step in the FDA review process and has been set for 17 October 2023. It follows submission of additional requested data in April 2023 in response to the complete response letter (CRL) received from the FDA in July 2022 (related to queries about certain extractable and leachable compounds present in Maxigesic IV’s packaging) following the 2021 New Drug Application. The IV formulation is registered in 43 countries and has been launched in more than 19 (including the key markets of Germany, France and Italy), but the US is expected to be a key high-margin market. We note that Maxigesic IV was out-licensed to Hikma Pharmaceuticals in the US in 2021 for up to NZ$18.8m in proceeds.
Year |
Revenue |
PBT* |
EPS* |
DPS |
P/E |
Yield |
03/21 |
113.1 |
8.2 |
7.1 |
0.00 |
47.3 |
N/A |
03/22 |
130.3 |
18.9 |
19.2 |
0.00 |
17.5 |
N/A |
03/23e |
152.2 |
17.6 |
13.4 |
2.57 |
25.1 |
0.8 |
03/24e |
189.7 |
31.3 |
21.7 |
4.22 |
15.5 |
1.3 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Maxigesic, AFT’s flagship product, is a double-action analgesic (patented combination of paracetamol and ibuprofen). 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 markets (Australia and New Zealand), commercialisation activities in other geographies have been out-licensed to regional partners. The IV formulation has been licensed in more than 100 countries, approved in 43 and launched in more than 19 countries including Australia, France, Germany, Italy, Indonesia and Korea.
As a reminder, AFT had received a CRL from the US FDA for its application for Maxigesic IV in July 2022, with observation related to the leachable compounds present in the packaging of the product (the glass vial in which the medicine is stored and the vial’s stopper). In response, AFT, along with partner Hyloris Pharmaceuticals, initiated additional studies to address the FDA’s queries, generating incremental data on extractable and leachable compounds from the packaging. AFT and Hyloris submitted their response in April 2023. Setting a PDUFA date means that the FDA believes the additional data and submission represent a complete response in relation to its outstanding queries on extractables and leachables in the product packaging.
We see the above development as a step towards potential FDA approval of the IV formulation in the US, the world’s largest analgesic market valued at c US$7bn. We note that in March 2023, AFT received its first regulatory win in the US with the approval of Maxigesic Rapid, a quick-release version of its core Maxigesic product. If approved, we estimate Maxigesic IV will be launched in the US in CY24.
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Research: Healthcare
FY22 was a key inflection period for Creo with significant traction in the adoption of Speedboat Inject (its flagship electrosurgical device) and its proprietary CROMA technology platform, reflected in major robotic deals with Intuitive Surgical and CMR Surgical. Total revenue growth (8% y-o-y to £27.2m) was in line with consensus (£27m) and was primarily driven by Creo’s core technology business. Operating losses rose to £30.8m, affected by increased personnel and R&D expenses, although management expects a sharp reduction from FY23 following cost-optimisation measures implemented in H222. We expect further expansion of the Speedboat Inject user base (with an emphasis on training enrolment) to be the strategic priority in FY23. With the recent fund-raise of £33.7m (gross) in Q123, we estimate the company is funded to operational profitability in H126. Incorporating the improved cash balance post the reporting period, our valuation increases to £528m (150p/share) from £493m.
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