Mayne Pharma and Mithra plan to introduce the ‘next generation’ oral contraceptive

Mayne Pharma ASX MYX Mithra Pharmaceuticals oral contraceptive Estetrol drospirenone
Mayne Pharma has signed a 20-year exclusive supply and license agreement with Mithra Pharmaceuticals to commercialise a novel oral contraceptive.

The world could see a novel method of contraception following Mayne Pharma’s (ASX: MYX) exclusive licence and supply agreement with Mithra to commercialise E4/DRSP, a combined oral contraceptive in the US.

The deal was hailed as “transformational” by Mayne Pharma chief executive officer Scott Richards and if the product is approved, it could hit US store shelves as soon as 2021.

The two companies have been partners since 2017 with Mayne Pharma keen to establish this new line of commerce to supplement its core therapeutic area of women’s health.

Mayne Pharma said that the product is expected to be EBITDA positive in its first full financial year following approval with peak net sales potential in excess of US$200 million per year.

Under the terms of the agreement, Mayne Pharma will pay up to US$295 million (A$440 million) comprised of US$8.75 million in cash and 4.95% of Mayne Pharma’s ordinary shares. Mayne Pharma has also agreed to pay US$11 million in cash and a further 4.65% of Mayne Pharma’s ordinary shares following FDA approval.

The company has already confirmed that contingent payments based on reaching cumulative net sales targets will also be included.

The total consideration of US$295 million would be paid if cumulative net sales of E4/DRSP exceed US$2.25 billion (A$3.35 billion). Moreover, the agreement includes a future seat on Mayne Pharma’s board following FDA regulatory approval.

“This agreement further strengthens our strategic partnership with Mithra, a company dedicated to the development of Women’s Health products and enables additional collaboration opportunities between the companies. We welcome the nomination by Mithra of a new Board member,” said Mr Roger Corbett, chairman of Mayne Pharma.

Market touchdown

According to Mayne Pharma, its new product will be launched in the first half of 2021 but remains subject to FDA approval.

If approved, Estetrol (E4) will be the first native estrogen approved in a contraceptive product in the US and the first new estrogen introduced in the US in approximately 50 years.

Upon FDA approval, the product is expected to receive a five-year New Chemical Entity (NCE) exclusivity status from the FDA with potential for patent protection beyond 2030.

The pharmaceutical company claims that E4/DRSP is a “next-generation” combined oral contraceptive composed of 15mg Estetrol (E4) and 3mg drospirenone (DRSP).

In two separate phase 3 clinical studies conducted in 3,725 women, E4/DRSP showed positive top-line results against primary efficacy and safety endpoints and achieved positive secondary endpoints including good bleeding profile, cycle control and tolerability.

Moving into the next generation

Estetrol (E4) is a native estrogen produced by the human foetal liver during pregnancy which Mithra is able to produce using a plant-based production process following more than 20 years of research and development.

“This transaction transforms Mayne Pharma and is highly consistent with our stated strategy to build our specialty business with durable, high growth novel products in core therapeutic categories leveraging our commercial capability and associated know-how in the US,” said Mr Scott Richards, chief executive officer of Mayne Pharma.

“This product is expected to be a foundation asset in Women’s Health for many years to come and has a strong and synergistic fit with Mayne Pharma’s currently marketed portfolio of more than 20 branded generic contraceptives and existing pipeline products such as generic NUVARING for which we are targeting approval in 2020,” Mr Richards said.

According to consultant company IQVIA, the US contraceptive market is currently valued at US$5.4 billion (A$8 billion) with the short-acting combined hormonal contraceptives (CHCs) component estimated at US$4 billion including close to 135 million units sold annually.

Mayne Pharma’s shares to edged up over 14% up to $0.60 in late morning trade.

George is an award-winning market analyst who has authored articles and editorial opinion pieces for multiple publications around the world. He has written about a wide variety of topics including financial markets, stocks, trading, politics and economics.