The Mayne Pharma Group Ltd (ASX: MYX) share price is having a day to forget.
At the time of writing, the pharmaceutical company's shares have crashed 27% to a multi-year low of 20 cents.
Why is the Mayne Pharma share price crashing?
Investors have been selling down the Mayne Pharma share price on Wednesday following the release of a trading update at the company's annual general meeting.
According to the release, the company's revenue has fallen sharply during the first four months of FY 2023.
For the four months ended 31 October, Mayne Pharma's revenue from continuing operations came to $59 million. This is down 29.5% over the prior corresponding period. This is despite the company generating $6.3 million in revenue from its new Nextstellis product, which wasn't on sale a year ago.
The main drag on its performance has been dermatology sales in the Portfolio Products segment. This weakness has offset sales growth from retail generics and led to Portfolio Products revenue almost halving during the four months.
Management blamed this on higher than expected sales and channel inventory levels in June 2022, discontinued products, and higher gross to net charges. The latter includes patient savings (copay card costs).
Outlook
Management's outlook for the remainder of the half also appears to have spooked investors and put pressure on the Mayne Pharma share price.
It advised that first half cash and earnings are expected to be impacted by a number of items. This includes normalised trading patterns with suppliers and customers, higher than expected copay card costs in dermatology, and a Nextstellis direct to consumer campaign in the US.
Though, one positive is that its focus on driving improved profitability and cash flow is expected to lead to a return to positive EBITDA in FY 2024.
Time will tell if that is the case. Nothing Mayne Pharma has done in recent years appears to have gone to plan. As a result, its shares are now down over 90% from 2016's highs.
