Health Check: Mayne Pharma and Acrux are on a drug expansion drive, generically speaking

US conditions are conducive to our generic drug makers’ expansion drives
CEOs say Donald Trump’s anointed health czar is likely to face stiff industry opposition if his reform plans become too zany
Percheron chair addresses pay concerns as investors await key trial data

US-focused generics specialists Mayne Pharma (ASX:MYX) and Acrux (ASX:ACR) have little to fear on the Trump administration’s drug pricing policy, given they specialise in tricking up off-patent therapies that are sold cheaply.

At Mayne’s AGM this morning, chairman Frank Condella highlighted the potential of its women’s health (contraception) portfolio – apt given the nation’s tightening anti-abortion laws.

He said Mayne had achieved all its goals for the 2023-24 year, including a return to positive earnings before interest tax depreciation and amortisation (ebitda) and reducing its cost by more than US$10 million.

Mayne reported ebitda of $22.9 million in the year to June 30 2024, compared with a thumping $95.3 million loss previously. Last year’s revenue was $388 million, 112% higher.

Condella notes “substantial operating and financial improvement” across all three divisions: women’s health, dermatology and the international business.

He said Mayne’s important Nextstellis contraception drug – which last year accounted for around 8% of revenue – was breaking even.

“For [the current financial year] and beyond, we see fundamental opportunities for growth in women’s health associated with improved access to contraception in the US and a much greater awareness of the impacts of menopause and its treatment,” Condella said.

“For dermatology, there is a rising incidence of skin diseases translating to higher patient need.”

Earlier in the month Mayne dampened takeover speculation, noting the appointment of Jeffries Australia as an advisor was to “assess [the company’s] strategies for maximising shareholder value.”

Killjoys!

Mayne shares this morning lost 5% to $4.21.

Acrux reports (non) testosterone-fuelled growth spurt

At Acrux’s get-together, CEO Michael Kotsanis promised the company was “close to tipping point” in terms of generating “consistent positive cash flow”.

Acrux has a portfolio of 16 products, three of them revenue-generating and two in late stages of FDA reviews.

“Acrux has a 25 year-plus history of developing topically applied pharmaceutical products,” Kotsanis says.

The company recently launched three drugs, for topical anaesthesia, acne vulgaris and the relief of menopause symptoms.

It’s awaiting FDA approval for two more topical drugs, for anal fissure pain and cold sores.

Well – someone has to do it.

“As our products are approved, Acrux will add new projects in order to maintain a similar number of products in active development,” Kotsanis says.

Meanwhile, Acrux has divested its roll-on testosterone booster, which used to be the company’s mainstay until folk realised the last thing bellicose Americans needed was more of the manly hormone.

Acrux shares lost 2.2% to 4.4 cents.

All the way with RFK (Junior)? Not likely, say CEOs

The biotech sector’s views on life under incoming US health czar Robert F Kennedy Junior are evolving and here are some morsels from two US-based, American CEOs who have popped down to the Antipodes this week.

Alterity Therapeutics (ASX:ATH) CEO Dr David Stamler says proposed reforms such as changes to the drug approval process may be far more muted than expected.

“Everyone is panicking but the reality is he is probably not going to be able to do as much as he wants to do,” he says.

“… Trump and his minions talk a big game, but moving the US government and a huge industry and knocking them down … I don’t believe it is going to happen.”

The quixotic RFK Jr has strong anti-vaccine views and advocates psychedelics research, while he and Donald Trump have promised cheaper drugs and a more efficient health system.

“He [RFK Jr] has made outrageous claims that some people at the FDA should take their notes and pack their bags,” Stamler says.

“I just can’t see the drug approval process being turned upside down. I don’t think the public would stand for that.”

Island Pharmaceuticals (ASX:ILA) chief Dr David Foster says while it’s early days, some signs bode well.

“He [RFK Jr] really wants to reduce a lot of the bureaucracy and focus on getting safe drugs approved and seeing how the market responds – which maybe is not a bad idea,” he says.

“As long as you don’t take shortcuts on safety in getting the drugs approved.”

Stamler says the Trump administration’s most closely watched health decision will be who it appoints as the next FDA commissioner, to replace the Biden appointed Robert M. Califf M.D.

He notes the appointment requires Senate sign-off, which should mitigate the risk of a truly ‘out there’ candidate getting the nod.

On drug pricing, Stamler says any changes would meet the scrutiny of Big Pharma, “which has a strong lobby [group] and wouldn’t let someone totally upend the apple cart.”

Alterity and Island have US-based trial programs, for multiple system atrophy and dengue fever respectively.

Percheron placates pay protestors

At the Percheron Therapeutics’ (ASX:PER) AGM, chairman Dr Charmaine Gittleson acknowledged investor consternation over a sharp rise in board and executive remuneration, despite the increases being in line with sector benchmarks.

“The step-up reported in our 2024 remuneration report has caused consternation amongst shareholders and the board will take under advisement shareholder feedback as we review our compensation policies,” she said.

Admittedly, it’s the first we’ve heard about the backlash and only about 10% of holders voted against the company’s report last year (today’s results weren’t available at the time of writing).

Formerly Antisense Therapeutics, Percheron is in phase 2b trial stage for ATL1102 (avicursen) its putative treatment for rare childhood neurological disorder Duchenne muscular dystrophy.

Percheron reports six-month data next month, the “first significant clinical data read-out that our company has reported for four years”.

A positive read-out will stifle the grumblings and accentuate Percheron’s credentials as the ‘next Neuren Pharmaceuticals (ASX:NEU)‘, which studied Duchenne muscular dystrophy before cracking it big time with its approved Rett syndrome drug.

Percheron shares eased 2.5% to 7.6 cents.

At Stockhead, we tell it as it is. While Island Pharmaceuticals is a Stockhead advertisers, it did not sponsor this article