ASX-listed Mayne Pharma Group Ltd (ASX: MYX) shares were trading sharply lower today despite the broader market or ASX 200 (INDEXASX: XJO) rising 0.5%.
Mayne Pharma is Australian specialist pharmaceutical company, creating commercialised and generic products you’ll find in pharmacies across Australia. Mayne Pharma’s history started in South Australia. Today, it develops most of its drugs in Australia and the USA.
In a statement to the ASX, Mayne Pharma released notes from its Annual General Meeting (AGM) including the CEO and Chairman’s addresses.
Chairman Roger Corbett gave an update on USA Department of Justice Investigations into the sale of generics products.
“As you may recall, Mayne Pharma and a number of other generic pharmaceutical companies have been sued in civil complaints in the US alleging anticompetitive conduct in the sale of certain generic products,” Corbett said.
“The specific allegations relating to Mayne Pharma focus on the doxycycline hyclate delayed-release market as well as allegations that all defendants were part of an overarching, industry wide conspiracy to allocate markets and fix prices,” Corbett added.
While Corbett said the board believes the investigations will not have “a material adverse effect on the company’s financial position” he added the company has, “strengthened our compliance culture, enhanced training programs and continued our work to embed compliance into the Company’s everyday work practises.”
Talking to the trading performance of Mayne Pharma so far in 2019, Mayne Pharma CEO Scott Richards said the company has had a good start to the financial year with revenue up 21% in the first four months of the financial year.
However, cash flow was down 10% year over year thanks to an extension in trading terms and a working capital build for the acquisition of generic Efudex.
Despite the upbeat revenue result it seems the market isn’t satisfied with Mayne today — the Mayne Pharma share price was down 10% in afternoon trading. Perhaps the market was expecting too much?
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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).