Mayne Pharma shares partly recover after difficult week
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The news: Mayne Pharma shares were rallying on Friday, partly reversing deep losses this week amid a tussle with the ASX and a threat from US-based Cosette Pharmaceuticals that it might walk away from its $672 million takeover of the Australian company.
The numbers: Mayne Pharma shares were up 8.51% to $4.72 at 2pm AEST but are still down significantly over the week. They fell almost 30% on Wednesday after announcing the takeover by Cosette was at risk after the US company invoked material adverse change concerns.
Shares fell a further 4.4% on Thursday after Mayne was forced to respond to an ASX query flagging a potential breach of continuous disclosure rules.
The context: The ASX query related to a letter from the US Food and Drug Administration (FDA) raising concerns that Mayne Pharma misrepresented the risks of its Nextstellis birth control pill in a promotional presentation. In response, Mayne Pharma said it did not disclose the FDA letter to the exchange because it didn’t affect the company's ability to sell or distribute in the US.
Mayne made a similar statement about the FDA letter to the ASX last Wednesday after the letter also triggered a sharp fall in its share price.
Cosette believes a material adverse change has occurred at Mayne and cites the FDA letter as one of the reasons underpinning its concerns. However, The Australian reported on Friday that Cosette is unlikely to walk away from the deal given it has spent about $15 million on due diligence.
