AFT Pharmaceuticals (ASX:AFP) is a New Zealand-based specialty pharmaceutical company that offers investors both the stability established, cash-generative Maxigesic franchise sold across 87 countries but also significant upside from a pipeline of new commercial opportunities that the market is ascribing little to no value to.

AFT is a well-established business

AFT has increased its revenue every year for close to two decades, a record that is rare among ASX-listed healthcare companies. In FY26, the company reported revenue of NZ$254.7m, up 22%, with operating profit rising 39% to NZ$24.4m. AFT’s fixed-dose paracetamol-ibuprofen analgesic holds the number one position in the Australian and New Zealand combination analgesic category and continues to generate licensing and royalty income from international partners. Management has guided to at least NZ$300m in FY27 revenue, supported by nine licensing agreements closed in FY26 and a step-up in R&D spending to NZ$25m.

AFT is building a broader portfolio and has several near-term catalysts to come

The more important shift is the emergence of a broader clinical pipeline that positions AFT as a diversified pharmaceutical platform rather than a single-asset analgesic company. The most commercially significant include Combogesic which in the US has secured a Medicare HCPCS J-code and a national shelf presence through a 2026 agreement with Cost Plus Drugs, opening AFT’s largest addressable market. Pascomer, Crystaderm’s China approval, and partnerships with Stablepharma and Sinoject add further licensing optionality.

Legacy business worth A$4.57/6.31 per share with pipeline opportunities significantly larger

We value AFT as A$10.55 per share in a base case and A$13.39 per share in an optimistic (or bull) case (which is NZ$12.63/16.42 per share at current exchange rates). This is a sum of the parts valuation with a traditional DCF of AFT’s legacy business (A$4.57/A$6.31 per share) and then NPVs of 3 of AFT’s most prominent pipeline opportunities (A$6.66/A$8.44 per share). Our modelling estimates there’s at least ~A$600m of value to be unlocked in AFT’s pipeline. Please see page 21 for further details and page 23 for the key risks.