The Shore’s Best Kept Secret? - just got out!
There must be something in the North Shore water system that makes us want to start businesses out of our spare rooms or garages at home. Maybe it is just the enterprising and entrepreneurial spirit that living in such a fantastic part of the world, brings out in many of us. Whatever it is there are some real business success stories that have started this way on the sunny side of the Harbour Bridge. One business that is on its way to being one of the biggest spare room success stories is Takapuna based AFT Pharmaceuticals. AFT was started by Managing Director Hartley Atkinson in the spare room off his garage 14 years ago after he had been made redundant. Today the business turns over in excess of $40 million per annum, and it appears to have only just touched the global potential. Channel’s Aidan Bennett went to uncover the AFT Pharmaceutical story.
I heard a whisper about this home-grown North Shore drug business that was on the cusp of something big, a few months back. I thought about uncovering the story then, but other things got in the way. So when I saw the AFT Pharmaceuticals name come up as a finalist in the Design, Research & Development category of the 2011 Westpac Auckland North Business Awards, I decided it was definitely time to find out more.
A first impression when you meet Hartley Atkinson is that he doesn’t strike you as the stereotyped Managing Director of this type of business. He’s more like a laid-back middle-aged rock star with his long hair and creative look. In fact, if I was really honest, I would say that he looks somewhat out of place in his impressive office with fantastic views down over Takapuna Beach. But first impressions can be deceiving.
Hartley started AFT from the spare room off his garage with $50,000 of start-up money, shortly after being made redundant from his role as Medical Director at Swiss giant Roche, back in 1997. He was keen to start his own thing as he’d had enough of the corporate world.
Hartley Atkinson was educated at Westlake Boys and then went on to train as a Pharmacist and he completed a Doctorate in Pharmacology while studying at University in both Christchurch and Dunedin.
“I love the fact that even now I can walk to work in just a few minutes,” said Hartley Atkinson when quizzed about his desire to keep his growing business based on the Shore. “People overseas are amazed, as it is not uncommon for them to travel one to two hours to get to work each day. The Shore is also an easy location in which to attract skilled staff, as the majority of people are very keen to live and work on this side of the bridge. We have been able to develop a great team because of the environment in which we live and work in.”
Hartley Atkinson grew up on the North Shore. His family lived in Brett Avenue (Takapuna) which is exactly the same street where he and his wife Marree and their four children live today.
“I lived over the bridge for a while but managed to persuade Marree to come over from the dark side and we love it,” says Hartley. “It’s a great lifestyle and I am into Stand Up Paddling and Sailing, so my playground is right on the doorstep. I still sail a Sunburst with the kids at Wakatere Boating Club (Narrowneck).”
In fact Hartley sailed out of Wakatere as a youngster and was good enough to sail in the Europe Dinghy World’s. His other interests include Surfing and Skiing.
AFT Pharmaceuticals is a 100% locally owned by Hartley Atkinson Pharmaceutical Company. The AFT actually stands for “Atkinson Family Trust”. The company markets a range of generic pharmaceutical products and has also launched two of its first developments into the New Zealand market– a new analgesic called Maxigesic; and a novel treatment for allergic rhinitis called Maxiclear Hayfever and Sinus Relief. A third product, Crystacide, is a first aid cream. These products have been developed in New Zealand and Hartley Atkinson is proud of the fact that they were one of the first companies to say no to using pseudoephedrine and codeine.
Five years ago AFT totally operated in the New Zealand market. These days the balance is 60% New Zealand and 40% overseas. The company has 25 staff at the Takapuna headquarters. There are also 13 staff at the AFT office at Lane Cove in Sydney. There has been 50% growth in the Australian market over the past year. In addition there are joint ventures in China and Russia and the business is growing in Iraq and the Middle East, in many parts of South East Asia and also in Europe and Mexico. The export business is set to explode and Hartley believes it will quite quickly account for 80% of the sales.
