AFT Pharmaceuticals Limited (AFT) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the AFT Pharmaceuticals FY 2023 Half Year Results Analyst Briefing. [Operator Instructions] I would now like to hand the conference over to Dr. Hartley Atkinson, Managing Director. Please go ahead.

Good. Thank you very much, and thank you, everyone, for attending. So look, perhaps just to work for initially the investor presentation, to flip through that, I'll just talk to the pages. So there's Page #1 is the cover page. Page #2 is just a disclaimer. So please be aware of the details of that. Now moving on to Page 3. What this is looking at is basically our growth from -- and we have had strong growth across our local Australasian business. Just a background, we have 150-plus products across 7 key therapeutic areas and they're distributed across 6,800 pharmacies. So there's about 5,800 in Australia and about 1,000 in New Zealand. Asia, we -- another region, we have a broad range of products sold in the Asia region. And then anywhere outside Australasia and Asia, we characterize as Rest of World, where primarily we're commercializing our R&D pipeline. And that's across some -- presently across some 51 countries, including Australia and New Zealand, and we do have agreements in more than 100 territories or countries. And that's what we're working on, to get out to that 100-plus. So basically, in the first half of this financial year, we delivered overall revenue growth of 18%, so that's including licensing income. We'll talk a bit more about that later. And we also launched 11 new products in Australasia with the majority of those being in Australia. And then we have to continue on with our international growth with additional countries launched for Maxigesic. So flip to Page 4 to start to drill down into the results a bit more. What we can see is, overall, the half year sales were $65.8 million, which is an increase of 18.4% from last year. These sales do include licensing income, which is actually a lumpy item. Basically, we had quite a good amount of licensing income in last year's results. This year, we didn't really have any significant licensing income hit the first half result. And if we look at just sales and royalties, we actually increased product sales and royalties by 30%. So we actually had strong underlying growth in our sales. In terms of operating profits, they were -- we'll talk about it in some detail as well. They were down a bit from $5.5 million to $3.5 million, and the net profit after tax was down. But primarily, this is due to impacts of licensing income. And when we recognize it, we talked more about that, and then also increased investment, which we're making and actually increasing in the new product launches. You can see looking at the graph underneath revenue by region, we're growing as we always had year-on-year. Revenue by territory in that middle kind of pie graph, you can see essentially Australia is the major chunk of our revenue. New Zealand actually had a pretty strong half. So that actually has increased a little bit. International, we'll talk about that in more detail, although it appears smaller product sales were up quite a lot, but we also include the licensing income. So that went backwards a bit when we look at overall, the overall licensing income plus product sales, the product sales increased. And then Asia is a relatively consistent kind of 5% or 6% chunk of the pie presently. So clicking over to the next page to start to look a bit more at Page 5, to look at a bit more at the Australian market. So basically, sales in Australia were up 24%. And certainly, we've seen some benefit from normalization of trading post COVID restrictions. And also, we have 11 new product launches, which only really started to come in towards the end of the half year. So we will see those contribute as well in the second half. We're seeing good growth in our OTC channel, with sales were up 36.9%. And then we also have growth across our hospital and prescription channels as well. You can see, looking at the bottom right, the pie graph of what our products split is, we were getting actually more a higher percentage of sales from OTC this half year, which is an area we have been focusing on, yes, so that was positive really. That's Page #5. Page #6. Looking at New Zealand, we didn't really have a lot of product launches in the New Zealand market, but we actually had strong organic growth, sales growth, 35%, from last same comparable time period last year. A lot of that was due to easing back of COVID restrictions, but also we had a number of business activities that worked pretty well. And that's behind that 35% growth, which is, in our view, a really good result. We can see in the pie graph, we actually did get quite a lot of growth in the prescription area as well. We saw some strong growth there. But still, OTC was the majority of our sales in the New Zealand market. So that's New Zealand on Page #6. Page #7, just having a bit of a look at the overall Australasian growth and investment. Look, this is part of the story behind our profit and the reforecast that we are looking at a lot more investment in the new products. So basically, we launched 11 products in the first half, a lot of those come in towards the back end of the first half. And then in this half, we have a launch of about 15 products. So -- and we did launch products there, for example, we launched 5 OTC products, which included Maxigesic hot drink sachets, which went very well, actually better than we expected. And one of their biggest challenge is with staying in stock. There are still quite a lot of challenges with logistics and lead times for product launches because there seem to still be quite a lot shortages of some of the ingredients and excipients and often launches do get delayed. And often, we have had to air freight some stock in to try and keep a reasonable launch time line. That does tend to eat into our product margin. But really, it's primarily a short-term thing, and we think it's better to get the product launched even if we do get some extra costs to do that. But over time, we do primarily sea freight, which is generally a lot cheaper. So by the end of FY 2025, so that's over a 3-year horizon, we are launching 76 new products into the Australasian, Australia and New Zealand market. And this year, we've just signed off an additional $10 million of expenditure on sales and distribution to really support the new product launches. It's a bit more than that in our budget is about $10.7 million, almost $11 million. And then also, too, we've got a new dedicated GP sales force for the Australian market, which