AFT Pharmaceuticals Secures Favorable Ruling in Pascomer Profit-Sharing Dispute
New Zealand’s Court of Appeal has dismissed an appeal by PBL Solutions regarding profit-sharing from AFT Pharmaceuticals’ topical skin treatment, Pascomer, affirming a 2023 High Court decision. The ruling clarifies that AFT is not required to share revenue with PBL for the commercialization of Pascomer in treating non-orphan conditions, specifically port wine stains.
Background of the Dispute
The dispute centered on the scope of AFT Orphan Pharmaceuticals, a joint venture where PBL Solutions, linked to a former AFT contractor, holds a 35% stake [Capital Brief]. PBL argued for a broader profit-sharing agreement, but the court confirmed that the port wine stain (PWS) application falls outside the “orphan” designation intended for the subsidiary.
Court of Appeal Decision
The Court of Appeal upheld the High Court’s 2023 ruling, dismissing PBL’s claim for a share of profits earned by AFT from the use of Pascomer as a treatment for port wine stains [ASX]. AFT will continue to provide PBL with 35% of profits earned from orphan drug applications of Pascomer and will share costs related to the appeal.
Significance of the Port Wine Stain Market
AFT Pharmaceuticals noted that the market for PWS is significantly larger than the drug’s original orphan indication for facial angiofibroma, representing roughly 36 times the patient potential [Grafa]. This ruling allows AFT to retain full control over the commercial opportunities presented by this larger market.
Financial Impact
AFT Pharmaceuticals stated that the judgment is not expected to have a material impact on its FY2026 earnings guidance, which remains on track for an operating profit between $20 million and $24 million [Grafa]. The company anticipates certainty over future economics from the potentially much larger non-orphan market [TipRanks].
About AFT Pharmaceuticals
AFT Pharmaceuticals is a New Zealand-based multinational pharmaceutical company that develops, markets, and distributes a broad portfolio of proprietary and in-licensed medicines across over-the-counter, prescription, and hospital channels. Its products are sold in core markets such as Australia, New Zealand, parts of Asia, North America, and Europe, with out-licensing agreements extending its reach to more than 125 countries.