NEW YEAR LETTER TO INVESTORS

AFT Pharmaceuticals Limited,
Level 1, 129 Hurstmere Road, Takapuna, Auckland 0622, New Zealand
Incorporated in New Zealand ARBN:
ARBN 609 017 969 investor.relations@aftpharm.com








13 January 2025

NEW YEAR LETTER TO INVESTORS
AFT putting building blocks in place for long-term growth
Dear shareholders,
As the new year commences, AFT Pharmaceuticals is looking forward to building on
the foundations we have put in place for international expansion.
Despite the sales disruptions we reported in our 1H FY25 results in November, we
expect to achieve record sales of more than $200M in FY25 which would be a
significant increase from $56M and $106M turnovers in the FY15 and FY20 financial
years respectively. We meanwhile remain firmly focussed on our target of achieving
$300M turnover (on a rolling annual basis) by the close of the FY27 financial year.
Figure 1: Our long-term growth record

1. CAGR growth figure refers to the FY 2014 – FY 2024 period.
$83.6
$86.7
$49.0
$56.0
$64.0
$69.0
$80.0
$85.0
$106.0
$113.1
$130.3
$156.6
$111.8
$195.4
$-
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
$140.0
$160.0
$180.0
$200.0
FY2014FY2015FY2016FY2017FY2018FY2019FY2020FY2021FY2022FY 2023FY 2024FY2025
$NZM
AFT OPERATING REVENUE – 10 YEAR CAGR OF 14.8%
1

AFT Pharmaceuticals Limited,
Level 1, 129 Hurstmere Road, Takapuna, Auckland 0622, New Zealand
Incorporated in New Zealand ARBN:
ARBN 609 017 969 investor.relations@aftpharm.com



We are putting in place the building blocks for future growth in a number of key areas:
1. I ncreasing our local Australia and New Zealand portfolios with new launches
and building out our product pipeline in these markets.
2. Getting the right people employed and product pipelines in place for our new
businesses in the USA, Canada, and South Africa
3. Bedding down the significant new product launches in Europe and China to
grow our international and Asia businesses.
4. Broadening our current international and Asia product portfolio and
5. Strengthening and advancing our R&D pipeline.
The importance of these strategic initiatives, which are also targeted at increasing the
geographic diversity of AFT’s revenue, was highlighted by the one-off sales disruptions
that weighed on the results for 1H FY25. As we signalled, the investment required to
support these initiatives will weigh on short term earnings, but we believe it will deliver
the returns shareholders expect over the longer term.
Our record in Australia and New Zealand demonstrates our capability to successfully
invest for long term growth and deliver for shareholders. In the six months to the end
of September 2024, we grew revenue in these markets by 19% and 14% respectively
compared to the same period in the prior year, despite lukewarm economies in both
regions. Most of this growth came from existing products (launched 3 or more years
ago), but we expect new products once established to make a significant
contribution in the future.
International
Extending the reach of AFT-developed medicines
We have launched Combogesic
®
IV (Maxigesic
®
IV) and are about to launch the
tablet form Combogesic Rapid in the US, the world’s largest market for pain relief
2
.
Additionally, we continue to build out the number of countries where
Maxigesic/Combogesic IV is sold with positive progress for new launches especially in
South Africa and Eastern Europe.
Sales in some territories, such as the USA and UK, where the inclusion of our medicines
in hospital formularies is pivotal, will take time to build as we progress the necessary
applications and approvals.
We are meanwhile progressing regulatory approvals for the Maxigesic family in several
new markets including those in the MENA region such as Saudi Arabia, Egypt, and
Morocco.
Launches in territories where the medicines have already been licensed and where
we have regulatory approval as well as growth in territories where the medicine has
already been launched, will also contribute significantly to the international business
over time. In addition to the Maxigesic portfolio, we are progressing

AFT Pharmaceuticals Limited,
Level 1, 129 Hurstmere Road, Takapuna, Auckland 0622, New Zealand
Incorporated in New Zealand ARBN:
ARBN 609 017 969 investor.relations@aftpharm.com

