Mayne Pharma (ASX: MYX) Threatens to Terminate A$672M Cosette Deal- Is the Stock a Buy at A$3.39?

The tables have turned, and shareholders face a key decision as the 10 December deadline approaches.

Mayne Pharma (ASX: MYX) has turned the tables on US suitor Cosette Pharmaceuticals, issuing a termination notice alleging “wilful and intentional” breaches of their A$672 million takeover agreement. The Adelaide-based company, which spent much of 2025 fighting Cosette’s attempts to exit the deal, now claims it has grounds to walk away if breaches continue until 10 December 2025.
For shareholders who’ve watched MYX swing from A$7.40 (the deal price) to A$3.39 today, a 54 per cent drop, the question is simple: is the standalone business worth owning at these levels?

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How a A$672 Million Deal Fell Apart

The Mayne-Cosette saga has become one of the most contentious M&A disputes on the ASX this year. When Cosette agreed to acquire Mayne at A$7.40 per share in February 2025, it looked like a clean exit for shareholders. But things quickly went wrong. In May and June, Cosette tried to cancel the deal, saying Mayne’s weaker earnings and an FDA warning letter were a “material adverse change.” In October, the NSW Supreme Court ruled that Cosette had already given up its right to cancel.

The final setback came when Cosette announced plans to shut Mayne’s Salisbury plant in South Australia, which employs more than 200 people. On 21 November, Treasurer Jim Chalmers blocked the deal, saying it was against the national interest. Now Mayne claims Cosette deliberately damaged its own chances of approval, a move that could lead to legal action over the A$6.7 million break fee and possible extra damages.

What’s the Business Actually Worth?

Setting aside the takeover drama, Mayne Pharma operates a genuine pharmaceutical business with improving fundamentals.

FY25 highlights paint a healthier picture:

• Revenue grew 5 per cent to A$408 million
• Underlying EBITDA more than doubled to A$47 million
• Operating cash flow surged 460 per cent to A$45.4 million
• Gross margins expanded to 60.6 per cent from 56.3 per cent

The company has about A$100 million in cash and investments, giving it enough funds to keep operations running smoothly. However, it still posted a net loss of A$90.1 million for the year. The Women’s Health division is the main growth driver, with revenue up 23% thanks to products like Nextstellis and Annovera. Meanwhile, the Salisbury plant, once at risk of closure, has just finished a major modernisation upgrade.

The Investor’s Takeaway

At A$3.39, Mayne Pharma trades well below its 52-week high of A$7.31 and at a market capitalisation of roughly A$280 million. With A$100 million in cash and securities, you’re effectively paying around A$180 million for the operating business, less than four times EBITDA.
This price seems cheap if the business keeps improving. Analysts currently rate the stock a Hold with a price target of A$5.00, pointing to nearly 50% upside.

However, investors should weigh these risks:

• Legal battles with Cosette could drag on for months and distract management
• Dermatology sales declined due to competitive pressures
• No alternative buyer has emerged yet

For risk-tolerant investors, Mayne Pharma at A$3.39 appears undervalued relative to its improving fundamentals and asset base. Conservative investors may prefer to wait until the 10 December deadline passes and legal clarity emerges. Either way, this stock deserves a spot on watchlists. The dramatic discount to both the deal price and analyst targets suggests the market may be pricing in too much uncertainty.