Pharmaceutical giant Mayne upbeat for 2025 despite the spectre of Trump tariffs

Mayne Pharma, which is the target of a $672m foreign takeover bid, appears unperturbed by the likely impact of Donald Trump’s import tariffs on the drug sector.

The company’s third-quarter results were affected by lower-than-expected volume growth across its women’s health and dermatology products.. Picture: Getty Images

Drugmaker Mayne Pharma, which is the subject of a $672m foreign takeover bid, has painted a rosy earnings outlook for 2025, despite the threatened impact of a Trump tariff war on the sector.

ASX-listed Mayne said it expected full-year underlying earnings to range from $47m to $51m, representing a 105-123 per cent improvement on 2024 following a weak third quarter.

Mayne has received a $7.40-a-share takeover offer from US drug giant Cosette, a deal that has been unanimously backed by the Australian company’s board in the absence of a superior bid and subject to an expert’s ­assessment.

Mayne Pharma’s largest individual shareholder, billionaire pub baron Bruce Mathieson, also has backed the tilt.

Mayne Pharma chief executive Shawn Patrick O’Brien said the company’s third-quarter results had been impacted by lower-than-anticipated volume growth across its women’s health and dermatology products.

“Although January and February were challenging, we saw a rebound in our underlying earnings for March, with overall earnings expected to show growth on 2024,” said Mr O’Brien.

Mayne Pharma, which traces its roots back to FH Faulding & Co Ltd in 1845, produces a range of oral and topical dose medi­cations for both the Australian and US markets.

Investors in Australian drugmakers including Mayne and CSL fear a major tariff on pharmaceuticals from the Trump administration could hurt $1.6bn in Australian exports of medicines.

The federal government said Labor would not bow to US pressure to change the design of Australia’s Pharmaceutical Benefits Scheme after Donald Trump’s criticism of subsided medicines schemes.

These schemes have come under fire for limiting the price US drugmakers can charge for their products in some countries.

Cosette, which also has a portfolio of products in women’s health and dermatology, has corporate and manufacturing facilities in New Jersey and North Carolina in the US.

It is backed by private equity firm Avista Healthcare Partners and funds managed by Hamilton Lane, a US private markets investment manager.

For the nine months to March 31, Mayne’s unaudited group revenues increased 5 per cent to approximately $300m versus the prior corresponding period, driven by growth in its women’s health business.

Its dermatology business reported a 9 per cent decline while revenue was up 2 per cent in its international division. Unaudited underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 116 per cent to $28.6m.

That came after unaudited third-quarter net sales fell 11 per cent to $86.8m with an under­lying EBITDA loss of $3.4m for the quarter.

Mayne told shareholders earlier that in the absence of a better offer, the board had unanimously agreed to a scheme of ­arrangement with ­Cosette at $7.40 a share cash.

“The offer provides shareholders with the opportunity to receive cash value at a significant premium,” Mayne Pharma chair Frank Condella said. “We are pleased that Cosette has recognised significant value in Mayne Pharma, particularly in our women’s health and dermatology businesses.”

Mayne shares, which have surged 47 per cent so far this year, closed steady at $7.05 on Tuesday.

The stock was trading as high as $7.47 in early May last year.

Originally published as Pharmaceutical giant Mayne upbeat for 2025 despite the spectre of Trump tariffs