AFT Pharmaceuticals continues to be one of New Zealand’s most successful Healthtech companies with a revenue of $113,100m in 2021. Despite a challenging year, the company managed to hold on to rank 24 in the TIN200 (New Zealand's top 200 tech exporters), launched a range of new products and continues to build its presence across various territories like Europe and South America through new licensing agreements.
AFT Pharmaceuticals sells 130 proprietary branded and generic products through its own sales force in New Zealand and Australia, with offices in Southeast Asia and Europe to handle its growing export business.
In July 2022, following registration under China’s Cross Border E-Commerce OTC, the company has expanded its product range availability in China, an encouraging development for AFT’s sales in Asia.
We caught up with Hartley Atkinson, CEO and Founder of AFT Pharmaceuticals, to find out more about their recent experiences with supply chain challenges, new product launches and expanding their reach across the globe.
You mentioned in the 2021 TIN Report that the best business decision of 2021 was “increasing stock holdings ahead of logistics interruptions”. This is very similar to what you mentioned in 2020.
Other than increasing stock holdings, what opportunities do you see to ease the pressure on supply chain that you as a business or the government could leverage?
Presently there still seems to be ongoing supply chain issues and interruptions. Consequently, AFT is maintaining its elevated stock holding which in some cases has offered opportunities as competitors have struggled with out of stocks which we have been able to take advantage of.
Certainly, a key point remains being able to leverage trans-Tasman stockholdings with harmonised stock. Our HQ also holds a packing license which is important in that stock can be reworked. This flexibility has assisted to minimise stock problems.
You successfully launched Ocuzo, preservative-free antibacterial eye drops, early in 2022 and completed a range of successful new licensing agreements in Europe (Pascomer, March 2021) and South America (Maxigesic® IV).
How has launching a new product and entering new international licensing agreements changed over the past two years with COVID?
This has actually been surprising in a positive sense. Since we were locked down, we attended a number of events virtually that we had not attended before and as a result of this, and a focused approach to in-licensing, we have significantly grown our product pipeline over the last 2 pandemic years. We are literally launching 24 new products into the Australian market between July 2022 and 31 March 2023 and some 78 products over the next 3 years which primarily resulted from ramping up our in-licensing during lockdowns.
You established AFT operations in Europe, based out of Ireland, and in Asia, out of Hong Kong, in 2021 to meet demand for your growing export business.
What are the benefits and challenges you have experienced so far between having AFT operations ‘on the ground’ in those markets versus having a licensing partner?
An immediately useful feature was having staff in-market straight away as two staff were keen to relocate to Europe for personal reasons. Amusingly, a business journal reported this with the headline ‘Pharma Boss sends staff overseas on one way trip’ but it certainly proved useful whilst we remained in extended lockdown.
Certainly, in some territories we are starting to take the position of having some in-market presence and use a contract sales team as opposed to a licensee or distributor. Our 5-year plan shows that our major export markets still seem to be Europe and potentially China so both of these locations make sense based upon our planning work.
AFT Pharmaceuticals is a publicly listed company – on both the ASX and the NZX. What are the benefits of a dual listing in your opinion?
Although most of our shareholders reside in New Zealand, we do still have a reasonable number of Australian shareholders and we certainly notice that they also include our pharmacy customers in Australia who enjoy engaging with us at Australian trade shows. We still also believe that a dual listing offers us flexibility for the future.
Tellingly, we [Hartley and Maree Atkinson] have maintained a significant shareholding of around 70% and key management and directors have increased their shareholdings, all of which are important votes of confidence in the company.
Overall, we are growing our Australasian business which will continue in the foreseeable future and our international business is only just starting to get traction. We have also significantly ramped up our R&D portfolio which has significant potential and in general is not really factored into our present share valuations. A key factor in being able to do this, is by virtue of being profitable and having strong cashflows which have enabled ramping up R&D partnerships that may not have been available during good economic times.
Click here to learn more about AFT Pharmaceuticals.
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