The company has chosen to settle rather than continue to defend itself in court.
Mayne Pharma has agreed to pay $38 million to settle a class action lawsuit brought against the company in August 2021 by a group of Australian shareholders.
The shareholders, led by plaintiff Benjumin Hillman, alleged that Mayne Pharma “contravened its continuous disclosure obligations” and “engaged in misleading or deceptive conduct”.
The proceeding brought before the Supreme Court of Victoria claimed that investors who bought shares in Mayne Pharma between 24 November 2014 and 15 December 2016 were entitled to compensation for loss and damage “as they paid more for those shares than they would have paid as a consequence of Mayne Pharma’s conduct”.
It was alleged Mayne Pharma failed to properly inform the market about “alleged discussions and agreements its US subsidiary had with Heritage Pharmaceuticals” in relation to sales of its doxycycline hyclate delayed release tablets, which could be regarded as “anti-competitive and contrary to US law”.
The class action also alleged some plaintiffs would not have bought shares in Mayne Pharma at all if the company had complied with its obligations.
Today Mayne Pharma announced it had reached a “binding agreement” to settle the action.
“The agreed settlement amount is $38 million, of which approximately $4.7 million is funded by insurance, with the remainder to be paid from Mayne Pharma’s cash reserves,” said the announcement.
“The settlement amount is in full and final settlement of the proceeding including interest, litigation costs, and the plaintiff’s legal fees.
“The settlement is without any admission of liability by Mayne Pharma – both with respect to the alleged underlying anti-competitive conduct in the United States, and the alleged misleading or deceptive conduct and breaches of continuous disclosure obligations – and is subject to Court approval.
“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, and to remain focused on driving growth and shareholder value through its core commercial business.”