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Is the Mayne Pharma Group Ltd share price in the buy zone after today’s news?

Unfortunately for its shareholders this morning the Mayne Pharma Group Ltd (ASX: MYX) share price has tumbled lower despite the release of a positive announcement.

In early trade the pharmaceutical company’s shares are down almost 2% to $1.02.

What was the announcement?

This morning Mayne Pharma announced that it had gained approval from the U.S. Food and Drug Administration for its Abbreviated New Drug Application for doxycycline hyclate immediate release tablets.

As a result the company has immediately commenced a commercial launch to customers in the United States.

Doxycycline hyclate immediate release tablets are generic versions of Acticlate tablets. Acticlate is a tetracycline-class antibacterial indicated for the treatment of a number of infections, including adjunctive therapy in severe acne.

According to the release, annual sales of the Acticlate in the United States were approximately US$250 million for the twelve months to April 2017.

Should you invest?

Whilst the sales from this drug are unlikely to move the needle significantly in the future, it is just one of a number of drugs that Mayne Pharma has in its pipeline.

Management estimates that it markets more than 50 products and has a growing pipeline of more than 40 products targeting markets with sales of greater than US$7 billion.

Clearly there is significant growth potential from these drugs if things stay the same way. However, with President Trump intent on cutting the price of generic drugs, it is difficult to gauge the impact this will have on its future sales.

Whilst I believe Mayne Pharma is likely to be a great long-term buy and hold investment, I’m not convinced that its share price has found its bottom yet. Especially with short interest continuing to rise.

So for this reason I would suggest investors hold off an investment for the time being and focus on other healthcare shares like CSL Limited (ASX: CSL) and Ramsay Health Care Limited (ASX: RHC).

As well as Ramsay and CSL, these growth shares could also be great buy and hold investments in my opinion.

Each has been growing like wildfire and I expect more of the same in the future.

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