Mayne Pharma shares keep sliding amid ASX questioning
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More news: Shares in Mayne Pharma have continued to slide after the drug company was forced to bat away ASX concerns it had breached continuous disclosure rules by not telling the exchange about a letter from the US Food and Drugs Administration.
Mayne reasserted that it does not believe the concerns in the letter were materially significant, as it previously told the exchange, even as US-based Cosette Pharmaceuticals threatens to back out of a takeover of the Australian company.
The numbers: Mayne’s share price had fallen 3.08% to $4.41 at 10:51am AEST, the lowest this year. The stock is down 39.4% since its 1 April peak of $7.28.
ASX questions Mayne over possible disclosure breach
The news: Mayne Pharma has reiterated that a US Food and Drug Administration (FDA) letter was not materially significant in response to an ASX query that flagged a potential breach of continuous disclosure rules.
The Australia drug company's statement comes a day after its share price plummeted on news that Cosette Pharmaceuticals had initiated a review of its planned $672 million acquisition of Mayne over a "material adverse change" in its financial situation.
The context: The ASX had asked Mayne why it had made Cosette aware of the FDA letter, which made claims that the company underrepresented the risks of its oral birth control pill, but told investors in an ASX announcement earlier this month that the information was not "materially price sensitive".
In its response, Mayne reiterated that it did not notify the exchange of the FDA letter because it relates to “one speaker presentation for [birth control pill] NEXTSTELLIS” and does not affect its ability to continue selling and distributing in the US.
The Adelaide-based company said it continues to comply with the ASX’s requirement to disclose any information that a reasonable person would expect to have a material effect on the price or value of its shares.
Mayne said it shared the letter with Cosette on 5 May, about a week after receiving the FDA letter under its scheme implementation deed obligations but that this does not include a materiality threshold.
On Wednesday, Mayne notified the exchange that Cosette had named the FDA letter as one of the reasons it invoked material adverse change concerns, a precursor for renegotiating and potentially scrapping its $672 million takeover bid.
The source: ASX
