Profit up 278%! But the Mayne Pharma Group Ltd share price is going NOWHERE

The Mayne Pharma Group Ltd (ASX:MYX) share price is trading flat today after the fast-growing pharmaceutical company reported a stunning 278% rise in net profit. Here's what you need to know…

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Mayne Pharma Group Ltd (ASX: MYX) share price is flat today at $1.50 after the fast-growing pharmaceutical company reported its half-year results.

Key highlights include:

  • Revenue of $294.8 million, an increase of 132% on the prior corresponding period.
  • Reported EBITDA of $129.2m, up 217%.
  • Reported net profit after tax of $72.7m, up 278% on the first-half of FY 2016.
  • Earnings per share of 5.2 cents.

Following the acquisition of the Teva product portfolio, the Generic Products Division (GPD) was unsurprisingly the star performer for the company.

During the half the GPD segment's sales were $222.6 million, up a whopping 399% on the prior corresponding period. Furthermore, gross profit in the segment rose 377% to $125.8 million.

The key drivers of the strong result were the performances of its dofetilide, butalbital, hydrocodone, and methamphetamine drugs. Its dofetilide drug in particular was a highlight, becoming Mayne Pharma's largest selling generic product.

Dofetilide now represents 17% of the segment's revenue and has become the market leader in terms of volume share, commanding over 55% of total prescriptions in the dofetilide market according to management.

As expected, Mayne Pharma's Specialty Brands Division (SBD) had a disappointing half. Due to the loss of market exclusivity for its Doryx acne treatment, sales in the segment fell 38% to $26.8 million.

Finally, its Metrics Contract Services division posted a 20% jump in revenue to $28.1 million and its Mayne Pharma International division saw revenue rise 10% to $17.3 million.

What's next?

The company has a global development pipeline that includes 50 products. Around 40 of these products are targeting the U.S. market with total sales potential in excess of US$6 billion a year.

Furthermore, Mayne Pharma has 19 products waiting for FDA approval with total sales potential of over US$1.3 billion.

Is it a buy?

Whilst there are concerns over what impact President Trump will have on the pharmaceutical industry, I believe Mayne Pharma's current share price and its incredible growth provides investors with a compelling risk/reward.

In light of this I would put the company up there with CSL Limited (ASX: CSL) as one of the best buy and hold investments in the industry.

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.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »