The Mayne Pharma Group Ltd (ASX: MYX) share price is shooting higher on Friday morning.
At the time of writing, the pharmaceutical company's shares are up a massive 28% to 59 cents.
This latest gain means the Mayne Pharma share price is now up 69% since the start of the year.
Why is the Mayne Pharma share price charging higher?
Investors have been buying the company's shares this morning following the release of a very positive announcement.
According to the release, the US Food and Drug Administration (FDA) has approved the New Drug Application (NDA) from Mayne Pharma and Mithra Pharmaceuticals for the novel combined oral contraceptive Nextstellis.
Following this approval, Mayne Pharma anticipates the commercial launch of Nextstellis by the end of June 2021.
What is Nextstellis?
Nextstellis was developed by Mithra and is the first and only contraceptive pill containing estetrol. This is a native estrogen which is now produced from a plant source. Estetrol is also the first new estrogen introduced in the US in more than 50 years.
The release explains that almost 10 million American women use short-acting combination (estrogen and progestin) contraceptives. This led to the US market for combined hormonal contraceptives generating US$3.6 billion in sales for the 12-month period ending January 2021 according to IQVIA.
Mayne Pharma has a 20-year exclusive license and supply agreement in the US and Australia for Nextstellis. The product is still under active review at the Australian Therapeutics Goods Administration.
Positively, the University of California's Professor and Director of Family Planning, Mitchell Creinin, spoke very positively about the product.
He said: "Nextstellis is a new innovative contraceptive that has been shown in clinical trials to be not only safe and effective but also well tolerated with a desirable bleeding profile and minimal impact on triglycerides, cholesterol and glucose, as well as weight and endocrine markers."
Management commentary
Given that the company considers this an important milestone, it isn't surprising to see the Mayne Pharma share price shooting higher.
The company's CEO, Scott Richards, commented "The approval of Nextstellis represents an important milestone, providing women with a new choice for their reproductive health. We are delighted to be introducing a new estrogen and bringing to market this novel, safe and effective option for women to consider with their healthcare providers."
"As a result of receiving FDA approval for Nextstellis, Mayne Pharma will pay Mithra US$11m in cash and issue 85.8m ordinary Mayne Pharma shares. Mithra is also entitled to a Mayne Pharma Board position. The new appointment will be subject to shareholder approval at the next Annual General Meeting in November 2021."
Based on the current Mayne Pharma share price, those shares are worth approximately $50.6 million.
