Mayne Pharma shares surged 28% yesterday after the company confirmed it had raised over half a billion in an institutional placement at $1.50 a share and rights issue as part of its dramatic move into the competitive US generic drugs market.
On Tuesday, it announced the $US652 million (close to $A900 million) purchase of a portfolio of generic drugs in the US, funded via share issues.
With the placement out of the way, the focus now is on the 1-for-1.725 rights issue to shareholders (many of whom held shares in the company’s forerunner, FH Faulding) priced at $1.28 a share.
The company raised $287 million via the placement and a further $347 million from the rights issue. Retail investors will now have the opportunity to take up their entitlements, which would raise a further $254 million.
The shares hit a day’s high of $2.05 and it has now settled at $1.91, giving it a market value around $1.8 billion before the extra funds from existing shareholders roll in. That will take the company’s enterprise value to past $2.5 billion.
With the funding raising for the US deal assured of success, Mayne will now focus now on integrating the new drugs into its existing operations, with many of the new products to be manufactured at its plant in South Australia.
Mayne Pharma CEO, Scott Richards, said in the statement, “We are delighted with the exceptional support that our existing shareholders and new investors have shown. This acquisition is another significant step forward in the execution of our strategy to strengthen and grow our business in the world’s largest pharmaceutical market.”
“This highly attractive and complementary on-market portfolio of products is expected to provide a stable base of revenue and earnings with growth to come from a combination of the launch of pipeline products and the extraction of revenue and cost synergies over time, he said.”
