AFT launches $33.2m IPO

Takapuna-based drugmaker AFT Pharmaceuticals kicks off a $33.2 million initial public share offer today as the family-owned company aims for an NZX listing before Christmas.

The IPO will price AFT shares at $2.80, giving the company an indicative market capitalisation of $269m.

Founders Dr Hartley Atkinson and his wife Marree Atkinson will retain a 76% stake in AFT after the offer is complete.

Of the money raised, $3m will go to the Atkinsons and $30.2m will fund growth initiatives at the company.

Dr Atkinson said the float aimed to take the company to the next level.

“We’ve built up strong sales figures in our home markets of Australia and New Zealand over a number of years. Historically we’ve funded this growth through operating cash flow,” he said.

“But the opportunities to sell our existing products like Maxigesic to new international markets, and to advance our pipeline products like the Surf Nebuliser are tremendous. This raise is about making sure we have additional capital available to make the most of the opportunities we’ve created for ourselves as a company.”

AFT’s Maxigesic product is a non-prescription painkiller containing Ibuprofen and Paracetamol.

The company markets more than 100 pharmaceutical products for retail, prescription and hospital use. The range includes proprietary products developed in-house or licensed from other companies and sold under AFT’s own brand.

The drugs are made by third-party manufacturers.

Chairman David Flacks said several institutional investors had taken part in the IPO bookbuild and existing shareholders had been strongly supportive.

AFT’s other shareholders include US healthcare investor CRG on 9% and New Zealand fund manager Milford Asset Management on 3%.

The share offer opens today and closes on December 17. Investors interested in acquiring shares should contact a sharebroker. The lead manager of the offer is First NZ Capital.

Listing on the NZX and ASX is due on December 22.

In the year to March 31, AFT had revenue of $56.4m and a net loss of $12.9m.

Cashflow from operations was negative $13.1m and net assets were $12.5m.

AFT attributed the losses to research and development expenses as well as higher marketing expenditure to build sales in Australia and Asia.

AFT said its prospectus did not include estimates of its future financial performance because the outcome could be materially difference from forecast.

“The board believes that it is not practicable to formulate reasonable assumptions on

which to base prospective financial statements,” the prospectus said.

Difficulties included the timing of regulatory approvals in overseas markets, estimating sales from new markets and distribution partners and the unpredictability of clinical trials for new products.

In the first half of this year AFT had revenue of $29.5m and a net loss of $6.4m.

RAW DATA: AFT Pharmaceuticals prospectus (PDF here)

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