May 6, 2021
After celebrating record revenues and earnings in2020, Hartley and Marree Atkinson have had to lower market expectations for their AFT Pharmaceuticals business in2021.
Covid-related delays to licensing negotiations and disruptions to global supply and distribution networks have prompted reduced guidance for the current financial year, expected earnings are still up on 2020.
However the company has not restructured or laid off staff in response to the pandemic, and “we are really proud of this achievement”, Hartley says.
Much of AFT’s success has been driven by the commercialisation of its Maxigesic painkiller which is now sold in 34 countries. However, the company says it “cannot guarantee” that revenue will increase as anticipated in 2021/22 following the launch of its hospital-grade intravenous formula, Maxigesic IV.
Nevertheless, sales have more than doubled over the past five years to over $100m and AFT’s market cap. has risen by around 40% to $500m since it listed in 2015, which values the Atkinson’s70% stake at $350m.
With an eye to future investor interest, AFT conducted a successful $12m equity raise in 2020 to reduce debt, fund anticipated growth and increase market liquidity.
Looking ahead, the company has also positioned itself to enter the medicinal cannabis market after signing a supply agreement in late 2020 for pharmaceutical-grade ingredients from the Taupo-based company Setek. The first product sold into the Australasian market will be Hemptuary, a hemp-based topical treatment which Atkinson says is a natural extension to the AFT product portfolio.
However, the development of a facial lesion treatment called Pascomer has hit a speed bump. Almost $6m has been invested so far, but clinical trials have been impacted by Covid-19restrictions. AFT is also facing a High Court challenge over who should rightfully develop the drug, although the company says it will “vigorously defend” allegations made by a business partner.
The biggest challenge has been building a business from scratch and adapting as the business grows, Hartley says. “Persistence is very important,” he says, adding that he’s worked hard to hire relatively young locals graduates who would otherwise be lost overseas. “We strongly believe in R&D and the development of valuable IP is essential to growing a strong, prosperous, and independent nation.”
Alternative to opioids
Working from their garage on Auckland’s North Shore, AFT Pharmaceuticals was conceived in 1997 when husband and wife team Hartley and Marree Atkinson hit the road selling products directly to pharmacies. With startup capital of $50,000, Hartley says “most experts rubbished our aspirations and ‘helpfully’ reminded us that the ‘big guys’ would squash us. And while we are not resting on our laurels, we are so proud to be proving our detractors wrong.”
With a Masters of Pharmaceutical Chemistry and a Doctorate in Pharmacology from Otago University, Hartley spent eight years in multinational pharmaceutical companies and was motivated to start his own business after being made redundant by Roche. A former registered nurse at Waikato Hospital and now the company’s chief of staff, Marree has been central to building the company since its inception by directing developments across key parts of the business.
AFT Pharmaceuticals believes the key to improving people’s health lies in innovation, which is why the Atkinson created Maxigesic as an alternative to opioid-based pain relief rugs. “We foresaw opioids as a scourge waiting to happen,” says Hartley, who actively lobbied to ban pseudoephedrine – a pre-cursor to methamphetamine – for over-the-counter cold and flu medicines. “We saw the damage the drug was causing, and we saw better alternatives.”
Based on Auckland’s North Shore, and with offices in Australia, Europe and Asia, AFT has 96 employees and exports or licenses products to 125 countries with a product line that extends to over 130 prescription and non-prescription products in Australasia.
In addition to Maxigesic, the company’s range includes Crystaderm sanitiser, Hylo-Forte eye lubricant, Vitamin CLipo-Sachets, Coco-scalp, RestoraNail and the injectable antibiotic Piptaz. A development programme is also under way for the company's NasoSURF Nebuliser.
Giving back is important, which is why AFT regularly donates products and lower-cost pharmaceuticals to initiatives in Vietnam, Fiji and Bougainville, and has launched a local initiative where customers can choose one of three charities to donate money raised from the sale of Maxigesic.
The Atkinsons live in an $8 million seaside home within walking distance of AFT headquarters and Hartley is said to enjoy a swim on most days during the summer.
2019: $220 million
Article ref: National Business Review