AFT Pharmaceuticals Limited [NZX: AFT; ASX: AFP] advises that British Virgin Islands incorporated PBL Solutions Limited, the 35% shareholder in AFT’s 65% owned subsidiary AFT Orphan Pharmaceuticals Limited, has filed legal proceedings in the New Zealand High Court against AFT and Dr Hartley Atkinson. AFT disclosed this as a potential claim in its FY2020 results announcement dated 20 May 2020 and also in the notes to its FY2020 financial statements.
The substance of the claim is that AFTO rather than AFT, should have had the opportunity to pursue the drug development opportunity in respect of Pascomer, and that AFT and Dr Atkinson breached contractual and other obligations in pursuing that opportunity through AFT.
The proceedings seek an account of the profits made by AFT in relation to Pascomer, including an account of future profits, or alternatively damages in an amount to be quantified.
Pascomer is a drug development project that if successful has the potential for the topical treatment of Facial Angiofibromas in Tuberous Sclerosis and was the subject of a market announcement by AFT on 4 November 2019.
To date AFT has invested in excess of NZ$5.6 million in the Pascomer drug development project. AFT expects it to be about four years before Pascomer’s commercialisation potential is able to be determined, FDA and any other required regulatory approvals obtained, and any sales achieved.
AFTO was established in 2011 by AFT and PBL through its founder, Mr Giles Moss, at that time a contractor to AFT, based in Malaysia. AFTO was established as a vehicle for its shareholders to share profits from the marketing and distribution of orphan drugs only, and only in the Southeast Asia region.