Mayne Pharma Group Ltd (ASX: MYX) has far and away been one of the most outstanding performers on the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) this year. With its share price climbing by over 4% today, it has now gained a staggering 44% in 2016 much to the delight of shareholders.

The majority of these gains stem from the positive market reaction to the pharmaceutical company’s US$652 million acquisition of a portfolio of drugs from industry giant Teva Pharmaceuticals. Investors were unsurprisingly bullish with the deal that saw Mayne Pharma acquire 37 FDA-approved and five FDA-filed products for less than 6x forecast FY 2017 EBITDA.

I believe this bold move has transformed the company into a real pharmaceutical force and gives it incredibly strong growth prospects.

The reason for today’s gain is an announcement out of the company this morning related to a lawsuit against US-based Forest Laboratories that had been dragging on for almost three years.

In December 2013 Mayne Pharma filed a patent infringement lawsuit against Forest over its Namenda XR product. Today management announced a settlement agreement with Forest which will see Mayne Pharma record additional income of approximately US$19.5 million in FY 2017.

With its shares rising as much as they have, many investors will no doubt be wondering if they have missed out. Thankfully I don’t believe they have. I personally believe there is a long-term investment opportunity here for patient investors.

At 34x estimated FY 2016 earnings Mayne Pharma’s shares may be a touch expensive, but I do believe its future growth potential justifies paying a premium over the market and healthcare sector averages.

Right now I would put it up there alongside CSL Limited (ASX: CSL) as being one of the best investment options in the sector even after its incredible rise this year.

Lastly, before you head out and buy Mayne Pharma I would highly recommend you check to see if you own one of these three rotten ASX shares. Each could be harming your portfolio and might be best swapped out in my opinion.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.