Business SummaryMayne Pharma Group Limited (MYX) is a pharmaceutical company thatdevelops and manufactures branded and generic products, which itdistributes directly or through distribution partners in Australia, USA, Europeand Asia. Mayne Pharma has two drug development and manufacturingfacilities based in Salisbury, Australia and Greenville, NC, USA.

Drug Delivery: MYX provides oral drug delivery technologies to reformulatesolid oral dose forms of branded prescription products, generic prescriptionproducts, branded over the counter products and active pharmaceuticalingredients.

Products: MYX's proprietary products are sold in Australia, USA, Canada,UK, Korea, Hong Kong and Singapore. Its products include Astrix (forcardiovascular disease), Doryx (for adjunctive treatment of severe acne),Eryc (for treatment of bacterial infections), Kadian (for management ofchronic pain), Magnoplasm (initial treatment in abscesses and blind pimples),Urocarb (cute postoperative and postpartum non-obstructive urinaryretention), Kapanol (sustained release oral formulation of morphine sulphateindicated), Percutane Pain Relief cream and Percutane Sports cream(designed to rub in easily and absorb rapidly into the skin leaving no lastingodour), Doryx MPC (doxycycline hyclate delayed-release), Ephedrineinjection (25mg/1ml), budesonide extendedrelease capsules (3mg), morphinesulfate extended-release tablets (15mg, 30mg, 60mg and 100mg),temozolomide capsules (5mg, 20mg, 100mg, 140mg, 180mg and 250mg),linezolid injectable (2mg/ ml), amiodarone tablets (100mg), MYX has brandedproducts - Mayne Pharma Aspirin tablets, Mayne Pharma Doxycyclinecapsules and Mayne Pharma Erythromycin capsules.

Services: MYX offers product development options in conjunction withassociated services. MYX also provides a range of services that assistpartners' products in the areas of Oral Drug Delivery Systems, Liquids &Creams, and Generic Oral product Manufacturing and services for start-upbiotechnology companies.

Manufacturing: MYX has been involved with commercial contractmanufacturing of oral products, as well as commercial manufacture of inhouse products. Acquired US marketing rights to the fentanyl transdermaldelivery system (25 mcg/hr, 50 mcg/hr, 75 mcg/hr and 100mcg/hr)

Acquisition: On 18 August 2016, Mayne Pharma Group acquired a portfolioof dermatology foam products and related assets from GlaxoSmithKline.Completed acquisition of 42 generic products from Teva PharmaceuticalIndustries Limited (Teva) and Allergan plc.

Latest ResearchEarnings Woes Continue

There were few surprises in the 1H20 earnings result for MYX. Thecompany had warned of a modest first half result at the AGM and the resultwas in line with this expectation. Overall revenues declined by 17% vs pcpto $227.1m while EBITDA declined by 46% to $34.6m. The companyreported a net loss after tax of $17.5m. Net cash flow from operations was$46.2m, down by 14% vs pcp.

For more information see research 25 Feb 2020.

GICS - Pharm/Biotech

Mayne Pharma Group Limited

ASX Code: MYX Price: $0.380 12 Mth Target Price: $0.35 Rating: Hold

Important Disclaimer - This may affect your legal rights: Because this document has been prepared without consideration of any specific client's financial situation, particular needs and investmentobjectives, a Bell Potter Securities Limited investment adviser (or the financial services licensee, or the proper authority of such licensee, who has provided you with this report by arrangement withBell Potter Securities Limited) should be consulted before any investment decision is made. While this document is based on the information from sources which are considered reliable, Bell PotterSecurities Limited, its directors, employees and consultants do not represent, warrant or guarantee, expressly or impliedly, that the information contained in this document is complete or accurate.Nor does Bell Potter Securities Limited accept any responsibility to inform you of any matter that subsequently comes to its notice, which may affect any of the information contained in this document.This document is a private communication to clients and is not intended for public circulation or for the use of any third party, without the prior approval of Bell Potter Securities Limited. This is generalinvestment advice only and does not constitute advice to any person.Disclosure of Interest: Bell Potter Securities Limited receives commission from dealing in securities and its authorised representatives, or introducers of business, may directly share in thiscommission. Bell Potter Securities and its associates may hold shares in the companies recommended.

Snapshot

DateMarket Cap.Shares on issue12 Month High12 Month Low

25 April 2020$638m1,679.1m$0.74$0.20

RatingRating12 Mth Target Price

Capital GainGross Yield

Implied Total Return

Hold$0.35-1.4%NA%-1.4%

Investment FundamentalsFYE 30 Jun 2019A 2020F 2021F 2022F

Profit $m 65.1 39.7 87.4 95.9Profit (norm)* $m 65.1 39.7 87.4 95.9

EPS* ¢ 4.0 2.4 5.2 5.7EPS Growth % -43.0 -40.6 117.0 9.8P/E* x 8.8 14.8 6.8 6.2P/E Relative % 0.0 0.0 0.0 0.0

