New Zealand's Court of Appeal has dismissed an appeal by PBL Solutions regarding the entitlement to profits from AFT Pharmaceuticals' (ASX:AFP) topical skin treatment, Pascomer.
The ruling upholds a 2023 High Court decision which found that AFT was not required to share revenue with PBL for the commercialisation of the drug in treating non-orphan conditions, specifically Port Wine Stains.
The dispute centres on the scope of AFT Orphan Pharmaceuticals, a joint venture in which PBL—a company linked to a former AFT contractor—holds a 35% stake.
While PBL argued for a broader profit-sharing agreement, the court affirmed that the PWS application falls outside the "orphan" designation intended for the subsidiary.
Despite the dismissal, AFT confirmed it will maintain its existing obligation to provide PBL with 35% of any profits derived specifically from orphan drug applications of Pascomer.
AFT Pharmaceuticals, which is dual-listed on the NZX and ASX, noted that the market for PWS is larger than the drug's original orphan indication for facial angiofibroma, representing roughly 36 times the patient potential.
AFT stated the judgment is not expected to have a material impact on its FY26 earnings guidance, which remains on track for an operating profit between $20 million and $24 million.