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Mayne shares dive on US lawsuit news

AAP logoAAP 16/12/2016 Prashant Mehra

Shares in Mayne Pharma have plummeted after the company confirmed on Friday that multiple US states have started legal proceedings against it and several other drug makers over alleged anti-competitive conduct in the US.

Mayne's shares closed 8.8 per cent weaker at $1.30, but had slid to as low as $1.07 earlier in the session.

The company disclosed in November it had been issued a subpoena by the antitrust division of the US Department of Justice in relation to marketing, pricing and sales of doxycycline hyclate delayed-release antibiotic tablets and potassium chloride powders.

On Friday, it said a number of US states had commenced legal proceedings in the US District Court of Connecticut against several US generic companies.

The suit was filed against Mayne Pharma, Mylan, Teva Pharmaceuticals, Heritage Pharmaceuticals, Aurobindo Pharma and Citron Pharma, with the states alleging company executives propped up the prices of the two drugs, according to a Reuters report.

"The US states allege that Mayne Pharma had engaged in conduct in the doxycycline hyclate delayed-release market with Heritage Pharmaceuticals Industries Inc., that was anti-competitive," Mayne Pharma said in a statement.

Mayne said its board had reviewed the complaint, and continues to believe the investigations and the legal proceedings will not have a material impact on its future earnings.

However the company said "no assurance can be given" on the timing or outcome of the investigation or legal proceedings.

In August , the pharmaceuticals maker had predicted significant growth for 2016/17 from its recent purchase of a suite of US generic drugs from Teva Pharmaceutical and Allergan. It had reported a more than quadrupling of profit in the 2015/16 financial year.

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