Risk

I'm an MYX long so don't take this as down-ramping. But aside from the good long term stories re Nuvaring and the new WH deal, there is a bit of risk remaining in the short term. In the FY results they called out 2 products that were driving the decline in generics - dofetilide and liothyronine. Dofetilide has been smashed by generic competitors and now only has $13m revenue (though still represents 5% of generics division sales) and liothyronine while up YoY was down 42% H2 vs H1 to $43m for the FY, suggesting that H1 was around $28m and H1 $16m. So based on this even if revenues hold at the H2 trend then there is already $11m decline expected this FY. Liothyronine at $43m makes up 19% of generic division revenues. To hazard a guess, there is every chance both products decline further and bring in a combined $25-30m - $25-30m lower than last FY. That's another 10% total decline on a total portfolio that declined 7% excluding dofetilide. This is a massive problem no?

Also, while further growth will come from specialty brands we can't expect it to counteract the full generics decline. Half of the ~100% growth on the previous FY was due to doryx returns. When you look in the presentation slides at the H2 contribution of Tolsura and Lexette, this represents less than $5m for the half.

Based on the above, I would expect generics could drop another 40m in revenue and I don't see this being offset by specialty. Maybe when you include MCS and MPI. And if they do see some more favorable results from competitors withdrawing then that will help. But all in all, unless Nuvaring is approved over the Aus summer then I expect the SP to trend as is into Feb results and then who knows where it goes depending on the results...

Ofcourse my long term view is still very positive (1-3-5 years out), but I can totally see why the SP is still where it is right now. Which is disappointing.

Please challenge my view if you think otherwise!