The Mayne Pharma Group Ltd (ASX: MYX) share price has fallen 2.82% to 34 cents in early trading today, after the company reported a 9% drop in revenue for the first four months of FY21.
Mayne Pharma is a pharmaceutical company that commercialises branded and generic drugs. The business provides contract development and manufacturing services to more than 100 clients worldwide. It earns 90% of its revenue from the US.
What did Mayne Pharma report today?
Mayne Pharma advised that its revenue declined by 9% to $140 million for the four months up to October. The company said this was due to a weakening USD foreign exchange rate which depreciated 3 cents to US$ 71.5 cents, as well as a softer generic result.
Generics products division revenue was US$55 million in the first four months of FY21, down 10%. This was due to weaker performance in methylphenidate, amiodarone and butalbital.
Profit margin has remained consistent year on year at 47%, and operating expenses have fallen by 20% or $10 million, benefiting from the restructure undertaken in FY20, and continued cost containment.
Restructuring and strategy
Mayne Pharma says it has worked extensively on minimising its cost base by $16 million in 2020. A significant part of these savings have been in its dermatology business, where restructuring of the sales team has driven a more profitable operating model.
In addition, research and development (R&D) spend decreased by $15m. The company says while it continued to invest in R&D and business development activities, it has refocused from the more volatile retail generic segment to more sustainable areas in women’s health, dermatology and infectious disease.
What did the company report for FY20?
Back in August, Mayne Pharma announced its full year results for FY20. The company reported a net loss of $93 million driven mainly by asset impairments. This result was achieved on the back of a full year revenue of $457 million, which was down 13% from the prior year.
In October, the company suffered a setback when the US Food and Drugs Administration (FDA) raised questions in relation to the company’s generic version of the drug Nuvaring. The share price fell by 16% on the news that day.
About the Mayne Pharma share price in 2020
The Mayne Pharma share price has fallen by almost 20% this year. It started the year at 43 cents, and is now trading at 34 cents. The company commands a market cap of $587 million.
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