The Mayne Pharma Group Ltd (ASX: MYX) share price is sinking on Friday following the release of its full year results.
At the time of writing, the pharmaceutical company's shares are down 10% to 26.5 cents.
This leaves the Mayne Pharma share price trading within touching distance of its multi-year low of 26 cents.
Mayne Pharma share price sinks after posting $208.4 million loss
- Revenue down 12% to $400.8 million
- Reported earnings before interest, tax, depreciation and amortisation (EBITDA) down 18% (or 5% in constant currency) to $66.1 million
- Underlying EBITDA down 10% to $86.5 million
- Loss after tax of $208.4 million
What happened in FY 2021 for Mayne Pharma?
FY 2021 was another tough year for Mayne Pharma. Currency headwinds and weak generic products sales led to a 12% year on year decline in revenue to $400.8 million. Management notes that its generic products business was impacted by new competition on key products and ongoing pricing pressures across the portfolio.
And due to Nextstellis set-up costs, the company's EBITDA fell harder. It was down by 18% on a reported basis to $66.1 million. If you exclude these set-up costs, EBITDA would have been down just 10%. This was thanks also to operating expenditure reductions of $18 million.
But no amount of cost savings could stop Mayne Pharma from posting a loss after tax in FY 2021. It declared a loss of $208.4 million for the year. This was driven by a $229.3 million non-cash intangible asset impairments of the generic portfolio. This follows a $99 million impairment to the generics business in FY 2020.
What did management say?
Mayne Pharma's CEO, Scott Richards, commented: "At a group level, results have been impacted by the weakening USD which had a $10m adverse impact on EBITDA, the COVID-19 pandemic and ongoing challenges in the US retail generic sector."
"On a constant currency basis, reported revenue was down 3%, reported EBITDA down 5% and underlying EBITDA down 10% excluding NEXTSTELLIS set up costs. Pleasingly, all segments other than the Generic Products segment contributed to EBITDA growth compared to the prior corresponding period (pcp)."
What's next for Mayne Pharma?
One possible glimmer of hope for the Mayne Pharma share price is management's positive view on the long term. This is thanks to its pipeline of products with large addressable markets.
Mr Richards said: "The Company has significantly strengthened its US dermatology pipeline in recent months signing four supply and distribution agreements with leading suppliers for eleven dermatology products which treat key skin conditions such as acne, psoriasis and rosacea. Our partnering success validates our unique go-to-market approach in dermatology which focuses on providing better outcomes for patients, prescribers, and specialty pharmacies."
"All products have final FDA approval other than two which have tentative FDA approval. The two largest products with combined IQVIA sales of more than US$300m are expected to be meaningful contributors to our business this fiscal year given current market conditions and competitive dynamics. The Company continues to prosecute its other programs pending at the FDA including a generic version of Nuvaring, which is targeting an addressable market of US$680m."
The company also expects its growth to be boosted by the successful commercialisation of Nextstellis in the US and Australia, the launch of more than a dozen dermatology and women's health products in the US targeting markets with IQVIA sales of US$1.5 billion, the accelerating growth of Metrics Contract Services and International, and continued optimisation of its cost base.
Though, judging by the Mayne Pharma share price performance today, some investors aren't sticking around to see if FY 2022 is a big improvement on the last few years.
