The Mayne Pharma Group Ltd (ASX: MYX) share price is down 15% in early trade after giving a trading update.
Mayne Pharma is Australian specialist pharmaceutical company, creating commericialised 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.
Why Mayne Shares Are Down Heavily
The company said that its sales have been impacted by additional competition on generic products and generic market trading pressures.
Mayne showed that in the four months to April 2019 its reported revenue has fallen by 15% to $154.1 million and reported gross profit has fallen 20% to $78.6 million with the group gross profit margin also falling by 4% to 51% from 55%.
Mayne Pharma CEO Scott Richards said: “Our generic business has faced a challenging start to calendar 2019 driven by competitive pressure on our key products including liothyronine and dofetilide.
We have also faced typical wholesaler destocking in the retail channel in the first calendar quarter, one-off failure-to-supply penalties emanating principally from products supplied by third party manufacturers, together with shelf stock adjustments resulting from price changes on some products.”
However, on a more positive note the company expects stronger FY20 results to be driven by recent specialty brand launches of TOLSURA and LEXETTE, growth of the generic and proprietary dermatology and women’s health portfolios, potential market supply disruptions and the pipeline of committed Metrics Contract Services business.
But it seems as though the company is warning of an accounting impairment charge in the meantime, “A detailed review of the carrying value of generic acquired and development intangible assets will be undertaken at 30 June 2019.
Is Mayne Now A Buy?
I don’t know enough about Mayne to say whether it’s a buy today or not. It’s obviously lower than it was yesterday but it seems as though the price drop is justified.
But, I know I would rather own one of the reliable ASX shares in the free report below because of their proven long term growth track record.
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