Fresh from the terminated takeover bid by US company Cosette Pharmaceuticals, Mayne Pharma Group Ltd (ASX: MYX) has released a trading update for the first five months of FY26, highlighting weaker near-term earnings as the company steps up investment across its core growth franchises following a turbulent year marked by takeover uncertainty.
What did Mayne Pharma announce?
For the period from July to November, Mayne reported net revenue of $165 million, down 5.5% on the prior corresponding period, while underlying EBITDA fell to $11.5 million, roughly half the level recorded a year earlier. Management attributed the decline to increased operating costs, higher marketing spend, and the absence of one-off benefits that supported last year's result.
Despite the softer earnings outcome, the update points to solid underlying demand, particularly in the company's Women's Health portfolio. Prescription volumes continued to grow across key brands, with total trade unit volumes up 15% year on year.
Management said additional investment in sales and marketing in both the United States and Australia was deliberately accelerated to build momentum and maximise the long-term value of its intellectual property, even though this weighed on short-term profitability.
The Dermatology division delivered a mixed performance. Revenue declined due to pricing pressure and increased competition affecting older products; however, gross margins improved materially, supported by a greater contribution from newer, branded treatments acquired earlier in the year. This shift in product mix lifted margins to 64% year to date, up from 52% previously.
International operations also recorded a lower contribution as investment increased following the recent PBS listing of NEXTSTELLIS® in Australia. While revenue was broadly flat, margins improved, reinforcing management's view that the current earnings pressure reflects growth investments rather than a deterioration in underlying demand.
Mayne ended November with cash and marketable securities of $83 million, following payments related to recent product acquisitions, legal costs associated with the failed Cosette takeover, and the completion of divestment-related obligations. The company said its cash usage follows a predictable quarterly cycle and remains sufficient to support the current strategy.
What comes next?
Looking ahead, management expects continued volume growth across Women's Health and International segments, with Dermatology benefiting from a full six months of contribution from newer products in the second half of FY26.
The update signals a clear pivot away from corporate activity and toward execution, with the near-term focus on converting growing demand into sustainable earnings recovery.
Mayne Pharma shares were relatively muted following the update and were down 0.8% at the time of writing.
