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More Mayne pain points to tough FY20

Alex Druce
Mayne Pharma has endured a tough start to FY20 with revenue and profit down on last year

Mayne Pharma's share price has plummeted by as much as 14 per cent in the wake of a dire trading update, making the drugs manufacturer the worst performing ASX/200 company in early trade.

Mayne said on Friday that profit for the first four months of the financial year had slipped by a third, with the company blaming the pressures of a volatile US market and declining to issue full-year guidance.

Revenue from July to October fell 16 per cent to $153.6 million compared to the same period a year ago, while gross profit dipped 33 per cent to $72.3 million as disruption in the US generic drugs industry continues to hurt its bottom line.

Chairman Roger Corbett expressed his disappointment in the performance at Mayne's annual general meeting in Melbourne, which follows a doubling of the company's full-year losses in FY19 and a 76 per cent share price decline over the space of 13 months.

Mayne's ASX-listed shares fell by as much as 13.76 per cent to a near three-month low of 47 cents at Friday's open, and were still 9.17 per cent lower at 49.25 cents by 1115 AEDT.

"Your board and management team, who are significant shareholders in Mayne Pharma, are well aware of this and remain focused and highly motivated to turnaround performance and generate shareholder value," Mr Corbett will say.

Mayne's three-year share price decline from an historic high of $2.11 follows its fraught expansion into the US generic drugs market, with the company's 2016 acquisitions from Teva Pharmaceutical Industries and Allerga since weighed down by continued disruption and stiff competition.

Mayne slumped to a net loss of $280.8 million last year as it continued to struggle during an "extremely challenging" time for the US generic market, while also being forced to make a writedown of $351.7 million following a detailed review of its "intangible assets".

Scott Richards said in light of continued volatility, Mayne Pharma would not provide full-year earnings guidance.

"As you know, in the last few years our results have been volatile due to the many factors that can impact performance in any period such as the timing of FDA approvals, competitor launches and withdrawals on key products," Mr Scott says in his address to shareholders.

The company says it is confident the company's medium-term outlook will be improved by the recent 20-year supply and licence agreement with Belgium-based Mithra Pharmaceuticals to commercialise a "next generation" contraceptive pill.