DPS ¢ 0.0 0.0 0.0 0.0Yield % 0.0 0.0 0.0 0.0Franking % 0.0 0.0 0.0 0.0* Adjusted for goodwill and unusual itemsSource: Based on Bell Potter estimates

Share Price Chart

Total Return on $10,000 Investment

Profit & Loss ($M)2015A 2016A 2017A 2018A 2019A

Sales Revenue 140 266 572 529 524Total Revenue ex. Int. 148 274 606 533 527EBITDA 35 87 209 134 117Depreciation & Amort. -14 -21 -74 -80 -94Goodwill Amortisation -- -- -- -- --EBIT 22 65 135 55 23Net Interest -6 -2 -11 -17 -17Profit Before Tax 16 63 124 37 6Income Tax -4 -15 -30 4 -6Outside Equity Int. 0 3 3 0 3Profit after Tax 13 51 96 42 3Significant Items after Tax -5 -13 -8 -176 -284Reported Profit after Tax 8 37 89 -134 -281Preferred Dividends -- -- -- -- --

Cash Flow ($M)2015A 2016A 2017A 2018A 2019A

Receipts from Customers 111 209 560 646 714Funds from Operations 42 102 42 160 128Net Operating Cashflow 22 54 -15 121 107Capex -84 -63 -1,084 -94 -82Acquisitions & Investments 0 -- -- -1 -0Sale of Invest. & Subsid. -- -- -- -- --Net Investing Cashflow -96 -84 -1,098 -118 -92Proceeds from Issues 119 5 892 2 7Dividends Paid -- -- -- -- --Net Financing Cashflow 115 18 1,130 20 -16Net Increase Cash 42 -12 17 23 -1Cash at Beginning 15 60 48 63 87Exchange Rate Adjust. 2 1 -1 1 2Cash at End 59 47 63 87 89

Ratios and Substantial Shareholders2015A 2016A 2017A 2018A 2019A

Profitability RatiosEBITDA Margin % 25.25 32.59 36.48 25.42 22.36EBIT Margin % 15.63 24.55 23.59 10.32 4.33Net Profit Margin % 9.16 19.10 16.84 7.92 0.52Return on Equity % 4.14 13.98 7.38 3.42 0.27Return on Assets % 3.29 3.40 5.47 2.97 0.92

Debt/Safety RatiosNet Debt/Equity % 0.79 8.02 21.12 23.23 27.65Interest Cover x 3.92 32.15 12.01 3.18 1.37

Top 5 Substantial ShareholdersInvestors Mutual Ltd 8.7%

Balance Sheet ($M)2015A 2016A 2017A 2018A 2019A

Cash & Equivalent 59 47 63 87 89Receivables 65 124 233 253 257Inventories 22 39 106 82 100Other Current Assets 11 899 27 59 26Current Assets 157 1,109 429 481 472Prop. Plant & Equipment 60 84 189 230 236Intangibles 303 332 1,235 1,055 798Other Non-Current Assets 11 899 27 59 26Non-Current Assets 372 449 1,486 1,350 1,164Total Assets 529 1,557 1,915 1,831 1,636Interest Bearing Debt 62 78 340 374 369Other Liabilities 145 1,103 262 221 253Total Liabilities 207 1,181 602 595 622Net Assets 322 376 1,312 1,235 1,014Share Capital 256 263 1,130 1,132 1,140Reserves 31 39 23 71 125Retained Earnings 24 62 150 24 -257Outside Equity Int. 11 12 9 9 6Total Shareholders Equity 322 376 1,312 1,235 1,014

Current Analyst Recommendations *

* Source: Morningstar. This chart shows the spread of recommendations from thosebroker analyst's in Australia with research coverage of this stock.

Principals & DirectorsPrincipals

Company Secretary Ms Laura Loftus

Directors

Mr Roger Campbell Corbett(Non-Executive Director,Non-ExecutiveChairman)Mr Bruce L Mathieson(Non-Executive Director)Mr Frank Condella(Non-Executive Director)Mr Ian Frank Scholes(Non-Executive Director)Ms Nancy Dolan(Non-Executive Director)Mr Scott Anthony Richards(Chief Executive Officer,ManagingDirector)Professor Bruce Gregory Robinson(Non-Executive Director)Mr Patrick J Blake(Non-Executive Director)

To access further Research or for information regarding our recommendations and ratings please seewww.bellpotter.com.au

© 2020 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liabilityfor its use or distribution. Any Morningstar ratings/recommendations contained in this report are based on the full research report available from Morningstar or your adviser. Any general advice or ‘class service’ havebeen prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation orneeds. Refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. You should consider the advice in light of these matters and if applicable, the relevant ProductDisclosure Statement before making any decision to invest. Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Past performancedoes not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Some material is copyright and published under licence fromASX Operations Pty Ltd ACN 004 523 782.

Mayne Pharma Group Limited

Bell Potter Securities Research

AFS Licence No. 243480 ABN 25 006 390 772

Email info@bellpotter.com.au

Website www.bellpotter.com.au