The Mayne Pharma Group Ltd (ASX: MYX) share price will be on watch today following the release of a positive announcement this morning.
What did Mayne Pharma announce?
This morning the pharmaceutical company announced that it has signed a 20-year exclusive supply and license agreement with Mithra Pharmaceuticals to commercialise a novel oral contraceptive comprising Estetrol (E4) and drospirenone (DRSP) in the United States.
According to the release, the product is expected to be launched in first half of calendar year 2021, subject to US Food and Drug Administration approval. On approval the product is expected to receive five-year New Chemical Entity (NCE) exclusivity from the regulator, with potential for patent protection beyond 2030.
The release explains that E4/DRSP is a novel, next generation combined oral contraceptive composed of 15 mg E4 and 3 mg DRSP.
While E4 is a native estrogen produced by the human foetal liver during pregnancy, following more than 20 years of research and development, Mithra can now produce it at scale through a complex plant-based production process.
Under the terms of the agreement, Mayne Pharma will pay up to US$295 million comprising US$8.75 million in cash and 4.95% of Mayne Pharma’s ordinary shares at closing. The company will also pay US$11 million in cash and a further 4.65% of Mayne Pharma’s ordinary shares following FDA approval, plus contingent payments based on reaching cumulative net sales targets.
Mayne Pharma’s CEO, Scott Richards, was very pleased with this addition to the company’s portfolio.
He said: “I am excited to announce the addition of E4/DRSP, a next generation oral contraceptive, to our specialty brand portfolio and further strengthen our relationship with Mithra, who is also our partner for generic NUVARING. This transaction transforms Mayne Pharma and is highly consistent with our stated strategy to build our specialty business with durable, high growth novel products in core therapeutic categories leveraging our commercial capability and associated know-how in the US.”
“If approved, Estetrol (E4) will be the first native estrogen approved in a contraceptive product in the US and the first new estrogen introduced in the US in approximately 50 years. E4/DRSP is an innovative contraceptive with a unique mode of action that phase II and phase III studies suggest could result in improved patient outcomes. This product is expected to be a foundation asset in Women’s Health for many years to come and has a strong and synergistic fit with Mayne Pharma’s currently marketed portfolio of more than 20 branded generic contraceptives and existing pipeline products such as generic NUVARING for which we are targeting approval in calendar 2020,” he added.
There certainly is a large market opportunity for the drug. Management revealed that the US contraceptive market is valued at US$5.4 billion, with the short acting combined hormonal contraceptives component estimated at US$4 billion and approximately 135 million units sold annually.
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