The Acrux Limited (ASX: ACR) share price has taken off this morning, bolting out of the gates to be up by as much as 62.96% in early trade. At the time of writing, Acrux shares are still sitting 40.74% higher at 19 cents per share, taking its current market capitalisation to around $32 million.

Acrux is an ASX pharmaceutical share dedicated to developing and commercialising topical pharmaceuticals. The company currently has 3 pharmaceutical products approved and marketed, along with a portfolio of generic topical products in development. It was established in 1998 and its operations extend to the US and Europe.

Why is the Acrux share price shooting higher?

This morning, Acrux revealed it has entered into an exclusive sales, marketing and distribution agreement with US-based private company TruPharma. 

According to TruPharma’s website, “TruPharma has a proven track record of building niche product portfolios and getting difficult products FDA-approved and into the market”.

Subject to approval by the US Food and Drug Administration (FDA), TruPharma will be responsible for the commercialisation of 6 existing products from the Acrux pipeline. This includes the sponsorship and management of each FDA application, management of commercial manufacturing, marketing and distribution of each product.

The 6 products are at various stages of development and have not been lodged with the FDA.

In turn, Acrux and TruPharma will share the gross profits generated from the sales of the products. Unless otherwise agreed, the agreement for each product will have a 10-year term from launch.

Commenting on today’s update, CEO and managing director, Michael Kotsanis, said:

“We are excited to enter into this agreement with TruPharma and we look forward to developing a long-lasting relationship between the two companies. The agreement marks a significant step forward in achieving Acrux’s transition into the generics market.”

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Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Investors chasing long-term security generally look towards blue-chip ASX 200 shares. However, if you want to build wealth for life, then you need to look at companies with a lot of growth ahead of them.

If a share price is to grow by 10 times the initial investment, it needs to compound at a rate of at least 30% per year for 10 years. At the least this requires access to markets, good management, and the free cashflow to fund future growth.

Growth share examples

Over the past decade, most of the ASX shares that grew more than 10 times the initial investment shared a high growth rate in free cashflow. Altium Limited (ASX: ALU) achieved an average share price growth of 65% every year for 10 years. Jumbo Interactive Ltd (ASX: JIN) grew its share price by an average of 40% each year for 10 years. 

Both of these fantastic ASX shares had very high annual growth rates in free cashflow.

Building wealth for life

These 2 ASX 200 shares are growing their free cashflow at very high rates every year. They are all undervalued in my view, have strong share price momentum, and have potentially large markets to grow into. They may not grow by 10 times the investment over a decade, but they are likely to grow considerably nonetheless. 

TechnologyOne Ltd (ASX: TNE) develops online enterprise resource planning (ERP) systems for managing companies with a lot of physical assets. The company was a pioneer in this space and predominantly services councils, utilities and universities.

The potential market for this company in Australia alone is quite large. Its customers and internet delivery model make it resistant to events like the coronavirus pandemic. Moreover, it is still a founder-led company, which I always prefer.

EML Payments Ltd (ASX: EML) has been cashflow positive for the past 4 years. In that time it has grown its free cashflow at a very healthy rate. The core market for EML is gift cards in supermarkets. This is a high margin area and is likely to pick up as pandemic restrictions ease. Its share price has grown 18% per year, on average.

Foolish takeaway

If you are serious about creating wealth for life then, in my experience, part of your portfolio must be directed to early stage growth companies. These 2 ASX 200 shares are still in their growth phases. They have a very healthy level of cash flow growth, and have proven management teams in place. 

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Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Jumbo Interactive Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Emerchants Limited. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended Emerchants Limited and Jumbo Interactive Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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