AFT PHARMACEUTICALS2018 Bioshares Summit PresentationJuly 2018Queenstown, New Zealand
Bioshares PresentationJuly 2018
IMPORTANT NOTICE
This presentation has been prepared by AFT Pharmaceuticals Limited (“AFT”), to provide a general overview of AFT. It is not prepared for any other purpose and must not be provided to any person other than the intended recipient.
All amounts are disclosed in New Zealand dollars (NZ$) unless otherwise indicated. All references to FY20XX appearing in this presentation are to the financial year ending 31 March, unless otherwise indicated.
This presentation is not a recommendation or other form of financial advice. While reasonable care has been taken in compiling this presentation, none of AFT nor its subsidiaries, directors, employees, agents or advisers (to the maximum extent permitted by law) gives any warranty or representation (express or implied) of the accuracy, completeness or reliability of the information contained in it nor takes any responsibility for it. The information in this presentation has not been and will not be independently verified or audited.
This presentation may contain certain forward-looking statements and comments about future events, including with respect to the financial condition, results, operations and business of AFT. These statements are based on management’s current expectations and the actual events or results may differ materially and adversely from these expectations. Recipients are cautioned not to place undue reliance on forward-looking statements.
Past performance information given in this presentation is given for illustrative purposes only and should not be relied upon (and is not) an indication of future performance.
Bioshares PresentationJuly 2018
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Start Up – Company Formation and Key Elements
3 Sep 1997
Wanted to start “my own company” well before “too old” i.e. 40 years of agePlans hastened by redundancy aged 37Had reasonable experience base BUT knew very little
$50KStart up capital – under-capitalizedSupplemented income for first 3 years with consulting workWas NOT easy
CashflowBusiness was always run off a cashflow sheetCreative financing was important – trade financingAvoided advice like “sell your house and put in the business”
Partnerships Sought business partnerships early e.g. South AfricaContracted out as much as possible BUT not Sales & Marketing or Clinical Trials
StrategyFlexible and developed as we progressedKey was AU expansion in 2004 & starting drug development in 2004 Taking on outside shareholders in 2014
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Some Timelines
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• Formed Company in September 1997
• First Sales in August 1998
• Started Maxigesic development 2004
• Filed first patents 2004
• Moved out of our Takapuna garage 2004
• Expanded to AU 2005
• First major Out-licensing deal in EU 2012
• Expanded to MY, SG 2014
• First NZ company to register a patented pharmaceutical in EU in 2014
• First Capital Raise 2014 [CRG and Milford Asset Management]
• IPO on NZX and ASX Dec 2015 after investigating a Nasdaq listing
Home Based Office
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• Sold circa $8M from our home office
Family Company
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• Relied very much on family for many years – Pharmacy Tradeshow in Fiji 2011 Greencross Conference
Finance Along the Way
VC’s
Buy-out About 3 unsolicited offers per annum over last 10 yearsRan partnerships without selling out holding company
Bankers
Worked on about 20% EquityWorked with bank
– kept them close- changed budgets and plans
GFC was quite challenging
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Australia PE example
New Zealand PE example
USA Choice – debt and equity facility
Finally Floating
Nasdaq
NZX-ASX Listed 22 December 2015 on NZX & ASX
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Spent 3 months working on failed Nasdaq attemptNot enough USA focus in our business
Financials of Floating
Numbers
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Raised NZ$32.6MSold NZ$3M at floating
Management & Board
Boards Advisory board since 2007Audited since 2007Formal board since 2012Diverse experience is important
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CURRENT HIGHLIGHTS
125 countries that Maxigesic is licensed in – up from 110 at the end of FY2017
13 countries that Maxigesic is launched and sold in
7 number of clinical studies AFT will have running in FY2019
$81.9m total income for FY2018*
$6.8m available cash as at 31 March 2018
* Total income comprises Operating Revenue of $80.1m and Licensing Income of $1.8m
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ADVANCED CLINICAL STUDY PROGRAM
• 7 studies across the AFT portfolio and 900+ patients
• 7 countries - Australia, Jordan, Mexico, New Zealand, Russia, United Kingdom, United States
• Significant Clinical Trials for Maxigesic oral and IV dose forms are mainly completed
• Completed Maxigesic IV pivotal study in USA [275 patients]
• Completed Maxigesic Oral Liquid study in AU, NZ & MX [200 patients]
• NasoSURF Device Clinical Studies well underway
• Human Factor Study in USA completed
• 3 Distribution studies underway in AU & NZ [over 50 patients]
• PK-PD study in NZ [30 patients]
• To start large clinical study for first indication in NZ & USA [300 patients]
• Maxiclear PE pivotal study completed in NZ during 2017 [275 patients]
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EXAMPLE OF MAXIGESIC LICENCEE PROGRESS TO DATE – tablet sales per month
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-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
Middle East: Great Local Distributors: UAE
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-
10
20
30
40
50
60
70
80
90
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
Opera
ting r
evenue (
NZ$m
)
FINANCIAL PERFORMANCE – REVENUE GROWTH
10 year CAGR: 14%
Operating revenue, FY2005 – FY2018
FY2017 Operating revenue by region FY2018 Operating revenue by region
Bioshares Presentation
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Australia53.6%
New Zealand42.1%
Rest of World2.8%
Southeast Asia1.5%
Australia61.4%
New Zealand33.8%
Rest of World3.1%
Southeast Asia1.6%
MAXIGESIC GLOBAL UPDATE
Australia – sales growing strongly post codeine rescheduling.
