Mayne Pharma buried its bad news a long way back in its presentation to investors on Monday, but when shareholders caught on their reaction was sharp.
Mayne Pharma’s shares plunged more than 10 per cent after it revealed sales for a flagship suite of US generic drugs would not meet guidance.
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The news was buried on on page 107 of a 110-page update released to coincide with an investor day the company was holding on Monday.
The company said in the investor update that tougher generic drug pricing was behind the revised guidance for the suite of drugs called the Teva portfolio.
Mayne Pharma chief executive Scott Richards. Photo: Josh Robenstone
Mayne bought the portfolio of drugs from pharmaceutical giant Teva Pharmaceuticals last year for $845 million. The aquisition saw Mayne’s first-half profit soar 278 per cent to $72.7 million in February.
Shares were trading at $1.20 on Monday afternoon down almost 11 per cent for the day wiping about $200 million off the market capitalisation of the company.
Mayne, which is worth more than $1.8 billion, re-affirmed its full-year profit guidance only a few weeks ago during its first half results in February.
Chief executive Scott Richards said at the time that the outlook for the group “continues to be positive with significant growth opportunities from recent acquisitions, new product launches, further business development activities and transaction-related revenue and cost synergies.”
He said the generic product division would benefit in the second half from a full six months’ contribution from the Teva product acquisition.
Mayne shares also dived in December on the back of a US price fixing lawsuit.
The civil complaint filed by 20 US states accuses six companies – including Teva and Mayne – of conspiring to artificially inflate prices on an antibiotic and a diabetes drug.