we're going to bring on and also they are working directly for AFT. So look, that's a bit of a snapshot on our new products. And moving on Page #8, which is the Asian business segment. So sales in Asia grow 26% in comparison with last year. What we've been focusing on is the OTC area, where we -- in Singapore, we've taken on ASX-listed McPherson to assist us with distribution and selling at a local level and to drive OTC sales. And we saw a more than doubling of our OTC business, which in part, with Singapore, but also we've seen good Maxigesic growth in Malaysia and Hong Kong as well. So yes, we are starting to pick up some momentum in that area. Our hospital business as well, which is still quite a large chunk of the pie presently, also grew by about 44%. So that's still quite a chunk of the business. But certainly, we are focusing on the OTC side as well because that's an area we want to grow out in the future. So that's Slide #8. Moving on to Slide #9, international. We saw strong organic sales growth. The licensing income, as I mentioned, is relatively lumpy. So we didn't have any significant licensing income. So overall, there was a decrease in international sales if you're looking at overall sales being licensing income plus product sales and royalties. If you strip out the licensing income, the product, sales and royalties, grew by 68%. So we're certainly seeing good growth of product sales and also good growth in royalties as well. One of the key items that also does impact for the whole year the licensing income is the United States Maxigesic. And presently, there has been a delay. We still are confident of registration next calendar year. But basically, we have to go back to FDA with some additional data on what's called extractable and leachable, which is out of the glass and the buying of the Maxigesic IV container, and that work is presently underway in the U.S. We did have a slightly slower rollout of Maxigesic at dose forms. We had originally targeted 90 countries. We believe for this year it's going to be more like 70 -- or sorry, I mean, next year, we believe it's more going to be like 73, down from 90. We have put Russia on hold. And also, in countries like a lot of the African countries, certainly COVID has slowed down the regulatory progress within those countries, so that has slowed some things down. But still, we're getting good growth in overall product sales and royalties. So it's that page. Going on to Page #10, which is our global map. Look, this is just a snapshot. I think, as we've explained before, we basically have countries we've launched in are in yellow. Countries we're in registration are in blue or have agreements are in blue. And then countries where we haven't got agreements are in white. The key countries at the moment are China, where we're still undergoing discussions. And China certainly has been very much slowed down by COVID restrictions presently. Also Japan, we have discussions underway still, and Brazil as well. And we also have some discussions starting in Argentina. So those are really the primary that sort of a blank white on the map. In countries like India, we decided not to target that at all, so that won't change. That's Page #10. Going to Page #11, the R&D pipeline. The approach we've taken is that we believe presently is an opportunity. Like effectively, we've gone shopping, I guess, is one way of putting it, where we've gone out to seek additional end licensing, additional R&D, whereas a couple of years ago we were focused on paying down our CRG loan facility. But now we're actually looking at investments and putting our foot on -- putting our foot on the accelerator, both with sales but also with R&D as well. Our expenditure, though, is relatively flat. And the first half is pretty much as expected and still sticking within our guidance of spending about $12 million per annum. So the projects we have underway is NasoSURF, which is a patented ultrasonic nasal mesh nebulizer. And we just got a first study is underway, which we're expecting to complete this financial year. And then we want to move into the first entrant to human study. And then we're looking to move out to do some larger clinical studies with the first initial indication having an addressable market in the U.S. of around about $1 billion. So that's the one that we're targeting first. We have a number of other projects, HS, BT, that's a gastrointestinal medicine, which we're just starting to get the dossier ready to file during this financial year to be ready to be filed. This is an example of a product where we were able to pick this product up from a company that was having a few financial difficulties. And really, we've got the whole product for about $750,000 by the time all the various amounts were paid, and we think that's an example of good expenditure, which previously we would not have had the opportunity. Strawberry birthmarks is another area. We have reached agreement with Gillies McIndoe Research Institute in Wellington and Massey Ventures to license some of -- and we're starting a big drug development project around strawberry birthmarks, which is an area we feel there is a good opportunity and also we feel it's something that will be really good for parents and children to have a topical treatment. Presently, there is an oral treatment, which is only used in limited number of patients because it can be toxic. So yes, there is a good need for this sort of development. So that project is underway presently. So we've got a number of other ones, KW, medicinal cannabis is progressing. We're keeping most of that confidential. We're making reasonable progress on that as well. But that's certainly -- it's not our prime focus, but it's just basically one of our R&D areas. So yes, we're making good progress and still looking at potentially adding another significant R&D project, but we're basically still looking around presently. The advantages, though, is that a lot of companies in the United States, for example, it's very difficult to raise capital presently. So normally, they would have been able to do that, presently, they can't. So what we typically do is we will be able to take over the drug development, and they would get a share of the proceeds once -- provided we were able to successfully complete the R&D and to commercialize it. I guess, in the past, those wouldn't have been available as companies just would have gone to the market and raised capital and done it themselves. So there are a number of opportunities like that, that have come to us. So moving on to the next page, #12. I'll hand over to our CFO to talk about the numbers. Thank you, Malcolm.

