Why the AFT Pharmaceuticals (ASX:AFP) share price is in focus

The AFT Pharmaceuticals (ASX: AFP) share price is one to watch today after the company signed a new US licensing deal with a major supplier.

| More on:
A doctor or medical expert in COVID protection adjusts her glasses, indicating growth or strong share price movement in ASX medical, biotech and health companies

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

sdf

The AFT Pharmaceuticals Ltd (ASX: AFP) share price is one to watch this morning.

Shares in the Kiwi-Australian pharmaceuticals group could be on the move after the company announced a new licensing agreement in the United States.

Why is the AFT Pharmaceuticals share price in focus?

This morning, the company announced the signing of an exclusive license and distribution agreement with Hikma Pharmaceuticals USA ("Hikma"). The new deal is to commercialise Maxigesic IV in the United States with the major pharmaceuticals supplier.

Maxigesic IV is an intravenous, opioid free, postoperative pain relief medicine developed by AFT. Today's agreement represents the first out-license of the Maxigesic family of medicines in the US market.

That's an important milestone for the company and the AFT Pharmaceuticals share price is one to watch as a result. In today's release, AFT also said it was targeting the US market for the tablet and liquid forms of the medication in the longer term.

What are the terms?

Under the terms of the agreement, Hikma will have exclusive rights for the sales, marketing and distribution of Maxigesic IV in the US. AFT will receive upfront, regulatory and commercial milestone payments of up to US$18.8 million in return.

The milestone payments comprise US$7.5 million based on triggers leading up to and including registration and first commercial sale of the product. US$3.6 million of those will be earned once Food and Drug Administration (FDA) approval is received. The trans-Tasman pharma group will also receive a profit share from in market product sales.

That's potentially big news which puts the AFT Pharmaceuticals share price on watch this morning. Shares in the pharma group are down 28.0% in 2021 with a market capitalisation of $381.6 million prior to the open.

Foolish takeaway

Hikma is the third largest US supplier of generic injectable medicines by volume. AFT also said it is working to complete FDA approval for the tablet form of the medication.

Investors will be watching the AFT Pharmaceuticals share price ahead of its audited financial results in May.

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Healthcare Shares

Cropped shot of an attractive young female scientist working on her computer in the laboratory.
Healthcare Shares

3 ASX companies that are global leaders

Numerous ASX companies have extended their reach beyond Australia to dominate in their fields.

Read more »

Three people in a corporate office pour over a tablet, ready to invest.
Broker Notes

Bell Potter just slapped a buy on this ASX 200 share offering a 30% return

Which stock is being tipped as a buy? Let's find out.

Read more »

Happy healthcare workers in a labs
Healthcare Shares

Macquarie initiates coverage of Neuren Pharmaceuticals shares; forecasts 45% upside

The broker described Neuren as a standout in the ASX biotech sector.

Read more »

A woman leans forward with her hand behind her ear, as if trying to hear information.
Healthcare Shares

Does Macquarie think Cochlear shares are a buy, hold, or sell?

Macquarie has released a new note on Cochlear following the company's FY25 profit guidance change.

Read more »

Stethoscope with a piggy bank in the middle.
Healthcare Shares

Up 18% this year, does Macquarie expect NIB shares to go higher?

This expert has a bold prediction for NIB.

Read more »

Cropped shot of an attractive young female scientist working on her computer in the laboratory.
Healthcare Shares

Why is the Mesoblast share price up 11% in June?

The ASX biotech share reached a 10-week high of $1.94 today.

Read more »

Shot of a scientist using a computer while conducting research in a laboratory.
Healthcare Shares

Up 51% since the tariff pain, is it too late to buy Pro Medicus shares?

After rocketing higher, is the ASX healthcare share still an opportunity?

Read more »

A woman wearing a yellow shirt smiles as she checks her phone.
Healthcare Shares

CSL shares push higher on US FDA approval

This biotech giant has been given a boost in the United States.

Read more »