AFT Pharmaceuticals affirms it is on track to break even within two years

Friday 5th August 2016

Drug developer AFT Pharmaceuticals still expects to break even in the 2018 or 2019 financial year, although it cannot be sure exactly when, founder and managing director Harley Atkinson told shareholders at the company's first annual meeting since dual-listing on the NZX and ASX last December.

"FY18 still looks close," said Atkinson. "We might make a small loss or we might break even next year."

The company reported an $8.9 million loss, in line with its prospectus, for the year to March 31, but is giving no guidance for the current financial year or beyond, citing the lack of certainty about the timing of approvals to introduce its best-developed product, the Maxigesic analgesic, into a wider range of markets and in different dose forms.

The company faced criticism from veteran investor Brian Gaynor, principal at Milford Asset Management, when Atkinson gave no financial information in his presentation to shareholders, concentrating only on progress with access to markets for Maxigesic and its Crystaderm first aid cream, and its next most promising product, a new generation nebuliser for use by chronic sinusitis sufferers.

"It's important at shareholders' meetings to make mention of the financial performance, however you decide to do it, rather than just the products," said Gaynor.

Atkinson said the company was confident the $28.1 million in cash on its balance sheet at March 31 would be sufficient to meet its stated product development and rollout plans in the time it took for the company to return to profitability. It was consistently profitable as a private entity before raising $35.6 million in new capital to pursue a global expansion strategy.

Maxigesic is now licenced in 109 countries, ahead of target, although it remains for sale in only five and 97.4 percent of sales are in New Zealand and Australia, with the latter market slightly larger than New Zealand for the first time in the last financial year.

One shareholder also criticised the lack of liquidity in AFT shares, with Atkinson and his wife and fellow director Maree, holding 76 percent of the company. While some 15 percent of the company's shares held in escrow on the Atkinson's behalf are now in the free float, Atkinson told shareholders after the meeting that he would continue to hold rather than sell, given his confidence in the company's future performance.

Chairman David Flacks acknowledged to the meeting that while there were some 1,000 AFT shareholders, liquidity was low and "that's just the way it is".

AFT shares listed at $2.80 and last traded at $3.15.

BusinessDesk.co.nz

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