The Mayne Pharma Group Ltd (ASX: MYX) share price is struggling to catch a bid in today's session.
Shares in the pharmaceutical company are struggling after the company announced it is facing a class action.
Here's what the company announced and why investors are exercising caution over the Mayne share price.
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Mayne share price dips on proceeding of class action
Earlier today, Mayne announced that the company has been slapped with an investor class action.
According to the announcement, legal proceedings have been lodged in the Supreme Court of Victoria.
Mayne noted the class action alleged the company undertook misleading or deceptive conduct. In addition, the action alleges the company was in breach of continuous disclosure obligations over alleged anti-competitive conduct in the United States.
Australian law firm Phi Finney McDonald brought the legal proceedings. The law firm is acting on behalf of all investors who acquired shares in Mayne between 24 November 2014 and 15 December 2016.
In the company's announcement, Mayne emphatically denies any and all allegations of wrongdoing. Accordingly, the company noted it will vigorously defend the proceedings.
More on the class action against Mayne
According to the website of Phi Finney McDonald, it is alleged Mayne participated in a conspiracy to restrain trade, inflate the price of generic pharmaceuticals, and reduce competition.
The class action against Mayne follows an announcement on 15 December 2016. On that day, the Attorney General of Connecticut commenced anti-trust civil proceedings against a number of pharmaceutical companies, including Mayne Pharma Inc (US).
There are 3 main allegations against Mayne Pharma. In particular, it's alleged the company agreed to price-fixing and market-sharing arrangements from late 2014.
Snapshot of the Mayne share price
Mayne Pharma is a specialty pharmaceutical company focused on commercialising novel and generic pharmaceuticals. The company also provides contract development and manufacturing services to clients. Mayne Pharma has two facilities based in Salisbury, Australia and Greenville, USA.
Despite soaring to a 52-week-high in mid-April, the Mayne Pharma share price has struggled in 2021. Including today's price action, shares in the pharmaceutical company are down more than 7% year-to-date.
At the time of writing, the Mayne share price is trading 6% lower for the day at 31.5 cents.
