Cosette Deal Dispute and Patent Lawsuits Cloud Mayne Pharma’s Financial Recovery
Mayne Pharma reported a 5% revenue increase to $408.1 million for FY25 but posted a net loss of $93.8 million, narrowing from the prior year. The company’s planned acquisition by Cosette Pharmaceuticals faces legal hurdles, delaying completion.
- 5% revenue growth to $408.1 million in FY25
- Net loss after tax improved to $93.8 million from $174.2 million
- Women’s Health segment revenue up 25%, Dermatology down 12%
- Acquisition scheme with Cosette Pharmaceuticals delayed by court dispute
- Executive pay aligned with shareholder value through performance incentives
Financial Performance Highlights
Mayne Pharma Group Limited has released its financial results for the year ended 30 June 2025, revealing a modest 5% increase in revenue to $408.1 million. Despite this top-line growth, the company reported a net loss after tax of $93.8 million, an improvement from the previous year’s $174.2 million loss. The narrowing loss reflects operational improvements and cost management, though profitability remains elusive.
The company’s Women’s Health division was a standout performer, delivering a 25% increase in revenue to $178.4 million and a 76% surge in direct contribution to $62 million. This segment’s growth was driven by unit sales expansion across its branded portfolio, including NEXTSTELLIS®, ANNOVERA®, IMVEXXY®, and BIJUVA®. Conversely, the Dermatology segment experienced a 12% revenue decline to $154.1 million, impacted by competitive pressures and insurance coverage losses, while the International segment grew 7% to $75.6 million, supported by strong demand for products like KADIAN® in Canada.
Acquisition Scheme and Legal Challenges
Mayne Pharma’s strategic trajectory is currently overshadowed by a protracted acquisition dispute with Cosette Pharmaceuticals, Inc. The proposed scheme of arrangement, under which Cosette would acquire Mayne Pharma for $7.40 per share, has been delayed following Cosette’s attempts to terminate the Scheme Implementation Deed (SID) citing alleged material adverse changes. Mayne Pharma has rejected these claims and initiated legal proceedings to enforce the agreement. The second court hearing necessary to approve the scheme has been postponed to mid-late October 2025, pending resolution of the dispute. Additionally, Foreign Investment Review Board (FIRB) approval remains outstanding, adding further uncertainty to the timeline.
This legal impasse leaves Mayne Pharma as an ASX-listed entity for the foreseeable future, with shareholders having overwhelmingly voted in favor of the scheme at the May 2025 meeting. The outcome of the court proceedings will be pivotal for the company’s future ownership and strategic direction.
Operational Developments and Product Acquisitions
During FY25, Mayne Pharma expanded its US dermatology portfolio by acquiring the rights to TWYNEO® and EPSOLAY®, topical treatments for acne vulgaris and rosacea respectively. These additions complement the company’s focus on branded women’s health and dermatology pharmaceuticals.
The company also continued to invest in its Australian manufacturing facility in Salisbury, completing a modernisation project with new equipment installations supported by a $4.8 million federal government grant. Operational efficiencies contributed to inventory reductions and working capital improvements, partially offsetting cash outflows related to earn-out payments and deferred consideration liabilities linked to prior acquisitions.
Executive Remuneration and Governance
Mayne Pharma’s remuneration framework emphasizes alignment with shareholder interests, combining fixed salary with performance-based short-term and long-term incentives. The CEO and CFO received no increases in fixed remuneration but are eligible for retention bonuses contingent on the completion of the Cosette acquisition. The Board reduced Non-Executive Director fees by 10% following benchmarking against comparable companies in Australia and the US.
The company maintains robust governance practices, including detailed risk management policies addressing market competition, regulatory compliance, intellectual property, and ongoing litigation risks. Notably, Mayne Pharma faces patent infringement lawsuits related to its women’s health products and investigations by the US Department of Justice concerning federal healthcare claims.
Outlook and Market Implications
Looking ahead, Mayne Pharma plans to leverage its Women’s Health portfolio for continued growth in FY26, with targeted marketing and sales investments. The Dermatology division aims to pursue accretive business development opportunities, while the International segment focuses on expanding export revenues and operational integration.
The resolution of the Cosette acquisition dispute remains a critical near-term catalyst. Investors will be closely watching court proceedings and regulatory approvals, which will determine whether Mayne Pharma transitions to private ownership or continues as a standalone listed company. Meanwhile, ongoing patent litigation and regulatory investigations pose risks that could impact future earnings and valuation.
Bottom Line?
Mayne Pharma’s FY25 results show progress but the looming Cosette acquisition dispute and patent litigations keep the company’s future uncertain.
Questions in the middle?
- Will the court uphold Mayne Pharma’s position and allow the Cosette acquisition to proceed?
- How will ongoing patent litigation against generic competitors affect Mayne Pharma’s women’s health franchise?
- What impact will regulatory investigations and legal costs have on future profitability and cash flow?