No #1 Para-Ibu Combo
New Zealand – increasing sales and codeine
rescheduling confirmed.Maxigesic PE launched
Singapore/Brunei – launched including OTC
Malaysia – launched
UAE – sales growth still strong
Iraq launch underway
Italy – successful launch and sales growing still
Eastern Europe and Balkans –launches pending 2018Nordics – launch pending 4Q 2018
BE/LX & FR– launches pending 4Q18
UK – launched
IE – launch pending
ES/PT – launch pending 4Q 18
CACM – launch underway
MX – launch pending 4Q 18
Licensing negotiations underway Brazil and LATAM
Licensing discussions starting for USA & Canada
Licensing discussions starting for Russia and signed term sheet
Licensing discussions starting for China, Korea and Taiwan
HK launch 4Q 18
Maxigesic countries launched and launch plan
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MAXIGESIC: GOING FORWARDS
Additional out-licensing and distribution agreements for Maxigesic oral dose forms have been secured to increase the
number of countries to 125 from 110.
Some additional countries still to be added – Up to about 12
Numerous Maxigesic registrations underway which are required before many launches can occur
Launches have been delayed due to regulatory procedures in EU
Maxigesic IV filings underway around the globe
Maxigesic OL filings to commence around the globe
Maxigesic PE first launch made in NZ and further filings to be made in selected territories
Maxigesic Dry Stick and Hot Drink Sachets targeting completion of registration files by end FY19
Maxigesic Rapid Formulation work almost completed
SUMMARY: Drive sales by
[1] Increasing sales in existing territories
[2] Launch in new territories
[3] Launch additional dose forms
Investor PresentationMay 2018
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NasoSURF: Small and Portable Nebuliser
Additional out-licensing and distribution agreements for Maxigesic oral dose forms have been secured to increase the
number of countries to 125 from 110.
Some additional countries still to be added – Up to about 12
Numerous Maxigesic registrations underway which are required before many launches can occur
Launches have been delayed due to regulatory procedures in EU
Maxigesic IV filings underway around the globe
Maxigesic OL filings to commence around the globe
Maxigesic PE first launch made in NZ and further filings to be made in selected territories
Maxigesic Dry Stick and Hot Drink Sachets targeting completion of registration files by end FY19
Maxigesic Rapid Formulation work almost completed
SUMMARY: Drive sales by
[1] Increasing sales in existing territories
[2] Launch in new territories
[3] Launch additional dose forms
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Sales will be generated from
1) device sales,
2) a per use charge administered through RFID (radio frequency identifier) cards, and
3) consumables
Product description
A handheld ultrasonic nasal mesh nebuliser for the intranasal delivery of medication and treatment of chronic sinusitis
Rationale for investment in
product
• To primarily expand our existing hospital product ranges locally
• Significant global potential
Current status
• Registered as Class I Device with FDA as planned
• Refined design parameters post Human Factor Study
• Target Class II Device FDA Filing end 2018 Calendar Year
Our medium term plans
• Engineering Pilot batches with enhanced design underway
• Distribution studies underway in ANZ
• Specific formulation and dose delivery system work underway
• First Drug PK studies to start in FY2019
• First Drug Clinical Studies to start in FY2019
• Open IND in FY2019
• First drug delivery indication a significant potential market –US$1.2B in USA alone [Based upon market research studies in USA and UK]
• Licensing negotiations during FY2019
NASOSURF NEBULISER: Going Forwards
The NasoSURF Nebuliser has desirable features over currently marketed nebulisers, which are not approved
for delivery of specific drugs intranasally and do not possess a number of the advantages of the NasoSURF
Nebuliser
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Market History – Progress to date
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SUMMARY OF MEDIUM TERM PLANS
Phased launches of Maxigesic in over 110 countries including North America and Europe
Add additional Maxigesic dose forms to the initial launches to extend sales
Further licensing agreements for Maxigesic and Maxigesic IV in larger markets including North America, selected additional markets
NasoSURF and Pascomer
Advancing developmentsOut-licensing when possible
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Further build upon market leading Maxigesic market shares post codeine changes and register and launch line extensions
Further build revenues of OTC product sales in ANZ
Key aim is to trade profitably during FY19
Maxigesic Development Timelines and Lessons
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Started Maxigesic development 2004
• Important to follow key processes1. FTO to check for problems2. File patent application
• Pivotal First Study gave strong efficacy signal1. Decreased risk with grant2. Decreased costs by running internally and avoiding a CRO3. First sales achieved in NZ in 2009 and AU 20144. Initial budget circa $0.5M but had to raise capital to fund development for
outside ANZ. 5. Arguably could have raised capital earlier to accelerate developments
• Line Extensions• Different line extensions such as Oral Liquid and IV are important
• Out-Licensing1. Retaining out-licensing experts was important2. Using US based lawyers experienced in Pharma important
Lessons and the Future
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Local ANZ markets are small for own developments so have to target
overseas
Easier over the years due to improved communications – skype and
fast internet
Tyranny of distance is still real as face to face is still key
Staff are available if recruitment work and training are tackled
ASX & NZX don’t like loss making companies or understand pharma
Harder to implement in the public arena due to:
Disclosure and IR requirements; short term focus
Selling as well as technical is important