AFT Pharmaceutical, maker of painkiller Maxigesic, expects to keep growing this year, particularly if major market Australia can avoid Covid-19 complications.
Revenue was higher than forecast despite a difficult year as the company continued to sign deals on, and develop, its portfolio of drugs while the pandemic took hold.
Were OK with the result, said chief executive Hartley Atkinson.
To be frank it was a pretty tough operating environment with the pandemic, which seemed to persist, but our team did a good job.
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Sales grew from $105 million the previous year to $113m, compared with April guidance of $111m. Underlying operating profit of $10.7m was near the upper end of a downgraded forecast of between $9m and $11m. Excluding a one-off gain, operating profit in the previous year was $11.4m.
The company expected operating profit this year between $18m and $23m.
However, investors will have to wait for a dividend as AFT first wanted to reduce its net debt to between $25m and $30m. Net debt fell to $35.2m from $37.1m during the year.
AFT signed a number of deals remotely during the year, which was challenge, Atkinson said.
In April, after the reporting period, AFT signed a deal with United Kingdom-based Hikma Pharmaceuticals for the commercialisation of its intravenous, opioid-free Maxigesic IV post-operative pain relief medicine in the United States.
Most of AFTs business was in Australia, so the trans-Tasman travel bubble was a big plus, Atkinson said.
Certainly we get a lot of growth in Australia. So as long as nothing major happens, we feel that we should really be able to keep on rolling out and actually increase our growth from what it was in this last year, which has been quite a challenge.
Further afield were seeing things easing in Europe and in the US and for North America, which are some of our larger new markets.
The company was doing a clinical study around the world including Taiwan, which was one of the leading countries in managing the pandemic but has recently seen a growing outbreak.
Even during the pandemic we finished a big study in the US which was pretty challenging, but we managed to do it, and 225 patients on Maxigesic IV was completed just as the pandemic was really biting about a year ago, Atkinson said.
Generally probably people have looked more at a product like Maxigesic, but we do actually have quite a wide R&D pipeline and thats what weve been working pretty hard on at the moment.
AFT floated on the New Zealand and Australian stock exchanges in December 2015, in order to raise capital to fund a big chunk of the companys R&D.
The company was now able to either fund its own research and development internally or do deals that covered R&D costs, putting it in a powerful position, he said.
The company worked hard to develop a good team, including training young people just after they finished their studies.
You often see a lot of business people are talking about importing people, and the borders. We’ve used a different approach, weve literally hired people straight out of university, and we work really hard to train them.
Wed much rather do that where then they have the culture of our company and stuff like that, rather than bring someone from the other side of the world.
Atkinson had no regrets about listing the company, which started with $50,000 in the back of the familys Auckland garage in 1997 after he was made redundant from global healthcare giant Roche.
I think in hindsight the obvious thing is the additional public scrutiny where if youre a private company you can just keep quiet and do things, so were a bit careful we don’t disclose too much information because its a very competitive industry.
But I think its worked very well for us in terms of weve got a good spread of investors, weve been able to raise a little bit of additional capital – we havent actually had to raise very much, but just being able to do thats really important.
Weve been able to have long-term share options and things like that, which I thinks really good for our staff too.
Shares in AFT were down 1 per cent at $4.65 in early afternoon trading.
