Rising Costs Could Challenge Mayne Pharma’s Strong Growth Momentum in FY25
Mayne Pharma reports a robust first half of FY25 with revenues climbing to $210-$215 million and underlying EBITDA soaring by up to 300%, driven by strong performance in Women's Health.
- 1H FY25 revenues expected between $210 million and $215 million, up 12-14%
- Underlying EBITDA forecasted at $30-$32 million, a 275-300% increase from 1H FY24
- Growth primarily fueled by Women's Health portfolio and improved Dermatology margins
- Cash reserves at $124.9 million as of 31 December 2024, slightly down due to timing of payments
- Anticipated continued growth in 2H FY25 despite seasonal cost pressures and increased promotional spend
Strong Revenue and Earnings Growth
Mayne Pharma Group Limited (ASX: MYX) has delivered a compelling market update for the first half of fiscal year 2025, signaling a period of significant financial momentum. The company anticipates revenues in the range of $210 million to $215 million, marking a solid 12 to 14 percent increase compared to the same period last year. More strikingly, underlying EBITDA is expected to surge by 275 to 300 percent, reaching between $30 million and $32 million.
Drivers Behind the Performance
This impressive earnings growth is largely attributed to the continued expansion of Mayne Pharma's Women's Health portfolio, which has benefited from increased operating leverage. Additionally, the Dermatology segment has contributed to margin improvements, primarily through a more favourable product mix. The company emphasizes that the strong performance observed since its November 2024 AGM should be considered reflective of the entire half-year period, rather than a short-term spike.
Financial Position and Outlook
As of 31 December 2024, Mayne Pharma held cash and marketable securities totaling $124.9 million, a modest decrease of $4.6 million since the last report in October 2024. This reduction is attributed to the timing of gross-to-net (GTN) payments. Looking ahead, the company expects to maintain its growth trajectory into the second half of FY25, although it anticipates some seasonal cost impacts related to patient payment programs and an increase in promotional expenses aimed at further boosting the Women's Health segment.
Management Commentary and Next Steps
CEO Shawn Patrick O'Brien expressed confidence in the company’s strategic execution, highlighting the robust trading conditions and the strength of the Women's Health segment. He indicated that a more detailed update will be provided during the full half-year results presentation scheduled for 26 February 2025, which will include insights from CFO Aaron Gray during a webcast event.
Investors should note that these preliminary results remain subject to auditor review and board approval, with the company cautioning that forward-looking statements carry inherent uncertainties. Nevertheless, the current outlook positions Mayne Pharma as a specialty pharmaceutical company capitalizing effectively on its innovation and market presence.
Bottom Line?
Mayne Pharma’s strong first-half momentum sets the stage for a pivotal FY25, with growth tempered by upcoming cost pressures.
Questions in the middle?
- How sustainable is the rapid EBITDA growth beyond FY25 given increased promotional spending?
- What specific products within the Women’s Health portfolio are driving the strongest gains?
- How will seasonal patient payment program costs impact cash flow and margins in the second half?
