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.
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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.
