ASX:ACR
One to watch
November 12, 2024
Acrux
:
Chasing a US$1.1 billion market opportunity

Venn Brown sat down with Michael Kotsanis, CEO of Acrux, todiscuss the company’s growing portfolio of generic topical pharmaceuticals.

Growing generics portfolio: Acrux has brought five products to market, with a further ten in various stages of development, including two the company expects to launch by March 2025.

Like all generic drug developers, Acrux is focused on building value through a portfolio of topical pharmaceuticals rather than developin gone high-return single drug. Acrux assesses each drug based on a business case assuming only a five-year product life, leaving significant upside as the drugs are expected to remain on the market for substantially longer.

Topicals have less competition: Topical pharmaceuticals are more complicated than oral and injectables, resulting in fewer competitors in the generics space. With generics representing approximately 90% of all US subscriptions, fewer competitors mean larger market share opportunities and less pricing pressure.

Market size: Acrux is targeting a US$1.1 billion US market for its topical drugs, more than 50% of which have no existing generics. As a single market with structurally higher pricing, Acrux is focused on the US but can leverage FDA approvals to expand into other geographies.

Cash flow: Acrux has had positive cash flow for four of the last eight quarters. Cash flow will continue to fluctuate as the companybuilds out its portfolio. The company has a medium-term goal to be cash flow positive but is focused on building value by growing its portfolio rather than achieving immediate profitability.

Beneficial tax structure: Acrux is a pooled development fund, an old Australian tax structure that means all distributionsand capital gains are tax-free.

Outlook: Acrux is looking to build a steady cadence of launching around two new products a year. Over the next five years, it expects to bring its remaining eleven products to market while replacing them with ten new drugs in its development pipeline.

Acrux has a long history of gaining FDA approval & bringing drugs to market

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