The Mayne Pharma Group Limited (ASX: MYX) share price is up a healthy 5% after rocketing today amid a major company announcement.
Shares in the ASX pharmaceutical company currently trade for 35.7 cents apiece after soaring 25% to an intraday high of 42.5 cents a share just after market open.
They're currently outperforming the broader S&P/ASX 200 Health Care Index (ASX: XHJ) which is down 1.5%. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down 0.37% in late afternoon trade.
Let's find out more about why the stock is rallying.
What was announced today?
Mayne Pharma announced that it has entered into an agreement with US multinational healthcare company Catalent, Inc. (NYSE: CTLT) to sell its Metrics Contract Services business for $679 million.
Metrics is a contract development and manufacturing company (CDMO) based in North Carolina, US. The company has contracts with international biotech and pharmaceutical companies.
Mayne Pharma will receive approximately $636 million for the sale.
Commenting on the sale, Mayne Pharma chair Frank Condella said:
This transaction unlocks significant value for Mayne Pharma shareholders and creates a leaner and more focused business with financial flexibility to support its strategic priorities. The Board believes the agreement with Catalent represents an attractive opportunity for a business which has reached maturity under Mayne Pharma's ownership.
In conjunction with the sale, Mayne Pharma has agreed on the terms of a five-year supply agreement
with Catalent to ensure supply continuity of products from the Greenville facility.
Mayne Pharma share price snapshot
Shares of Mayne Pharma Group are up 21% year to date.
This price performance is significantly beating the broader market, with the ASX 200 Index down 7.5% over the same period.
At the current share price, the company's market capitalisation is around $622 million.
