MYX - Mayne Pharma Group

[peter2]

Along with their declining revenue there's legal problems for generic drug suppliers in the US.
Stocks of generic drug companies fall after more than 40 states file suit alleging price fixing (Marketwatch article). This issue has caused TEVA and MYL to fall much more than the market. It's going to take years to work through the legal system.

 

[galumay]

Fair points from peter2 & Knobby22. Probably easier places to make a $.

 

[JTLP]

One I sold near the top and just got a profit (2%). Thank the lucky stars, this has been a dog.

 

[peter2]

Woof, woof. Seems like the management are still struggling with problems. It appeared in a short scan yesterday (1st red bar) but I can't short this for fear of a buyout offer.

 

[galumay]

Finally! Good old @ROE knows a business to hold and average down into when he sees one. It was his conviction that allowed me to hold through the last couple of years, todays announcement sent it soaring nearly 20% and the shorts are bleeding! I expect there will be more short squeezing tomorrow on the open as there are still quite a few caught in the trap still!

 

[aus_trader]

I am picking this Biotech/Pharma stock for the Nov stock tipping competition. Given that it's been left behind in the 2019 Biotech/Pharma star performers rallies, I think it has a chance to play catch up. Been as high as $2 in the past so there is a chance to see this stock bounce back up.

 

[peter2]

MYX has me thinking about the Disney film "Old Yeller", that I saw as a child. It's about a mongrel dog with a lot of convictions that earns the respect and love of a family.

IMO MYX is certainly a dog, but it came to my attention recently after the high volume break-out of my resistance line at 0.55 (weekly chart arrow). Good first step and it's gone through the down trending emas (13,21 wk).

Sideways consolidation above the R line, promising and worthy of a conditional buy if it trades at 0.63/0.64. Disappointment. Price has now fallen below the line at 0.55. There's too much supply at the higher prices. A few more disappointed long term holders took the opportunity to sell into the high volume pop in price.

The cond order is scrapped, because now I need to see price form a HL on the weekly chart. This will take more time. MYX remains in the reversal watch list. I'm waiting for that HL and then I'll consider buying a break-out >0.65.

 

[galumay]

This dog will have its day! Its just a bloody long time coming! For me its a classic case of buying too soon, being wrong and being too early look the same for a long time.

 

[Klogg]

This dog will have its day! Its just a bloody long time coming! For me its a classic case of buying too soon, being wrong and being too early look the same for a long time.

I was just wrong. My thesis didn't play out, so I sold a while back. Taking such a large loss isn't nice, but better to take the loss when I think I'm wrong.

To be honest, I have no idea how this will play out.

 

[galumay]

To be honest, I was just wrong, too.

 

[peter2]

Market conditions remain difficult for the generic drug suppliers. MYX reports more disappointing numbers. Their only hope seems to be rights to a new female contraception formulation but this is not due for sales until 2021.

The price chart was looking more bullish with a recent BO-HR. I was waiting to see is the test of the BO level would hold. After today's disappointing news it looks like MYX needs more time. I'll throw it in the spec list.

 

[Knobby22]

Yes, it doesn't look good. When I sold in January I never dreamed it would fall this far. Kept looking at buying back but the longer it goes, the worse the news.

 

[peter2]

Is MYX showing signs of life or is it just flailing like a fish out of water?
My pick for the Jan20 monthly comp or have I missed out on a great selection for the 2020 CY comp?

1st Blue bar off support.

 

[Dona Ferentes]

Mayne Pharma ((MYX)) aims to transition away from its generics business, which is under increasing pressure, outlining at the company’s AGM aspirations for more than 60% of FY24 revenue to be generated by US specialty products.

This rebalancing will be led by the commercialisation of the licensing deal with Mithra, ramp up of new specialty products and optimising the women’s health portfolio.

a fair summary of broker views can be found here: https://www.sharecafe.com.au/2019/11/25/mayne-pharma-aspires-to-specialisation/

"while there are interesting growth options, the balance sheet is too weak to transform at a pace that can benefit investors."

 

[Faramir]

Second choice for 2020 tipping competition. Just when everyone thinks a stock is a stinker, this is the time to go in. Unfortunately, I have averaged down enough. I just have to sit and wait. I am expecting MYX to transform itself.

 

[Trav.]

I find this chart interesting as it has had a few counter trend signals and one recent BO attempt which had little momentum and retraced.

Bad signs spotted on chart
- lower Highs since October 2019
- low / average volume in the past week
- trend strength fading
- Big gap down 11% (future o/head resistance) November 2019

Good signs
- accumulating phase approx 2 months
- support holding
- Health sector up


Question - Is there a opportunity to enter on pull back? confirmation required BO > 48.5 / 50 c

Any other thoughts appreciated....

 

[galumay]

I sold out recently, I decided the opportunity cost of leaving capital tied up in the business was too great and I found a better (hopefully!) home for it. I think there may be a reasonable business in there, but its taking so long to materialise! There is a fair bit of debt on the balance sheet and a lot of intangible assets. FCF is pretty sad too.

 

[JTLP]

This is one sad sad stock. Biggest sigh of relief getting out of this.

They are always restructuring and burning cash. Not sure how anyone could have conviction to buy...

 

[Dona Ferentes]

This is one sad sad stock.

They are always restructuring and burning cash...

yup. Awful. Generics is a tough space: "aggressive contracting behaviour driving heightened levels of price deflation" Yikes. Double Yikes. Didn't they know beforehand?

(So glad its a distant memory, one time sell discipline worked for me)

 

[Dona Ferentes]

found this from early 2017. (Dow Jones newswires). nothing has changed it would seem

Things have gone from bad to worse for the generic drug industry just as its biggest players are set to report earnings. The latest sign came late Tuesday. Embattled drugmaker Perrigo said that federal agents executed search warrants at company headquarters, as part of a wide-ranging investigation into price collusion in the generics industry. ...Several other companies have received subpoenas as part of this investigation.

True, a high standard of proof is required in collusion cases. Many federal inquiries end without charges or penalties. And generic drug stocks generally trade for very low earnings multiples. Those facts could give hope to investors when the largest generics companies report earnings next week.

While the investigation could weigh on long-term price increases for generics, there is a more immediate concern; generic drug prices are falling at an accelerating rate. Two small drugmakers joined the parade that has included big pharma companies and drug distributors who are seeing bigger declines in prices.

Lannett cited generic pricing pressure to explain subpar results on Tuesday. Shares fell by 16% on Wednesday. Australian generics company Mayne Pharma Group, which has a large U.S. business, said during its investor day earlier this week that increased pressure from buyers is driving down prices and predicted that declines in the second half of the year could reach as high as 15%.

The latest warnings come after bigger players gave pessimistic forecasts. Novartis said last month that its generic unit experienced price deflation of about 8% in the first quarter. Drug distributor Cardinal Health said last month it expects prices of generics to fall by a low double-digit percentage for the fiscal year ending in June.

Being able to raise prices is particularly important for many drugmakers right now. A slew of deal-making in the sector during the now-distant good times of 2014 and 2015 means companies levered up their balance sheets at the worst possible moment. Heavily indebted Perrigo, to name one example, is down more than 60% over the past two years.

There is no reason to believe that gloomy backdrop will show signs of improvement by next week.

2017, folks. Plus ça change