Mayne Pharma Group Ltd (ASX: MYX) shares are being hammered on Wednesday morning.
At the time of writing, the ASX 300 share is down by a staggering 33% to $4.31.
As a comparison, the S&P/ASX 200 index is up 0.6% today.
Why is this ASX 300 share taking a tumble?
As some readers may be aware, this pharmaceutical company received and accepted a takeover offer earlier this year from US-based Cosette Pharmaceuticals.
Things have been moving along very nicely. In fact, the Federal Court approved a scheme meeting last week, with shareholders invited to vote on the deal next month.
However, a major development has happened which has sparked fears that Mayne Pharma's $672 million takeover deal could be on the verge of collapse.
What happened?
This morning, Mayne Pharma revealed that it received a notice from Cosette over the weekend alleging that a "Material Adverse Change" had occurred, potentially giving Cosette the right to walk away from the deal.
Cosette cited a combination of issues — including Mayne's recent earnings update, ongoing litigation with TXMD, and an FDA letter — as the basis for its claim.
In response, Mayne Pharma has firmly rejected Cosette's allegations, arguing that no material adverse change has occurred, that all relevant financial information was already disclosed to the market in April, and that Cosette's claims are speculative and unquantified. It said:
The Cosette Notice does not currently quantify the full financial impact of the cumulative matters that Cosette asserts constitute a Mayne Material Adverse Change (being Mayne Pharma's trading performance, including the circumstances associated with the Mayne Pharma 22 April 2025 earnings update, the previously disclosed litigation with TXMD, and certain correspondence with regulators including the FDA Untitled Letter disclosed by Mayne Pharma on 14 May 2025) and in Mayne Pharma's view does not otherwise establish the pre-requisites for a Mayne Material Adverse Change, as defined in the SID.
Is the deal dead?
Not yet — but the next few days will be crucial. Cosette hasn't terminated the deal but has triggered a 10-business-day consultation period. This is a formal process required under the agreement before any termination can occur.
If those discussions fail, Cosette has said it may issue a termination notice.
Mayne Pharma, meanwhile, insists the deal is still binding and says it is pushing ahead with the transaction as planned.
But with the ASX 300 share crashing deep into the red today, it seems that the market believes the deal could be as good as dead. Time will tell if this is the case.
