Here’s Why Mayne Pharma Group Ltd (ASX:MYX) Shares Got Hit Today

November 29, 2018

Owen Raszkiewicz

Owen is the Chief Investment Officer of Rask Invest and Founder of Rask. Since founding The Rask Group in 2017 in the hillside suburb of Upwey, Victoria, Owen has overseen the growth of the Rask platform to over 200,000 investor followers. Today, Owen oversees the Rask Analyst team, which helps more than 4,000 Aussies build core portfolios from ETFs and shares, he hosts Australia's biggest investing podcast, The Australian Investors Podcast, appears on Rask's other channels, covering Property, Business and Finance; and leads Rask Education - our education platform which has enrolled over 25,000 Australians into free finance courses. Prior to founding Rask, Owen was an investment analyst at the highly regarded managed funds research business and a writer/analyst for one of the most well-known share market publications. Owen’s formal qualifications include a Master of Applied Finance and Master of Financial Planning from Kaplan Professional, Bachelor of Technology (Information Systems) from Swinburne University of Technology, Advanced Diploma of Financial Services (Financial Planning) and Diploma of Mortgage Broking Management. He's also completed level 1 of the Chartered Financial Analyst (CFA) program.

More analysis

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.

What Happened?

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.

What now?

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).

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