AFT Pharmaceuticals - Maxigesic IV hits a roadblock in the US

In an unexpected development, AFT Pharmaceuticals (AFT) has announced that it has received a complete response letter (CRL) from the United States Food and Drug Agency (FDA) on its application for Maxigesic IV, an intravenous form of its flagship pain relief medicine. Crucially, the observation does not appear to be related to clinical data but involves leachable compounds present in the drug product, which can be addressed fairly quickly, in our opinion. Revised timelines for the data resubmission and commercialisation will be communicated shortly. As a reminder, Maxigesic IV is already launched in seven countries and was out-licensed to Hikma Pharmaceuticals in the US in April 2021 for up to $18.8m in total proceeds. We will reassess our valuation of AFT in light of this development but expect a slight delay in commercial launch.