Thanks, Hartley. So revenue at the top, just under $66 million, a growth of 18%. Gross profit up to $28.7 million. Margin overall comes down to 43.6%. If we look at the bottom of the slide, we're showing you the gross profit on just the product, sales and the royalties. So they stay the same or improved a little tiny bit to 43.6%. Operating expenses overall stayed around about the same at 38%. Operating profit of $3.4 million, down on the total from last year of $5.5 million. And if we take the license income out of last year, that would have been $700,000. So a good uplift there in the product sales side of the business. Finance interest rates are going up a little bit. As we all know, tax, we are back into a tax-paying position now. We've utilized all of the losses that we ran for a couple of years in our R&D program, so that leaves us overall with a profit after tax of $1.4 million. If we move over to the next slide on the cash flow. So we generated $6 million from our operating activities, and we're holding high inventory levels still on the existing stock plus within bringing in the new product launches. So higher inventory levels at this stage. Investing activities, we've spent $4.8 million. So that's our ongoing investment into R&D and intellectual property. Financing activities, the $3 million outflow is the interest, and we've repaid $2 million of the BNZ facility. So at the half year, down a couple of million, but leaving us overall our cash balance around about the same of $5.8 million. Then moving to the balance sheet. I guess the key pieces here are net debt remaining around the same, just under $30 million. We are in the process of renewing the banking arrangements with the BNZ. We've signed the committed term sheet, and we'll be signing the documentation we anticipate by the -- it will be probably next week or the week after. And that will extend the facility. The main facility then goes out to April '26. And there is -- a part of it is the $5 million, which actually goes out to May. So then I think the other key feature on the balance sheet really is the current assets, which is -- and that's primarily the inventory holdings. That's the balance sheet. Hartley, I will pass it back to you.

Yes. Look, just the final page, the kind of outlook and the summary. So traditionally, we have always had a stronger second half with more like 60% of the sales carrying in the second half. We expect this year, this period to be at least the same or even more so as we have a lot of additional launches in the second half planned, and our key focus at the moment is getting those launches completed and things are on time, which is not always 100% simple presently with shipping and production lead times. So we're certainly focused on that. Look, we have had higher and we are increasing our investment as well in the second half in sales and distribution because we want to make sure we -- that those launches are successful and have the right amount of investment behind them. So that, together with delayed licensing income, we have revised the guidance on to $18 million to $23 million for this financial year. We do expect the sale, if we split it out, we see sort of the sale of existing products and product royalty to generate profits of between $17.5 million to $21 million, which is up quite a lot from last year where we did also have a chunk of licensing income as well. So basically, and then in terms looking separately at licensing income, this, by its nature, tends to be less predictable and lumpy. And we're looking at that contributing between $0.5 million to $2 million to operating profit. And going forward, we are looking at splitting this out because certainly people have said to us that this is the area they find as a little bit confusing and hard to follow. And certainly, there is that lumpiness, and the timing can cause issues. So look, that sort of is what makes up the $18 million to $23 million. What we're going to very much though is we want to put our foot on the accelerator, we are looking to exceed our target. Our near-term target is to succeed a couple of hundred million dollars in annual sales. And we're pushing on to that. It wasn't that long ago we broke $100 million. So we're certainly making sure and gearing the business to really ramp the sales up, which long term is what we see as the key item going forward. We are confident of securing that previously budgeted licensing revenue around Maxigesic IV which we see as basically delayed by additional regulatory questions. So we see that as occurring next year as opposed to this year. And in terms of a maiden dividend, look, we're still on track. The cash position is good and positive. We're normally always tighter in terms of cash flow in the first half and the second half we've always found this more positive. So even despite the extra spend, we're still looking at declaring a maiden dividend for the FY '23 financial year. So that is hopefully an overview to give you an idea of where we're at. And happy to try and answer any questions that you may have.