commercialization of existing product developments: Crystaderm
®
, Capsaicin cream
and Micolette
®
Microenema.
New business hubs
We are committed to building the i nternational infrastructure that we discussed in the
last two year’s newsletters.
We now have a team of four staff, including an experienced CEO, in our UK office in
London. We have also recruited e xperienced country heads for our USA, Canada and
South Africa businesses and have set clear growth targets in each of these markets.
In the USA we are focussed on supporting our existing licensees and distributors and
finding additional distributors for specific market segments for drugs like Combogesic
Rapid. Additionally, we are strengthening our distribution of targeted OTC products
currently sold on Amazon to widen distribution into physical retail stores.
In Canada we will launch Combogesic IV ourselves and are building a pipeline of
products for this market. In South Africa we will primarily target the private hospital
market and have acquired a company with access to several product registrations
to accelerate this program. The private hospital market in South Africa is of a similar
size to the Australian hospital market, so offers a significant opportunity. Canada and
the UK meanwhile offer opportunities that are proportionately much larger than our
current ANZ businesses.
Our European office based in Ireland has been strengthened with the acquisition of
four products. One of these, as we flagged last year is a specialty niche intravenous
product discontinued by a large multinational. The remaining products were acquired
from a German company in receivership that was unable to capitalize on the
potential we see for them. These opportunities take about 18-24 months to then get
to market with distribution agreements reached during 2024 and launches planned
during the 2025 calendar year. The acquisition costs would then be expected to be
recouped within 12 months post launch.
In Asia, we are focussed on expanding our business in China, the world’s second
largest pharma market. Our licensee, Hainan Hayao will shortly launch our antiseptic
cream Crystaderm. At the end of last year we struck a further out-license agreement
with Hainan for a further four OTC products.
Initial sales for the four products are planned to be in the Lecheng free trade zone.
Sales in mainland China for three of the products are expected in 2025 calendar year
and the remaining product in 2026.
Australia and New Zealand
We are pleased with the results of the investments we have made for growth in our
Australasian markets, including the establishment of a new doctor-focussed sales
force in Australia and additional marketing investment in both Australia and New
Zealand. Sales grew by 19% and 14% respectively in 1H 25 with much of this growth
flowing directly from these programmes. Going forward we will focus on growth whilst

AFT Pharmaceuticals Limited,
Level 1, 129 Hurstmere Road, Takapuna, Auckland 0622, New Zealand
Incorporated in New Zealand ARBN:
ARBN 609 017 969 investor.relations@aftpharm.com

maintaining control over promotional investment to improve profitability from these
markets and secure operating leverage.
Our active in -licensing program continues to provide interesting opportunities. For
example, in late 2024 we secured ANZ distribution rights for a patented novel eye drop
for the treatment of presbyopia (the age-related reduction in the ability to focus on
nearby objects). The medicine can minimize or avoid the requirement for reading
glasses and we believe it will significantly add to our existing eye care franchise. In-
licensed products require some investment in licensing fees and promotional activity,
but we believe the programme is important for the ongoing growth of the ANZ
business.
We have several other interesting specific local developments in addition to our R&D
pipeline which together with in-licensed projects will continue to bolster our business
in ANZ. Where possible and appropriate, we will also look to add additional territories
to our ANZ licenses for regions such as Canada, the UK, Singapore and Hong Kong to
further leverage our international expansion.
E-Commerce
We discussed last year our first major e-commerce project in international markets was
the Cross Border E-Commerce (CBEC) site via Tmall China. It is progressing
satisfactorily, and sales are around double the prior year.
The Amazon sites in the USA, UK and Australia are progressing and we will add Canada
as well in 2025. A key project for 2025 is to build physical sales presence in addition to
the E-commerce sales in all these markets.
Research and Development
Our research and development programme as discussed last year remains the most
complex part of our business, both to undertake and to explain to investors.
Presently we are pursuing opportunities to out-license developed or in -development
R&D products with some seventeen deals under discussion with interested parties in
various geographies around the globe. These deals follow on the successful
conclusion of the four drug out-licensing deal with Hainan Hayao mentioned above.
Licensing and milestone fees that are expected to flow from these agreements will
also help to offset drug development costs.
In last year’s update we featured projects BT (Micolette Microenema), ST (Crystaderm)
and KW (Kiwisoothe tablet) as being in our R&D development pipeline and all of these
are now moving to the commercialisation stage.
AFT’s profitability means we are well positioned to fund R&D from our existing
cashflows which is very unusual for a small pharma company. The challenge with the
R&D pipeline is achieving commercialization as rapidly as possible and with a tightly
controlled spend. We have decided with our latest activities to now primarily focus on
execution of at least part of the existing pipeline prior to seeking new R&D projects.
In 2024 we added three new projects to our R&D pipeline:

AFT Pharmaceuticals Limited,
Level 1, 129 Hurstmere Road, Takapuna, Auckland 0622, New Zealand
Incorporated in New Zealand ARBN:
ARBN 609 017 969 investor.relations@aftpharm.com

