Mayne Pharma shares swoon following report on US drugs probe

Mayne Pharma shares closed more than 15pc lower, as new details emerged about an ongoing US investigation.

Mayne Pharma CEO Scott Richards in the Mayne Pharma labs in Adelaide.

Mayne Pharma shares have tumbled more than 15 per cent in today’s session despite paring earlier losses, as traders fret about an ongoing US probe into the pricing of generic drugs.

After seeing its valuation slashed by as much as fifth in morning trade, the group’s shares closed 15.54 per cent lower at $1.44.

An overnight Bloomberg report said a two-year US Department of Justice investigation of suspected price collusion in the sector had broadened to more than a dozen companies and over two dozen drugs.

The report singled out Mayne (MYX) as a company that has not confirmed plans to co-operate with authorities, although the ASX-listed group set the record straight in a statement this morning that reaffirmed expectations its profits will be unaffected.

The group had made the assertion on June 28, when disclosing the issue to shareholders.

“Contrary to an inaccurate statement made in the US press overnight, Mayne Pharma has previously stated that it is co-operating with the DOJ in its investigation and continues to do so,” the company said.

“Mayne Pharma continues to believe these investigations will not have a material impact on its future earnings. However, no assurance can be given as to the timing or outcome of the investigation.”

Mayne said the investigation into its operations was tied only to its generic doxycycline hyclate delayed-release tablets and potassium chloride powders.

Its US-listed rivals plunged as much as 27 per cent overnight.