[Operator Instructions] Your first question comes from Soo Romanoff from Edison Investment Research.

Congratulations, nice performance here. I have a few questions here. It's great. In the first half, we had -- we were strong across almost all the regions, I think particularly in the domestic markets. Was this broad-based? Or is there any particular product categories that you want to highlight that drove this uptrend?

Yes, it's generally quite broad-based, actually. We had -- in New Zealand, we're having very strong allergy sales despite the rain. And on Australia, Maxigesic performed well. [indiscernible] one of their biggest segments, and that's sort of performed pretty solidly as well. Plus it had some new product launches in Australia, which had generally gone well, like the Maxigesic hot drink sachets went much well, much better than we thought, to be honest. So they really helped to contribute to Maxigesic sales. So really, it's not any one product. It's quite broadly based, which we always prefer because we think that's generally safer. We have quite a broad portfolio and just think that's much safer than being reliant on just one product or product line.

Yes. And even though it's strong, I think we're still waiting to the second half. And I think there's -- you mentioned several product launches, and I think there's some seasonality also here.

Yes, we traditionally always had stronger sales in the second half. And then on top of that, we've got additional product launches, which also will have a contribution. I mean, in Australia, for example, we just launched liposomal vitamins, which made a couple of months of sales contribution to the first half results. But really, the major contribution is going to start over this time period now, including going into the southern winter. We usually get quite good sales in March where we had our winter deals and winter sell ins. And we've got a number of winter products that we're launching into the Australian market. So sort of things like that will really shape the whole second half, really.

Yes. And for the second half, so it looks like we maintained our R&D guidance of $12 million for the year. So in the first half, we didn't spend as much. So can you give me a little bit more granularity, like the key drivers and programs for this uptick in the second half?

Yes. So it's -- the $12 million is that's the total cash spend, and it's roughly $6 million in the P&L and $6 million capitalized. So it's running about on track at the half year, the spend.

Okay, okay. Got it. I have a few more, but I'll just say one more last one since you probably have a lot of folks in queue. The FDA decision on Maxigesic IV, can you -- does that have any impact on the traction in any of your international markets? And how has that been in the performance for the overall portfolio across the regions?

Yes, it may have some impact on regulatory approval in Canada, where they may wait, which is -- they pay more attention to FDA. It doesn't really have any impact on other territories where we've got Maxigesic already approved across all of Europe presently, and we're just focusing on rolling it out. So I mean, we are -- the sort of thing with Maxigesic IV is it's a product that's a slow build because literally you have to get it in certain hospitals and then you get it in other hospitals, and it's literally kind of building it leg by leg. But once that sort of gets that momentum underway, it goes well. And we've seen sales in Germany, we had record sales last month. So generally, we're getting sales growth literally every month when we look at big markets, South Germany, Austria, we've got on a number of the guidelines and stuff, which is also part of the process, like it's on the guideline for Caesarian post-op, Caesarian pain relief. So sort of things like that, it's just very much a kind of rollout. And that's really the process that's underway. And look, this will be -- won't be an instantaneous thing, this will be 3-, 4-, 5-year project, really.

Your next question comes from Matt Montgomerie from Forsyth Barr.

Maybe firstly, I'll just start with the gross margin. I guess that was the key area of slight surprise for me, particularly given the strong OTC growth in New Zealand and Australia that you're talking to. So I guess on ex licensing income base and sort of 44%, I guess if you look in a pre-COVID world, it was quite volatile, but FY '19, you reported 47%. And if I cast my mind back to that time, commentary then was that sort of a reasonable steady-state guidance on a go-forward basis. So I guess my question is twofold. One, despite the strong OTC, Maxigesic principally just reflecting COVID impacts in the half, freight, etc.? And then two, is that prior guidance that you'd given to the market around that line still current in a post-COVID world or from F'24 as the sort of pressures abate?

