The Mayne Pharma Group Ltd (ASX: MYX) share price is down 20% after the company released its unaudited FY23 full-year results.
The ASX 300 healthcare stock opened at $4.68, down 1.5% on Thursday. It fell to an intraday low of $3.71 in morning trading.
The Mayne Pharma share price is currently $3.81, down 19.79% for the day. Let's check out the results.
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Mayne Pharma share price plummets on 44% earnings drop
Here are the key points:
- Reported revenue of $183.6 million, up 17% on FY22
- Reported gross profit of $83.5 million, up 17% on FY22
- Reported earnings before interest, taxes, depreciation, and amortisation (EBITDA) of a loss of $102 million vs. $9 million EBITDA in FY22
- Reported net loss after tax of $317.4 million, down 44% on FY22
- $172.6 million net cash position vs. net debt of $317 million at the end of FY22
- No final dividend.
What else happened in FY23?
Mayne Pharma's branded products revenue of $61.9 million represented an impressive 484% lift on FY22.
Portfolio products revenue of $57 million was down 38% on FY22. International revenue increased 19% to $64.7 million, largely due to increased contract manufacturing in 2H FY23.
A primary focus in FY23 was transforming Mayne Pharma into a specialty pharmaceutical company. It wants to attain a leading position in women's health and dermatology and return to profitability.
A number of milestones occurred during FY23.
In August 2022, Mayne Pharma announced the sale of its Metrics Contract Services business for US$475 million.
In October, the company announced a fully franked special dividend of 2.72 cents per share. It also announced a pro-rata return of capital of 3.8 cents per share, but this was cancelled in February.
Investors thought this was a smart decision, with the Mayne Pharma share price lifting 5.4% on the news.
In December, Maybe Pharma acquired the exclusive US license to a portfolio of on-market women's health products (ANNOVERA, IMVEXXY and BIJUVA) and pre-natal vitamins. The deal cost US$140 million and included potential sales-based milestone cash payments and sales-based royalties.
It appeared investors weren't convinced of the value here. The ASX 300 healthcare stock dropped 12.5% on the day of the announcement.
In February, Mayne Pharma announced the US$90 million sale of its US retail generics portfolio business.
In May, the Mayne Pharma share price fell 9% on news of a share buyback of up to 10% of issued capital.
The company recorded a cash outflow from operating activities of $42.7 million in FY23. It notes that there was a "significant improvement in business performance" in 2H FY23.
During the second half, there was a positive operating cash flow of $14.1 million.
What did management say?
Mayne Pharma CEO Shawn Patrick O'Brien, who joined the company in October 2022, said:
Fiscal year 2023 has been one of significant change at Mayne Pharma. We have reshaped the business to focus on our core areas of Women's Health, Dermatology and our International operations.
Both our BPD/Women's Health and International segments showed year-over-year revenue growth, and, in the second half, we delivered improved operational and financial performance across all three segments.
With accelerating sales momentum and ongoing cost discipline, Mayne Pharma enters FY24 well positioned for sustainable long-term growth.
What's next for Mayne Pharma?
Mayne Pharma says it expects to return to positive EBITDA and cash generation in FY24.
Drilling down in its women's health division, the company will work to complete the integration of the news in-licensed women's health assets.
In its dermatology business, the company is planning capital-light, accretive business arrangements, including further developing its channel strategy and expanding partnerships to capture market share.
In its international business, Mayne Pharma will pursue targeted investment and new manufacturing revenue streams.
Mayne Pharma share price snapshot
The Mayne Pharma share price is down 9.75% in the year to date. The ASX 300 healthcare stock has lost 37% of its value over the past 12 months.
By comparison, the S&P/ASX 200 Health Care Index (ASX: XHJ) has fallen 6.3% over the same period.
