AFT posts loss that meets estimates in maiden result as Australian sales overtake NZ

AFT Pharmaceuticals [NZX: AFT], the Auckland-based drug developer, posted a $8.9 million operating loss for the year to March 31, its first result since listing on the NZX and ASX last December, and in line with analyst expectations.

Total revenue rose 14 percent to $64 million, in part reflecting ongoing fast sales growth in the Australian market of its flagship ibuprofen-paracetamol painkiller, Maxigesic. Australian sales rose 19 percent to $31.2 million while New Zealand revenue rose 5.8 percent to $31.1 million.

Total sales in South East Asia and the rest of the world totalled $1.7 million, but showed exponential growth and the company reported Maxigesic is now licenced for sale in 98 countries, is moving from behind-the-counter to on-the-shelf sales in Australia meaning it can also be advertised, and that first licencing income was booked from Italy, while the product is due for launch in Singapore next month and in Britain and Eastern Europe "soon".

AFT is also undertaking clinical trials of an oral dose Maxigesic product in seven countries, its Maxigesic IV product in New Zealand and the US, and plans to launch clinical studies of its NasoSURF nebuliser for treatment of sinus conditions later this year. The company regards the sinusitis treatment device as a larger opportunity in the long term than Maxigesic, which is driving growth at present.

No financial forecasts were given at the time of last year's listing at an issue price of $2.80, but First NZ Capital initiated coverage of the stock in February, rating it 'outperform' with a target price of $3.25 and predicting an annual adjusted earnings loss of $8.7 million. The company reported a 1 percentage point reduction in average gross margin to 37 percent.

AFT shares closed yesterday on the NZX at $3.02.

The company raised $35.6 million going public and said it had $28.1 million in cash available at balance date, after spending $8.4 million during the year on research and development - a 46 percent increase.

Listing costs of $2.6 million and much-reduced finance costs of $2 million, down from $7.2 million in the previous year, produced a total loss after tax of $13.3 million, from $12.9 million the previous year.

AFT was expected to make a loss in the current financial year, said founder chief executive Hartley Atkinson, "due to significant investment in accelerating clinical studies for key innovative products."

That programme was scheduled to be "substantially completed" during the current and next financial year, "after which we are targeting a return to positive earnings before tax, interest, depreciation and amortisation."

(BusinessDesk)