Yes. Thanks, Matt. Longer term, we do see the margins improving into the late 40s. The suppression in this half, partly that was we have spent quite a lot of money updating products then. We've had the dip in the U.S. dollar come back now, but we did have to buy a little bit, which we will -- so we'll see that coming in the second half in our margins. So we think we're going to be lower in our margin in the second half. We don't think it will be up in the late 40s. So it may be a slight improvement in what we've seen in the first half as we go through. We have put some price increases in, so we will get a benefit from those. Again, it's easier to build on the OTC ones. And if we can, we are reviewing an opportunity, which we haven't put in forecast, but we are looking to see if we can put some more price increases in as well.

I mean we are seeing some changes in freight and shipping certainly on some of the major routes like China to LA, where they almost come back down to what they originally were. That certainly has not come through to Australia and New Zealand. They're not going up any longer. They're starting to come back. But our guess and our estimates in Australia, Australia will start to ease sooner, and New Zealand will ease later. So we're going to be behind the major markets, to be honest, in terms of shipping. So we should -- we would expect to see some improvement in shipping costs, which really have gone up a lot, like a 40-foot container used to be $6,000 to $8,000. And even at the moment, we're paying $26,000. There's quite a lot of difference in that, but that will ease going forward, and that will help margins as well.

That all makes sense. Maybe secondly, on the Australia business, another good half. On an annual basis, I guess you're approaching that $100 million revenue target that you had published previously. And arguably, you probably got there quicker than what people may have thought, as I said, continue to perform well. You can see a scenario here where it continues to grow quite strongly on the back of the new launches. Just interested in, I guess, broad-based comments you can provide on the trajectory of that business over the medium term, acknowledging that you sort of put out a target to the market today of $200 million for the group, but just more specifically on the Australia business...

Yes, we still see that growth continuing. To be honest, New Zealand surprised us at 35% on the positive side. And in Australia, we see there's a lot more growth potential, which is why we're doing increased focus on doctors in the Australian market with that additional in-house rep force we did. We've got one at the moment where we have -- we do pay for some other reps as part of a team, but we say it's better to bring that in-house, and that's what we're going to do from the start of next financial year to sort of increase our focus on the Aussie market. And yes, we see there's lots of potential going forward, and we want to make sure that we take advantage of that, really.

And do you have a feel for growth in that market organically over this period? Now you've got a lot of new products coming to market, primarily in that market. Just the breakdown, I mean, just what you're seeing in key products there today to give you confidence in that underlying.

Yes, [indiscernible] so most of their products, we're still seeing pretty good growth. We've obviously got quite a broad portfolio. We have got some products that are declining a bit, some are flat. But overall, we've still got organic growth. It's not just coming from new products. Because really, those new products, they are contributing. But yes, they don't contribute quite as much when they first launched and they contribute more as the growth starts and we certainly had some really good growth of some products we struggled with a bit introducing them in the COVID. Like we had kid's diarrhea product, DiaRelieve, which we're very confident in, and it actually didn't go that well. But now things have eased up in terms of travel and everything. And we're seeing that performing really well. So it is important we have access to hospitals and access to doctors and pharmacies, and that's what really hammered us during COVID period, to be honest.

[Operator Instructions] The next question comes from Christian Bell from Jarden.

Just the first question, I'm just trying to reconcile from your original guidance of $27 million to $32 million to the new range. So just firstly, when you had provided the guidance for $27 million to $32 million, what was your investment budget for the sales and distribution at that point? Now that it's $10 million, so what was it previously?

The change is -- that is the change. The change in the budget is $10 million in total.

Yes. So what was it when you set your original guidance to change? Is it more on...

I'll let -- so I have to come back to you on that one, Christian.

Do you see what I mean? If you had originally came on spending an additional $5 million and now you're planning on spending [ $30 million ] on additional team, that sort of explains $5 million of the change in the guidance?

Yes, it's something like that. I think it's higher than that, yes. I think -- I can take that out.

Okay. But sort of broadly, it's kind of -- and then secondly, I guess, the key driver would have been the change in licensing income. So you've gone from -- it's now $0.5 million to $2 million originally in that guidance, it was probably more like $7 million, from memory. So is that kind of the other $5 million?