“Pharmaceuticals is a long term game,” explains Hartley Atkinson. “We are carrying out lots of drug registration filing in Europe and the US offers huge opportunities as well. The process will be a long one, but it will be worth it. Dr Doug Wilson, our hugely experienced and worldly Chief Medical Officer, often reminds me of the following fact about the size of the US market: He says by morning tea on the first day of the year – January 1st – the US exceeds our total drug sales for the year. Just for those Aussies who are chuckling, he always adds that by afternoon on the second day of the year, they pass Australia. This gives you an idea of the scope and why the potential for us is offshore. But we will continue to drive it from New Zealand.”
So what has Hartley Atkinson learnt since setting up AFT Pharmaceuticals?
“I have learnt that whatever you do, it is not that easy. Particularly in this business. Persistence is the key. Being involved in sports like yachting, you learn that when shit happens you can handle it. As long as you aim high, keep learning and remain persistent, the results will come in the end.”
What are the strengths of the business?
“We have quite a few products with a point of difference,” says Hartley Atkinson. “Many of our products are innovative and different than those offered by the big companies. Innovation is very important. We have done this with Maxigesic – which combines paracetamol and ibuprofen to create an effective non-codeine painkiller. Because antihistamines don’t work well on a stuffed nose, we developed Maxiclear – which combines antihistamines with a nasal decongestant to great effect. Virtually all our research based products are developed in New Zealand by our five-strong R and D team, using resources such as the Auckland University Pharmacy Department. We make a substantial investment locally in clinical research and development. We manufacture in 10 countries around the world, including New Zealand, but at the end of the day the money comes back here, because this is our base and where the IP is held.”
What sort of advertising and marketing works for AFT Pharmaceuticals?
“We have a limited marketing budget because we spend as much as possible on R and D; hence we’re always short of dollars. We think of ourselves not so much as a marketing company, people want good pharmaceuticals, so we try to work on that – although some may have seen our new television ads, that I feature in. These have been developed locally by Marco Marinkovich and his team at Creativebank.
A problem is that people don’t always believe a smaller company can have a technically better product than a multinational giant. Crystacide is a good example, where we have about a 64% share, well ahead of the major multinationals. I believe this is because our product is just so much better. However we still have to advertise, otherwise no-one knows this!”
You have been very involved in the whole awards entry process yourself. Why did AFT Pharmaceuticals decide to enter the 2011 Westpac Auckland North Business Awards?
“To be very honest we are pretty frustrated at the low level of support we receive from Government bodies. We are looking to raise our profile a little bit, as I’ve heard we’ve been called ‘the best kept secret on the Shore’. We really just want to get on with the job. We find we get great reception in the boardrooms of some of the biggest pharmaceutical organisations in the USA, but little support at home. A common response is ‘oh well you don’t do everything here’. I believe that if it is to become truly international, New Zealand needs to grow up. Big pharmaceutical companies work with lots of parties and we need to do the same, using specialists and resources world-wide that can do the job. The awards also provide a great opportunity for our hard working team to see some outside recognition. Becoming a finalist in our first year entering is a great result.”
Any mistakes you have learnt from along the way?
“There isn’t any big one. A real positive, is that while we have made them we don’t dwell on them. We have gone as hard as we can to grow the business with available resources and that’s it. We have had failures for sure, but as long as we know that when you take an equation like the following – five plus five minus two equals eight – and you focus on the eight part and don’t dwell on the minus two, you will be much better off as a business. Many people in business beat themselves up over the negative part, but my attitude is ‘so what’. You learn from it and move on.”
Any words of wisdom you can provide for other business people, given your experience with building the AFT business to date?
“I am a bit wary about handing out advice as every business is different. For us, innovation is king. And persistence. Never give up. I loved the book that the 42 Below guys produced, which was called something like ‘Every Bastard Said No’. At times we feel the same. There were a few people who laughed at that guy in the garage all those years ago.”
What are Hartley Atkinson’s long term goals for AFT Pharmaceuticals?
“To keep growing, to become a substantial exporting company. We have a goal to be a $120 million business. Another, is to be the first New Zealand company to register/license an R and D based drug around the world – this is a work in progress. To register novel products in the USA and Europe – another work in progress. We really want to grow the R and D side and add to some of the licensing deals we have done already.”
For further information visit: www.aftpharm.com
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