It's fair to say shareholders of Adelaide-based pharmaceutical company Mayne Pharma Group Ltd (ASX: MYX) are having a great day. Its share price surged 9.5% higher this morning to $1.73 following the launch of yet another product in the United States.
Hot on the heels of yesterday's joint announcement with IDT Australia Limited (ASX: IDT), which revealed that IDT's generic temozolomide brain cancer drug is ready for launch into a US market worth an estimated $205 million per year, Mayne Pharma announced today that it has launched its morphine sulfate extended-release (MSER) tablets in the United States.
The drug is a generic version of MS Contin which is an opioid analgesic used for moderate to severe pain management. According to the release U.S. brand and generic sales of MSER tablets were approximately US$280 million for the 12 months ending 31 August 2016.
This is just one of a number of generic drugs that the company will launch in the foreseeable future. Thanks largely to the portfolio of drugs the company acquired from pharmaceutical giants Teva Pharmaceutical and Allergan this year, Mayne Pharma currently has a pipeline of more than 40 generic and branded drug products.
Management estimates that this pipeline has annual sales potential in the US market of greater than US$7 billion at present.
So with Mayne Pharma's share price down 15% in the last 30 days, I'm not at all surprised to see its shares rally on this news. As I said a few days ago, now could be an opportune time to make an investment in this exciting company.
It has enormous long-term growth potential in my eyes, and at under 18x estimated FY 2017's earnings I think it is a great and cheaper alternative to industry heavyweight CSL Limited (ASX: CSL).