Yes, 7-plus, yes.

Okay. So if we put those [ $30 million ] that basically explains the $18 million to $23 million.

The $9 million, there's more -- it's actually more skewed in more of its license. It's probably about $6 million, something like that. $6 million and $3 million, something like that.

Okay. Great. And then just secondly following up on that, are you -- so does that -- FY '22 plus $10 million sales and distribution budget, is that the new base level? And is that going to come back next year? Or is it kind of -- are you going to grow from there? Or what's going to hit [indiscernible]?

Yes. So the dollars will grow, but they will become a smaller percentage of revenue. When you launch a new product, a fairly big cost is what we call co-op, which is listing fees in the main buying groups, and that's a set fee. So when you first -- you have to put that money up before you get the distribution, but then that becomes just a much more acceptable and you see it in the first year, but then it just becomes business as usual as you go forward.

Promotional stuff around that, like, for example, Australia starting very soon, we've got what's on in the warehouse and they're doing a [indiscernible] selling the vitamins and things like that. So when we talk about co-op, it does also include that sort of activity as well, like in-store promotion going right now through to TV and things like that. And that ends up being more chunky relative to sales when you first launch, but once sales pick up, you still have to keep doing it. But then it doesn't really have the same impact on the P&L because you've got more sales and more gross profit from the launched products.

You get your leverage in years forward.

I mean, we could have decided to turn things back and done that sort of approach that manage our guidance number, but really, we thought -- what we really want to do is put our foot on accelerator and really hit that sales growth, which we think in the long term will have a much better impact on the overall business. And then that's really our strategy and just sort of finalized.

And the other step that we talked about is that the GP sales rep force, so that will be a fixed cost going forward. And the same thing, revenue will catch up to that and overtake it.

With the -- just looking at your Australasian product launch pipeline, you're actually planning on launching more products in FY '24 than FY '23. But I mean, does that sort of mean do we expect an additional $2 million again in FY '24? Or is it kind of flat?

We're actually right in the process of budgeting. We approved those in January time line. So as I said, yes, it's an -- the marketing will be an increase in dollars, but a reduction as a percentage of revenue.

The increase in dollars, we expect -- can we expect them to increase as large as another $10 million in FY '24?

No. Because the -- you've got the -- once we've hit that number for the marketing and co-op for these new products and then the rep sales force one, that will -- it'll go up by how much what salary increases, but it's fairly fixed in its nature like the other salary costs.

Okay. And then just curious as to the messages across what's kind of -- just interested in your recent discussions with -- if you're able to sort of ship the model that -- what are they saying to you? How are they sort of positioning themselves at the moment? Do they say it's quite a strong competitor to the paracetamol type of IV of products? Or are they expecting it to sort of cannibalize some of their opioids as well?

Yes. I mean they're still working through those. They've done an agreement with some -- with the sales company as well to further increase their reach in addition to what they really have. So that's certainly underway. So they are looking at doing quite a lot of promo around it as well, certainly in terms of that kind of work at the hospital level, which is what we've seen elsewhere as well. It takes a bit of work literally hospital by hospital. So they've done a lot of work with a local American company on that. So that's really the sort of point they're at. So -- and then looking -- we're looking to finalize the approval to sort of quarter 4 -- started quarter 4 or during quarter 4 next calendar year. And then after that, we'll look to launch it.

Your next question comes from Chris Steptoe from DMX.

Okay. Just a quick question on the gross margin. So overall, the gross management is 44% for products, excluding licensing. Can you just sort of break it down between what would international gross margin be?

It will be in that same range, around that 44% range. The main difference you'll get is it's really more in the channel. You'll see more of the difference between OTC, which is the best margins. But then obviously, that means sales and marketing spend behind it. And then the hospital and prescription will be a lower margin, but it doesn't need the promotional support.

There are no further questions at this time. I'll now hand back to Dr. Atkinson for closing remarks.

Thank you very much. That is, I think, all from us. And yes, [indiscernible] as we want to push our growth and want to take advantage of the opportunities we've got, which is behind our end licensing where we've done a lot of that over the last couple of years and really now is to push hard on the product launches and existing organic growth and really to push out to new sales territories from Maxigesic and the international markets and also to grow the existing markets. That's really where we're at, looking forward to that $200 million target as soon as possible. So thank you very much for your attention.

Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.