Legal Battle Looms as Cosette Seeks to End Mayne Pharma Scheme Amid Breach Claims
Mayne Pharma has firmly rejected Cosette Pharmaceuticals’ notice attempting to terminate their merger agreement, setting the stage for a potential courtroom showdown over the disputed deal.
- Cosette alleges a Material Adverse Change triggering termination rights
- Mayne Pharma denies any breach or adverse change, calling termination invalid
- Cosette issues additional breach notice threatening further termination
- Mayne Pharma plans to challenge termination legally and enforce rights
- Company remains committed to completing the scheme and updating shareholders
Background of the Dispute
Mayne Pharma Group Limited (ASX, MYX), a specialty pharmaceutical company, finds itself embroiled in a significant contractual dispute with Cosette Pharmaceuticals, Inc. The conflict centers on a Scheme Implementation Deed (SID) agreed upon earlier this year, which outlines the terms for a proposed corporate scheme. On 17 May 2025, Cosette claimed that a Material Adverse Change (MAC) had occurred, triggering provisions that could allow them to terminate the agreement.
Following this, Cosette escalated the matter by issuing a formal notice purporting to terminate the SID under specific clauses. This move has been met with strong resistance from Mayne Pharma, which categorically denies any material adverse change or breach of warranty that would justify such termination.
Mayne Pharma’s Response and Legal Posture
Mayne Pharma, supported by its advisors, has reviewed Cosette’s termination notice and accompanying breach allegations. The company has publicly rejected the termination as invalid and reiterated its stance that no material adverse event has occurred. Furthermore, Mayne Pharma has reserved all rights to enforce the SID, including seeking judicial intervention to challenge the validity of Cosette’s actions.
In addition to the initial termination notice, Cosette issued an additional notice alleging a breach of Mayne Pharma’s representations and warranties, threatening further termination if the alleged breach persists. Mayne Pharma is currently considering this new claim and promises to keep the market informed of any developments.
Implications for Shareholders and the Scheme
Despite the dispute, Mayne Pharma remains committed to completing the scheme in the best interests of its shareholders. The company assures that all relevant financial information has been disclosed, including its recent earnings announcement. It also plans to seek court approval for supplementary disclosures to keep shareholders fully informed.
Shareholders are advised that no immediate action is required concerning the termination notices. Mayne Pharma has established a dedicated shareholder information line to address any queries, underscoring its commitment to transparency amid the ongoing uncertainty.
Looking Ahead
The unfolding dispute introduces a layer of legal and regulatory risk to the proposed scheme’s completion. The outcome will likely hinge on court rulings regarding the validity of Cosette’s termination claims and the interpretation of the SID’s provisions. Market participants will be watching closely for further disclosures and any signs of escalation or resolution.
Bottom Line?
The battle over the scheme’s fate is just beginning, with legal challenges poised to shape Mayne Pharma’s next chapter.
Questions in the middle?
- Will the court uphold Cosette’s termination notice or side with Mayne Pharma?
- What specific events or conditions does Cosette cite as constituting the Material Adverse Change?
- How might this dispute affect the timeline and terms of the proposed scheme for shareholders?
