AFT Pharmaceuticals initially made hay from the Covid-19 outbreak as, last March, it sold a year's worth of vitamin C supplements in just three days.
The Auckland-based, NZX-listed drug and health supplement maker bumped up guidance to the top of its range, then hit its target as it reported operating earnings of $21.2 million for FY2020.
But now the drawn-out pandemic has turned into a drag, with Covid-related delays and disruption blamed for a profit warning issued this morning.
The Auckland-based, NZX-listed drug and health supplement maker cut operating profit guidance to a $9m to $11m range for its financial ending March 31.
Its previous guidance reaffirmed in November was for operating earnings between $14 million and $18m.
Last year, AFT reported operating earnings of $11.4m.
Despite trimming its earnings expectations, the company expects full-year FY2021 revenue to increase 4 per cent to around $110m.
"We are disappointed to be revising our guidance, a move which, to a large extent, reflects delays to licensing negotiations we expected to conclude in the 2021 financial year," AFT managing director Dr Hartley Atkinson said.
"The discussions have been hampered by Covid-19 related travel restrictions and the difficulties collaborating across different time zones."
Atkinson said he now expected negotiations to conclude in FY2022. He expected, but could not guarantee, successful outcomes.
The profit warning was issued before the market opened. AFT shares had been on a bull run this month, rising from $4.17 to $4.95, and were up 27 per cent for the year.
The stock dropped 12.2 per cent to $4.35 in early trading.
The downgraded outlook also reflects "a broad range of pandemic-related disruptions that by themselves have not taken a material toll on individual business lines, but over the last quarter have cumulatively weighed on our financial results," Atkinson said.
"These disruptions have affected the production and shipping of our Maxigesic pain relief medicine from our suppliers. Several Maxigesic launches have taken longer than expected or have been pushed from February or March into the next financial year."
Travel-restrictions have delayed regulatory audits of production facilities resulting in flow on delays to Australian launches of key new products," Atkinson said.
"We have pivoted to minimise these disruptions by seeking alternative sources of supply and innovated to sell products such as facemasks and developed our long-lasting hand sanitiser Crystawash Extend.
"Despite the pandemic we have concluded eight new licensing agreements, covering 22 territories for Maxigesic IV pain relief medicine and four new agreements covering four territories for the oral form of the medicine. As announced earlier in March, Pascomer, has been licensed in 30 countries across Europe."
AFT expects to report its full-year result during May.