How AFT Is Ramping Up R&D – and Funding It Internally

19 December 2023

AFT Pharmaceuticals sits at 25 in the TIN200, and is one of the top 5 healthtech companies in NZ. In November, they released their financial results for the six months to the end of September 2023, which showed continued strong growth, particularly in international markets. TIN caught up with Malcolm Tubby, CFO, to discuss their results in 2023 and their vision for 2024.

What has been AFT’s high of 2023? And what has been the low – and what did you learn from that low?

Our high has been achieving two FDA approvals for patented medicines in the USA. Our low has been the tough sharemarket conditions for biotechs and small caps globally that have seen our shareprice decline despite significant progress on multiple fronts. At the end of the day this emphasizes we just need to continue to focus on execution but also again has shown the strong benefits of being both profitable and cashflow positive, enabling progress to be maintained with internally generated cash.


New product launches have been driving organic growth for you this year – could you tell us a little about your newest products?
We have been excited to expand our Maxigesic range locally with new line extensions: Maxigesic Hot Drink sachets and Maxigesic Cold&Flu/Sinus&Pain kits, which are important to further advance our Maxigesic franchise in ANZ.


We see that your ambitions are to increase your international sales (outside Australia, NZ, and Asia) from 8% to 35%. How do you plan to achieve this ambitious goal?

In many ways our focus is on outside ANZ which includes both Asia and International. We have a well mapped-out plan to achieve this, which we note has been met with scepticism by some sharemarket analysts. However, we remain confident as we effectively have so many shots at goal. We have strengthened our operating hubs of Singapore and Hong Kong in Asia and set up am operation in UK to significantly expand our UK market. Additionally, we have significantly strengthened our R&D pipeline by taking advantage of depressed market conditions for R&D assets. We believe this offers us significant sales upside as these projects advance and can be fed into our international distributors and partners.


Your IPO in 2015 raised $33m to pursue a more aggressive (and loss-making) R&D-led growth strategy. You have returned to profitability and paid your maiden dividend in 2023. How did you achieve this?

Actually, this took a lot of work and focus but we grew sales and profitability organically to make sure that future R&D can be funded from internally generated cash. Importantly, the R&D focus continues and if anything is ramping up rather than winding down. We had also ramped up sales and promotion resources in our largest market, Australia, which took a couple of years. Overall, we delivered pretty much as planned which was very important but also pleasing.


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