Currency in NZD
Last close As at 17/03/2023
NZD3.65
▲ 0.04 (1.11%)
Market capitalisation
NZD379m
Research: Healthcare
AFT Pharmaceuticals has presented its key CY22 highlights and strategic priorities for CY23 in a letter to investors. In addition to new product launches in its domestic markets, we expect further international market expansion following focused investments across the UK, Europe and China. Maxigesic remains the main commercial driver with plans to launch new variants internationally, including Maxigesic IV in the US, which was unexpectedly delayed due to FDA observations on product packaging. The R&D pipeline remains full, with multiple projects under development, including the NanoSURF nasal nebuliser, targeting FDA submission by the end of CY24. Importantly, despite its revised guidance in November 2022 (reflecting the investment in new launches and promotional expenses), AFT remains on track to pay a maiden dividend at the end of FY23. We will update our valuation once the full-year results are released.
AFT Pharmaceuticals |
Progressive outlook for CY23 |
Strategy update |
Pharma and biotech |
10 January 2023 |
Share price performance Business description
Analysts
AFT Pharmaceuticals is a research client of Edison Investment Research Limited |
AFT Pharmaceuticals has presented its key CY22 highlights and strategic priorities for CY23 in a letter to investors. In addition to new product launches in its domestic markets, we expect further international market expansion following focused investments across the UK, Europe and China. Maxigesic remains the main commercial driver with plans to launch new variants internationally, including Maxigesic IV in the US, which was unexpectedly delayed due to FDA observations on product packaging. The R&D pipeline remains full, with multiple projects under development, including the NanoSURF nasal nebuliser, targeting FDA submission by the end of CY24. Importantly, despite its revised guidance in November 2022 (reflecting the investment in new launches and promotional expenses), AFT remains on track to pay a maiden dividend at the end of FY23. We will update our valuation once the full-year results are released.
Year end |
Revenue (NZ$m) |
PBT* (NZ$m) |
EPS* |
DPS |
P/E |
Yield |
03/21 |
113.1 |
8.2 |
7.1 |
0.00 |
52.6 |
N/A |
03/22 |
130.3 |
18.9 |
19.2 |
0.00 |
19.4 |
N/A |
03/23e |
152.2 |
17.6 |
13.4 |
2.57 |
27.8 |
0.6 |
03/24e |
189.7 |
31.3 |
21.7 |
4.22 |
17.2 |
1.1 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Management expects growth in Australia and New Zealand to be driven by a combination of organic growth and new product launches, such as a multi-dose preservative-free glaucoma eye drop. Notably, there are 15 product launches planned in Q423, followed by 27 in FY24 and 23 in FY25. AFT plans to continue investing in enhanced sales and marketing efforts, which will tighten operating margins in the near term but should bring incremental benefits thereafter. Importantly, AFT’s maiden dividend payout (20–30% of normalised net profit) remains on track, which should help boost investor sentiment, in our opinion.
CY23 is also likely to see increased focus on AFT’s international expansion (domestic markets currently account for c 85% of sales). AFT anticipates the UK subsidiary to generate first sales in FY24. In China, it expects an enhanced e-commerce presence through its cross-border e-commerce platform, T-Mall China amid a rise in customer traffic (773,000 unique site visitors in December 2022). A new office in Hong Kong will support growth in Asia.
AFT’s flagship product Maxigesic will continue to spearhead sales efforts, with its ongoing international expansion and the launch of new variants, such as the Maxigesic cold and flu/sinus and pain treatment kit in Australia. The anticipated US approval of Maxigesic IV in CY23 should be significant for AFT. It will also focus on developing additional dose forms of Maxigesic, including Maxigesic dry stick sachets (flavoured granules) and Maxigesic Rapid (a fast-dissolving version), and the accelerated development and estimated FDA filing of NasoSURF nasal nebuliser by end-CY24, along with Pascomer’s pilot study in port wine stains and an early-stage development programme for a topical treatment of strawberry birthmarks.
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Research: Healthcare
Basilea has announced that it has received a sales-related milestone payment of CHF20m from its US licensing partner Astellas Pharma. This was triggered by sales figures achieved in the US in 2022 for Basilea’s flagship antifungal therapy, Cresemba. It has now received a total of CHF50m in sales-related milestone payments from Astellas Pharma. As part of the agreement, Basilea is set to receive additional potential sales-based milestone payments of up to CHF240m, as well as double-digit royalties on US net sales. We maintain our valuation at CHF921.7m (CHF77.8 per share); however, we will update our figures once Basilea’s year-end results are announced in February.
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