At a Glance
- Companies: Mayne Pharma; Cosette Pharmaceuticals
- Location: Australia (Supreme Court of New South Wales); US-based acquirer
- Deal value: Proposed acquisition of Mayne Pharma for about $672 million
- Focus area: Specialty pharmaceuticals
- Next steps: Ongoing court proceedings and potential enforcement of costs and SID obligations
What happened?
Mayne Pharma has formally rejected Cosette Pharmaceuticals’ attempt to terminate their scheme implementation deed (SID), arguing that Cosette’s termination notice is invalid and the deal remains legally binding. The move follows Cosette’s claim that a material adverse change (MAC) and an unsatisfied Foreign Investment Review Board (FIRB) condition justified walking away from the agreement.
Why does it matter?
The dispute puts a spotlight on how MAC clauses and regulatory approvals are interpreted in large pharma transactions, particularly in Australia’s foreign investment regime. The outcome could influence how future acquirers manage their obligations under SIDs when regulatory risks or market shifts emerge late in the deal process.
Who’s behind it?
The deal involves Australian-listed Mayne Pharma and Cosette Pharmaceuticals, a US-based speciality pharma company that had agreed to acquire Mayne. The case is being heard in the Supreme Court of New South Wales, which has already issued findings supportive of Mayne’s position that the SID remains valid.
How was it achieved?
Cosette served a termination notice citing a MAC and the failure to satisfy an FIRB condition, but Mayne argues these grounds do not meet the contractual thresholds in the SID. Mayne also contends that Cosette’s own failure to fulfil its SID obligations materially contributed to the FIRB condition not being satisfied, undermining Cosette’s basis for termination.
What’s next?
Mayne has commenced legal proceedings to challenge the termination and enforce its rights under the SID, including the potential enforcement of costs orders against Cosette. The company has indicated it will keep shareholders updated as the court process unfolds and as the future of the long-negotiated arrangement becomes clearer.