AFT Licensing Agreement for Pascomer(R) in North America

Market and Media release 05 July 2019

AFT Pharma Reaches Licensing Agreement for Pascomer
®
in North America

Key points:
•
Clinical trials to commence in research centres in five countries, including the
world-renowned Mayo Clinic.

•
The drug is a treatment for Facial Angiofibromas in Tuberous Sclerosis; a market
which could potentially be worth US$300+ million in the USA.

• AFT takes 100% control of Dermatology Specialty Limited Partnership (DSLP)
the joint venture set up to develop Pascomer as part of the agreement.

AFT Pharmaceuticals (NZX.AFT, ASX.AFP) has reached an out-licensing and
development agreement with US-based Timber Pharmaceuticals [Timber] for
the USA, Canada & Mexico for its orphan drug
i
Pascomer.

Pascomer (Active ingredient, Rapamycin) is a topical treatment for Facial
Angiofibromas in Tuberous Sclerosis. The disease affects over 30,000 patients in
the US alone which could potentially be worth US$300+ million in the USA - if
clinical studies are successful.

The first of AFT’s two planned clinical studies in 120 patients is due to start in
eight study centres around the world, including the world-renowned Mayo
Clinic in Rochester, Minnesota in the US. Research centres in Australia, Spain,
the UK and New Zealand are also taking part in the trial. Results are due in
2020.

Rapamycin is normally easily oxidised and typically has limited stability in
topical formulations. However AFT has developed a formulation that uses a
proprietary dermal delivery technology that has overcome these stability
issues.

Extensive pre-clinical development work has been completed and an
Investigational New Drug Application (IND) has been approved by US FDA. AFT
will run the clinical study program in conjunction with Timber, which will cover
both trial costs and direct AFT staff costs for staff involved in the Pascomer
development program.

AFT CEO Dr Hartley Atkinson said the agreement with Timber – US based
company specializing in the development and commercialization of
dermatology treatments for rare diseases - represents both a significant and
exciting opportunity.

“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,” Dr Atkinson said.

Timber will cover all clinical trial costs. AFT will receive signing and, provided
development proceeds successfully, staged development and registration
milestone payments in excess of US$10 million, potential sales milestone
payments in excess of US$10 million and ongoing sales-royalty payments. At
this early stage of the financial year and with the timing uncertainty of the
development, AFT will leave its present operating profit guidance for FY2020 at
NZ$9-12m.

“We are looking forward to the start of clinical trials. We are excited to have
secured prestigious clinical trial sites such as the Mayo Clinic in the US,
Children’s Health Queensland in Brisbane, Clinica Universidad de Navarra in
Spain and Christchurch Hospital.

“Facial angiofibromas are a disfiguring condition affecting patients from
childhood. So, a successful Pascomer development will offer an important
therapeutic option to these sufferers,” Dr Atkinson said.

As part of the agreement, AFT has also taken 100% control of the original
partnership set up for development of Pascomer, DSLP

In a series of transactions covered by the agreement, DSLP joint venture
partner Tardimed (formerly named Medicas), which is the majority shareholder
in Timber, transferred its share in the DSLP partnership to AFT.

Under the terms of the deal Timber, in addition to its sales of Pascomer in North
America , will also earn a 50% share of DSLP’s net royalties outside North
America, Australia, New Zealand and SE Asia.

Timber President, Zach Rome said: “AFT’s dermal delivery technology coupled
with Pascomer is potentially a significant breakthrough for people with facial
angiofibromas. We are delighted to be working with Hartley and his team to
take this treatment to market in North America.”

For more information:


Investors Media
Dr Hartley Atkinson Richard Inder
CEO, AFT Pharmaceuticals Ltd The Project
Phone: +64 9 488 0232 Phone: 021 645 643
Email: hartley@aftpharm.com Email: richard@theproject.co.nz

About AFT Pharmaceuticals
AFT is a growing multinational pharmaceutical company that develops,
markets and distributes a broad portfolio of pharmaceutical products across a
wide range of therapeutic categories which are distributed across all major
pharmaceutical distribution channels: over-the-counter (OTC), prescription
and hospital. Our product portfolio comprises both proprietary and in-licensed
products, and includes patented, branded and generic drugs. Our business
model is to develop and in-license products for sale by our own dedicated
sales teams in our home markets of Australia and New Zealand and in certain
Southeast Asian markets, and to out-license our products to local licensees
and distributors to the rest of the world. For more information:
https://www.aftpharm.com/


About Timber
Timber Pharmaceuticals LLC (www.timberpharma.com) was founded in 2019
to develop treatments for unmet needs in medical dermatology. The
company has a particular focus on rare diseases or conditions for which there
are no current treatments available. Timber's lead program, TMB-001, is a
novel, proprietary topical therapy in clinical development for the treatment
of congenital ichthyosis, a rare, debilitating disease that involves generalized
scaling of the skin


i
Orphan drugs are treatments for people with rare medical conditions. People with rare medical
conditions often find that treatments are either unaffordable or simply do not exist. Typically, this is
because drug development is costly, and companies can find it difficult to recoup their investment when
the number of people suffering from a particular condition are relatively few.
To encourage companies to develop treatments for rare conditions (orphan conditions), the regulatory
requirements for developing and licensing treatments can be lessened by a regulator. For example,
clinical testing studies for orphan drugs may be permitted to use smaller patient groups. Tax incentives or
research grants can be offered and patent protections increased. These incentives exist in the US and
Europe legislation, but do not in New Zealand.