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Mayne Pharma banks on new pill to restore financial health

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Adelaide-based Mayne Pharma has received approval from the Therapeutic Goods Administration to sell its first novel oral contraceptive pill into the Australian market, with the company hoping the new drug will spark a rebound from a reported net loss of $208 million last financial year.

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The Salisbury-South pharmaceutical manufacturer announced on the ASX last week that its short-acting oestrogen and progestin contraceptive pill, Nextstellis, had been given final approval from the TGA and was expected to enter the Australian market by mid-2022.

The “first of its kind” drug was developed by Belgian-based women’s health company Mithra Pharmaceuticals and contains 14.2 milligrams of estetrol, a naturally-occurring oestrogen during pregnancy, and 3mg of the progestin drospirenone.

Nextstellis has already received approval from the US Food and Drug Administration and regulators in Europe and Canada. The pill was launched in the US market in June.

The approval from the Australian regulator has come quicker than Mayne Pharma had previously anticipated, with the company earlier this year stating it expected the TGA sign off to come in early 2022.

“It has been 10 years since Australian women have had a new contraceptive hormone to consider with their doctor,” Mayne Pharma CEO Scott Richards told the ASX on Tuesday.

“Nextstellis offers an effective, safe and well-tolerated pill with excellent cycle control and has demonstrated low impact on certain parts of the body.”

Mayne Pharma has a 20-year license and supply agreement for the drug in the US and Australia, as well as five years market exclusivity for the Nextstellis brand given the drug contains a new chemical entity.

The company said two phase 3 clinical trials of Nextstellis in 3632 women showed the drug meeting its primary endpoint of pregnancy prevention and “positive results” on cycle control, bleeding pattern, safety and tolerability and rates of adverse reactions.

Mithra Pharmaceuticals CEO Leon Van Rompay said TGA approval paved the way for the commercial launch of the drug on a third continent.

“This fourth major approval obtained this year is perfectly in line with our schedule, allowing us to cover more than 80 per cent of the targeted territory,” he said.

The launch of Nextstellis into the US and Australian markets was a hot topic at Mayne Pharma’s Annual General Meeting on November 23, in which the company’s leaders attempted to chart a path out of a $201 million net loss after tax in FY21.

It comes after reporting a $92.8 million net loss the previous financial year and a $280 million loss in FY19.

The company’s revenues in FY21 dropped to $401 million from $525.2 million two years ago, with revenue falling 13 and 12 per cent in consecutive years.

Mayne Pharma’s US-based chair Frank Condella, who was appointed to the role in August, attributed the most recent results to increased competition and a weakening US dollar.

“FY21 has been another challenging year impacted by a number of external factors including the global pandemic, ongoing competitive pressure in the retail generic market and increasing demands from payors for insurance coverage across our brand portfolio,” he told shareholders at last month’s AGM.

“We have also seen the USD weaken which has impacted our results as they are reported in AUD.

“[The] board and management team are very disappointed in the financial performance of the Group and are committed to turning around performance and seeking out the best opportunities to maximise shareholder value.”

Condella said the launch of Nexstllis into the US market was the company’s “most significant commercial opportunity” in the near-term.

“Nextstellis competes in the $US3.4 billion short-acting combined hormonal contraceptive market (CHC), with nearly 10 million American women using CHCs for their contraceptive needs,” he said.

The Australian contraceptive market, meanwhile, is valued at $A125 million, with the short-acting estrogen and progestin oral contraceptive market valued at more than $A65 million, according to Mayne Pharma.

CEO Scott Richards said the company would continue investing in its “core focus areas” of women’s health, dermatology and contract services, but noted that factors outside of its control would have an impact on future results.

“Mayne Pharma’s success and performance will be heavily influenced by the execution of our strategic priorities and will depend on market factors including the timing of FDA approvals, payer coverage and reimbursement, and competitive intensity in our key product areas,” he told shareholders.

“Key growth drivers in the near to mid-term are expected to be the successful commercialisation of Nextstellis in the US, the launch of more than 10 dermatology products this fiscal year … and continued optimisation of our cost base.”

Richards said that as of November 23, more than 7000 prescriptions had been written for Nextstellis in the US, including 300 that had been dispensed.

Mayne Pharma’s share price was as high as $1.30 in October 2018 before steadily falling on the back of a series of poor results to bottom out at $0.19 on March 19, 2020, during the sharp COVID-19 market downturn.

Its shares recovered to a high of $0.51 in April this year but are now trading at $0.26.

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