MAYNE PHARMA REPORTS 1HFY22 RESULTS

Mayne Pharma's CEO, Mr Scott Richards said, 'At a group level, our underlying results this half have incorporated our significant investment in commercial infrastructure to support the launch of NEXTSTELLIS. Pleasingly, excluding our NEXTSTELLIS investment, underlying EBITDA was up 11% on the 1HFY21 and up 35% on the 2HFY21 despite our retail generics business segment continuing to erode as a result of the sustained competitive pricing environment. Encouragingly, Metrics Contract Services, International and our dermatology portfolio delivered double digit earnings growth versus pcp. At the bottom line, we reported a net loss after tax which was impacted by a non-cash intangible asset impairment of the generic portfolio.'

'We made significant progress with the launch of NEXTSTELLIS and 2,100 healthcare professionals (HCPs) have now written the product since launch, the bulk of which came in the 2QFY22. This is particularly pleasing given the COVID pandemic and the recent Omicron variant which have impacted the uptake of NEXTSTELLIS due to reduced access to physicians and material absences in the sales team. Despite these headwinds, we are approaching acquiring 100 new writers in a week and the aided awareness of NEXTSTELLIS amongst our target HCPs has grown to 79%. Payer commercial coverage is critical to ensuring affordable access to the brand and we currently have 55% of commercially insured patients with unrestricted access and ~70% with access including restrictions which is in line with expectations and the experience of other brands in this market at this stage of their launch cycle.'

'Notwithstanding the challenging operating environment, we are excited about the potential of NEXTSTELLIS to become a leading brand in the US$3.4b contraceptive market based on the trajectory we are seeing with new writers, dispensed prescriptions and commercial insurance coverage. We expect continued positive momentum in 2022 across these key indicators, together with the influence of a targeted direct-to-consumer marketing campaign which we plan to roll-out later this calendar year.'

'Mayne Pharma has a diverse business model with multiple opportunities for growth and potential near-term value creation. Whilst NEXTSTELLIS is the most significant commercial opportunity, the Company has a number of other high-quality assets. Metrics, our US Contract Service business participates in the highly attractive CDMO4 market and has demonstrated a solid track record of double-digit revenue CAGR over the last eight years. Our dermatology business returned to strong earnings growth this half and is expected to significantly benefit from three recent launches targeting addressable markets of US$450m. Our International business has an advanced pipeline of near-term new product launches including the Australian launch of NEXTSTELLIS and the European launch of KAPANOL into the OST market.'

Reported revenues of $196.4m, down 6% on 1HFY21 * Reported EBITDA of $48.8m, up 20% on 1HFY21 affected by the non-cash NEXTSTELLIS deferred consideration reassessment due to COVID and associated longer time period for physician and patient activation and higher cost of payer coverage and reimbursement * Reported net loss after tax of $50.4m driven by intangible asset impairment associated with the generic business * Underlying EBITDA of $23.7m, down 38% on 1HFY21 * Underlying EBITDA of $44.4m excluding NEXTSTELLIS launch investment, up 11% on 1HFY21 and up 35% on 2HFY21 * Expense reduction excluding NEXTSTELLIS launch investment of $8.0m or 12% versus 1HFY21 * Solid growth across key performance metrics for NEXTSTELLIS in 2QFY22 versus 1QFY22 * Metrics Contract Services delivered 20% revenue growth on 1HFY21 * International delivered 29% revenue growth on 1HFY21 * Entered into five new supply agreements in the 1HFY22 with leading pharma companies to add 12 products to the dermatology portfolio * Dermatology benefited from eight product launches in the 1HFY22 with generic ABSORICA (isotretinoin) becoming the largest US product by revenue * Recently launched three dermatology products in the 2HFY22 targeting addressable markets of US$450m1 including a top three dermatology product by IQVIA sales, generic ACZONE (dapsone) and generic PROTOPIC (tacrolimus) * Received Therapeutic Goods Administration (TGA) approval of NEXTSTELLIS and Swissmedic approval of KAPANOL for Opioid Substitution Therapy (OST) * Renegotiated debt facilities to increase flexibility

Contact:

Lisa Pendlebury

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Debt and Cash Flow

The Company ended the half with net debt of $272.6m. Cash on hand was $114.7m at 31 December 2021 and the Company had borrowing of $387.3m. The Company remains compliant within all bank covenants with the leverage ratio 3.2x (covenant 3x) and shareholders' funds of $754m (covenant >$600m) at the end of the period.

The Company achieved positive net operating cash flow. Excluding the movement in working capital and tax, net operating cashflow was $18.8m versus $41.9m in the pcp. Significant cash flow items during the period include $7.3m in gross R&D spend, earnout payments of $12.2m, $4.8m in capital expenditure and $18.3m increase in working capital to support the launch of NEXTSTELLIS and the new dermatology products.

Outlook

Mayne Pharma's success and performance will be heavily influenced by the effective execution of its strategic priorities and will depend on several factors including the timing of FDA approvals, payer coverage and reimbursement, competitive intensity in key product areas and the ongoing impacts of COVID.

Key growth drivers in the near to mid-term are expected to be growth in the dermatology portfolio from recent product launches, the launch of a number of new products in international markets, the potential launch of a generic version of NUVARING and further growth of Metrics Contract Services.

NEXTSTELLIS remains the Company's most significant commercial opportunity participating in the US$3.4b short-acting combined hormonal contraceptive market with nearly 10 million American women using CHCs for their contraceptive needs. Continued growth and productivity of new writers, greater payer coverage and the launch of the direct-to-consumer campaign are key factors that are expected to accelerate the sales trajectory of this product.

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