• a topical treatment for vaginal lichen sclerosis (VLS) to be co-developed with
Hyloris Pharmaceuticals;
• a topical treatment for keloid scars licensed from New Zealand’s Massey
Ventures; and
• a late-stage injectable New Chemical Entity (NCE) in an attractive growing
market category to be co-developed with presently unnamed EU partners
contingent upon a successful meeting with US FDA and EMA to confirm the
final development study(ies) required.
We have also initiated an extensive development project with a manufacturing
partner based in China to develop a portfolio of 24 hospital injectables primarily for
our new business hubs in Australia, Canada, Hong Kong, New Zealand, Singapore,
South Africa and the United Kingdom.
We estimate this portfolio of medicines opens a potential market for AFT of US$450M.
We see this partnership and the investment required to support it as important to
expand our pipeline for hospital injectables in our own markets. Additionally, we can
out-license these medicines to Europe and some other selected target markets.
We continue to advance our Pascomer dermatology project. As previously signalled,
we are progressing a pilot study to investigate the potential efficacy of the medicine
in the treatment of Port Wine Stains after laser treatment, a significant non orphan
indication.
We are aiming in the 2025 calendar year to initiate pivotal clinical studies for our eye
drop for drug resistant eye infections the late stage injectable NCE and Pascomer for
Port Wine Stains.
For some of these projects such as the late stage injectable NCE we have licensing
interest even at this development stage. Additionally regulatory filings and out-
licensing will commence for the twenty-four drug injectables pipeline. All of these are
important to maintain a balanced approach to our expansion and R&D pipeline.
The pipeline remains significant being in order of potential commercialization
timelines: (1) 24 drug hospital injectable portfolio; (2) Eye drop for drug resistant eye
infections; (3) Novel NCE IV; (4) Pascomer PWS; (5) Topical Strawberry Birthmarks
Product; (6) Burning Mouth Syndrome Product; (7) VLS Topical Product (8) Keloid Scar
Topical Treatment; (9) NasoSURF.
The financial upside from these projects is interesting and looking at the first 3 projects:
(1) the 24 drug hospital injectable portfolio spans some US$450M across just our own
territories; (2) the second project, the eye drop, we estimate potential in -market
global sales of around US$750M,provided the development program is successful; (3)
for the 3
rd
project, the Novel NCE, it is currently targeted at a US$3 billion market which
is forecast to grow to in excess of US$7 billion by 2030.

AFT Pharmaceuticals Limited,
Level 1, 129 Hurstmere Road, Takapuna, Auckland 0622, New Zealand
Incorporated in New Zealand ARBN:
ARBN 609 017 969 investor.relations@aftpharm.com


Financial outlook
We continue to focus on financials in parallel to our investments in geographic
expansion and the R&D pipeline. This is consistent with our approach over the years
where we originally boot-strapped but significantly grew our business with a start-up
capital of only $50K.
We are reducing our stock holdings post pandemic and maintain a careful
management of our cash position. However, it should be noted that the company
also does have extra borrowing capacity if needed for expansion.
Introducing more products in our markets, especially our new countries, is an
important element to offset the current investment spend prior to income being
generated. We believe that we are approaching an inflection point and remain
focussed on driving business toward the $300M per annum sales target.
With our best wishes for the year ahead.
Kind regards


David Flacks Dr Hartley Atkinson
Chair Managing Director



For and on behalf of AFT Pharmaceuticals Limited by Malcolm Tubby, Chief Financial
Officer.
For more information:
Investors Media
Dr Hartley Atkinson Richard Inder
Managing Director The Project
AFT Pharmaceuticals Tel: +64 21 645 643
Tel: +64 9488 0232


About AFT Pharmaceuticals
AFT is a growing New Zealand based 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,

AFT Pharmaceuticals Limited,
Level 1, 129 Hurstmere Road, Takapuna, Auckland 0622, New Zealand
Incorporated in New Zealand ARBN:
ARBN 609 017 969 investor.relations@aftpharm.com

and includes patented, branded, and generic drugs
1
. Our business model is to
develop and in-license products for in our markets of Australia, New Zealand,
Singapore, Malaysia, Hong Kong, USA, Canada, EU ex Ireland and UK, and to out-
license our products to local licensees and distributors to over 125 countries around
the world.
For more information about the company, visit our website www.aftpharm.com
.

Note: AFT UK, AFT South Africa and AFT Canada are 70% owned by AFT with Edge Pharmaceuticals owning 30%