Mayne Pharma Group (ASX:MYX) discussed a planned leadership transition and detailed its first-half fiscal 2026 financial and segment performance during its results presentation, highlighting improved gross margin and dermatology contribution growth despite flat revenue for the period.
Leadership transition and finance team update
Chief Executive Officer Aaron Gray opened the call by noting the company is undertaking a “planned and orderly leadership transition,” with Shawn Patrick O’Brien stepping down as Chief Executive Officer and Managing Director and Gray appointed CEO effective 21 February. Gray said the transition is part of the board’s structured succession process and is intended to maintain continuity of strategy, governance, and financial discipline. O’Brien said the change was planned and emphasized continuity, adding that he would remain available to the board in an advisory capacity to support an orderly transition.
Group results: flat revenue, higher margin, underlying cash generation
For the half, Mayne Pharma reported revenue of AUD 212.1 million, described as broadly flat year-on-year. Gross margin increased to 65.3% from 61.4% in the prior corresponding period, and total direct segment contribution increased to AUD 68.1 million. Underlying EBITDA was AUD 28.6 million, down 8%, while adjusted operating cash flow from continuing operations was AUD 16.9 million. The company ended the half with AUD 67.4 million in cash and marketable securities.
Management emphasized a distinction between operational performance and items characterized as non-recurring or non-cash. Gray said underlying EBITDA excluded an AUD 54.5 million non-cash earn-out reassessment and AUD 21.3 million of charges related to diligence, business development, litigation, and restructuring. He said the “main volatility sits outside underlying operations,” driven by discrete legal and transaction costs and earn-out style payments, and that the underlying earnings base remained “resilient” despite uncertainty and distraction associated with the Cosette transaction process.
On the cash flow bridge, management said the business generated AUD 16.9 million of underlying cash flow from continuing operations (excluding transaction and litigation costs), while scheme-related transaction and litigation costs were AUD 20.7 million. The company also made earn-out payments including AUD 7.3 million in royalties and AUD 10.3 million related to TWYNEO and EPSOLAY intangible acquisition cost. Discontinued operations cash outflows were AUD 5.1 million, and earn-outs from discontinued operations were AUD 3.1 million. Other movements included capital leases of AUD 1.7 million, net capital expenditure of AUD 1.3 million, and other items of AUD 0.5 million (all described as outflows).
Women’s health: demand gains and investment weighed on contribution
In women’s health, management said the portfolio continued to show momentum, supported by “favorable macro tailwinds in menopause” benefiting BIJUVA and IMVEXXY in particular, and that Mayne is building a franchise across NEXTSTELLIS, IMVEXXY, BIJUVA, and ANNOVERA to reduce reliance on any single product.
Women’s health revenue was AUD 96.5 million, up 2% versus the prior corresponding period. Within the portfolio:
- NEXTSTELLIS demand cycles increased 16% and net sales increased 4% to AUD 23.4 million.
- IMVEXXY total prescriptions increased 3% and net sales increased 2% to AUD 15.6 million.
- BIJUVA total prescriptions increased 26% and net sales increased 23% to AUD 8.2 million.
- ANNOVERA total prescriptions increased 2%, but net sales declined 9% to AUD 14.4 million, which management attributed to net realization dynamics from inventory returns rather than volume weakness.
Women’s health gross profit was AUD 76.2 million, down 1%, and gross margin was 79%, down three percentage points. Direct operating expenses increased to AUD 40 million, up 6%, reflecting planned investment behind the franchise. Direct contribution was AUD 36.2 million, down 8%.
Gray said access expansion supported NEXTSTELLIS conversion from demand into filled prescriptions, noting new coverage decisions effective 1 January that added approximately 25 million additional covered lives in the U.S. He said broader access could reduce abandonment, improve net revenue per script, and reduce volatility in rebates and contracting dynamics.
During Q&A, Gray addressed why women’s health revenue appeared relatively flat despite prescription growth, citing ANNOVERA returns and a prior-period benefit from credits tied to a conservative gross-to-net (GTN) methodology that did not repeat. He said that once normalized, he would expect revenue growth to align with or exceed prescription growth. On ANNOVERA specifically, he described the “Big Three” wholesalers’ return rights, called the product logistically challenging, and said Mayne is pursuing a “multi-prong approach” including improving access processes to reduce abandonment and exploring supply-side changes, including contracting with wholesalers with different return terms.
