Drug maker Mayne Pharma (MYX) is one of those rare stocks where investors expect much more from it in the coming year, than they saw in the year to June 30.
To put it crudely, they expect Mayne to pay off after its rapid expansion.
The shares are up 50% so far this year – although those rapid gains stalled in the past month with the price rise coming to just 2.3%, and all of that and a bit more were accounted for by the 3.4% rise on Friday in the wake of the release of the 2015-16 results.
Mayne on Friday reported that net profit soared an impressive 379% to $37.4 million after the acne treatment it acquired in February 2015 delivered on expectations and a generic drug sold well after launch.
Mayne has been the hot stock for many investors after it paid $US652 million to a suite of generic drugs from Israeli drug group, Teva in June. The shares are up 40% since that announcement on June 29.
Underlying net profit, which removed one-off costs associated with the acquisitions and some tax effects, rose 237% to $45.2 million, just ahead of the market forecasts of $44.3 million.
Revenue surged 89% to $267.3 million, while underlying earnings before interest, tax, depreciation and amortisation jumped 143% to $88.5 million.
No dividend was declared for the year to June.
The company told investors what they wanted to hear – to expect significant growth in 2016-17 driven by the Teva and GSK acquisitions.
But directors did not provide specific guidance in the outlook statement in Friday’s report:
"The outlook remains very positive and the Company has significant growth opportunities across multiple channels and all US business segments in the world’s largest pharmaceutical market. Growth in FY17 will be driven by the recent product acquisitions, new product launches and further market penetration of the on-market portfolio globally,” they said.
“The recently announced product acquisitions from Teva and GlaxoSmithKline (GSK) will significantly enhance the GPD and SBD platforms and provide a stable base of revenue and earnings with growth to come from a combination of the launch of pipeline products, the re-launch of Fabior®and Sorilux®, and the delivery of revenue and cost synergies over time.
“The Company will also continue to identify further business development opportunities to in- license or acquire complementary assets to expand the on-market portfolio and pipeline or introduce new manufacturing or technology platforms,” directors said on Friday.
