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AFT signs North American licensing deal for Pascomer topical treatment

Friday 5th July 2019

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AFT Pharmaceuticals is eyeing a US$10 million payment from a North America licensing deal but is keeping its earnings guidance unchanged for now. 

The maker of Maxigesic painkillers reached the licensing and development agreement with US-based Timber Pharmaceuticals for its Pascomer drug, which treats skin lesions known as facial angiofibromas associated with the genetic disorder, tuberous sclerosis. 

Timber will cover the cost of two clinical trials involving 120 patients, with the results due next year. If development goes ahead, AFT will receive more than US$10 million in signing, staged development and registration milestone payments. Further sales milestone payments of more than US$10 million and ongoing royalties may follow, it said in a statement. 

"The deal we have struck with Timber, mitigates AFT’s research and development risks, while still promising strong returns for the company if the clinical trials proceed successfully," executive director Hartley Atkinson said.

AFT left earnings guidance unchanged for operating profit of $9-$12 million in the year ending March 31, given the "early stage of the financial year and with the timing uncertainty of the development."

The company reported operating earnings of $6.1 million in the March 2019 year, turning around an operating loss of $10.1 million a year earlier. 

As part of the deal with Timber, AFT will take full ownership of DSLP, the original partnership with a Timber subsidiary set up to develop Pascomer. That will see Timber earn a 50 percent share of net royalties from DSLP outside North America, Australia, New Zealand and South East Asia. 

Facial angiofibromas in tuberous sclerosis affects 30,000 people in the US and could potentially be worth more than US$300 million, AFT said. 

Pre-clinical development has been completed and an investigational new drug application has been approved by the US Food and Drug Administration. 

AFT shares last traded at $3, and have climbed almost 40 percent so far this year, the fifth-biggest gain on the S&P/NZX All Index. 


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