Mayne Pharma to pay A$33M in class action settlement on alleged US conduct

Mayne Pharma (ASX:MYX) has announced it will pay A$38M – $4.7M covered by insurance – to settle a class action brought against it in 2021.

The class action was brought against MYX in Victoria’s Supreme Court with those eligible being shareholders who bought in between 24 November 2014 and 15 December 2016.

“As previously disclosed, the proceeding relates to alleged misleading or deceptive conduct and breaches of continuous disclosure obligations in respect of alleged anti-competitive conduct in the United States,” the company wrote on Tuesday.

“[Conduct] that was previously the subject of investigations by the US Department of Justice and the Office of the Attorney General in the State of Connecticut.”

Mayne Pharma will pay that owing not covered by insurance out of its existing cash reserves. The settlement includes interest, legal costs, and legal fees.

Mayne clarified it held cash of $146.8M at 31 December 2023 “and has sufficient cash reserves for its operations.”

Outlook for FY24 is unchanged.

The settlement sees Mayne pay without any admission of liability to alleged conduct in the US and Australia where suggested respectively.

“The agreement to settle was a commercial decision made in the best interests of Mayne Pharma shareholders. The resolution of this matter enables Mayne Pharma to avoid the distraction and significant expense of a lengthy trial,” the company added.

MYX last traded at $4.64/sh.