Asked about BIJUVA’s momentum, Gray pointed to increased discussion and awareness around hormone replacement therapy (HRT), including the U.S. government’s removal of the black box warning from certain HRT products, including BIJUVA and IMVEXXY. He added that Mayne’s label update is in process.
Dermatology: margin expansion drove contribution growth; disintermediation to scale
In dermatology, management highlighted improved profitability driven by mix and channel strategy. Segment revenue was AUD 78.6 million, down 3%, but gross margin expanded to 65%, up 12 percentage points, and direct contribution increased 35% to AUD 29.8 million. Gray said the company is “moving from building the ecosystem to scaling it” and plans to launch the next leg of its disintermediation strategy in Q3 fiscal 2026.
Management said branded revenue increased to AUD 51.2 million (65% of dermatology mix) from AUD 44.5 million (55% of mix) in the prior corresponding period, with TWYNEO and EPSOLAY contributing to the increase following their relaunch by Mayne. Other dermatology products declined to 35% of mix from 45%. The company said this mix shift drove the margin improvement and, combined with flat segment operating expenses, supported operating leverage in contribution.
In response to an investor question on the dermatology opportunity, Gray said coverage for small-molecule medical dermatology products is relatively poor and may deteriorate, requiring a different commercial model than traditional pharma approaches. He described Mayne’s alternative distribution and access solution as providing cost certainty at the time of prescribing, no prior authorizations, and delivery directly to patients. He also said the company sees opportunities to add assets in “capital light” structures, citing experience partnering with Galderma and suggesting other potential partnerships and product acquisition opportunities.
Gray also addressed expected competition for RHOFADE, stating that when Mayne acquired the asset from a bankruptcy proceeding it knew it was not “long-lived,” and that settlement terms reached by the prior owner allow competing generics to enter at the end of fiscal 2026. He said Mayne expects competitors to launch at that time and that the company would take steps to protect and maintain its market share.
International: PBS listing drives investment phase; Salisbury upgrade completed
In international, management highlighted three operational points: PBS approval for NEXTSTELLIS in Australia with promotion commenced post-approval; completion and inauguration of an AUD 18 million Salisbury facility upgrade (including AUD 4.8 million from the Modern Manufacturing Initiative Grant); and external recognition for export performance.
International revenue was AUD 36.9 million, down 1%, while gross profit increased 7% to AUD 11.3 million and gross margin improved to 30.5% (up three percentage points). Direct operating expenses rose 32% to AUD 9.2 million, which management attributed primarily to planned investment related to NEXTSTELLIS, and direct contribution declined 42% to AUD 2.1 million.
Gray said the company is focused on converting these investments into improved performance through improved capacity and reliability from Salisbury, better utilization and fixed cost absorption, and leveraging the PBS listing to improve access and affordability. He cited 118% growth in three-pack volumes of NEXTSTELLIS in December 2025 immediately following the PBS decision as an early traction indicator.
On the company’s adjustments to underlying EBITDA going forward, Gray said costs associated with the Cosette transaction were extensive in the half and that appeal-related costs should be “significantly reduced” versus what has already been spent, with damages-claim costs also expected to be lower than the initial spend and potentially spread over a longer period. He also said Mayne incurred more than AUD 2 million of legal costs related to defense of intellectual property in the first half and that management is working to resolve these matters. Additionally, he said FDA post-approval study costs for women’s health stepped up by about AUD 2.6 million versus the prior first half and are expected to continue through the second half of fiscal 2026, then step down beginning in fiscal 2027 as studies are completed.
In closing remarks, management said it continues to evaluate capital allocation priorities including share repurchases, targeted asset acquisitions, and expanded promotional activities. Gray also said Mayne has commenced proceedings in the Supreme Court of New South Wales against Cosette and related parties, Avista and David Burgstahler, seeking “substantial damages” on behalf of shareholders and the company.
About Mayne Pharma Group (ASX:MYX)
Mayne Pharma Group Limited, a specialty pharmaceutical company, manufactures and sells branded and generic pharmaceutical products in Australia, New Zealand, the United States, Canada, Europe, Asia, and internationally. The company operates through four segments: International Branded Products, and Portfolio Product Division. It provides oral drug delivery systems; and contract development and manufacturing services to third-party customers, as well as distributes specialty pharmaceutical products in the dermatology, women’s health, and infectious disease therapeutic areas.
