Cosette loses appeal over Mayne decision

By the Editorial Team · Thursday, October 15, 2026

The Supreme Court of New South Wales upheld the ruling that Cosette Pharmaceuticals must complete its takeover of Mayne Pharma, rejecting Cosette's appeal to cancel the deal despite FDA regulatory concerns. This decision solidifies Cosette’s legal obligation to proceed, leaving potential regulatory intervention as the only remaining option to halt the acquisition.

The Supreme Court of New South Wales has rejected Cosette Pharmaceuticals’ appeal against a previous ruling that upheld its obligation to complete the takeover of Mayne Pharma, an Australian Securities Exchange-listed drugmaker. The unanimous decision reinforces the earlier finding that Cosette cannot unilaterally withdraw from the acquisition agreement.

Cosette had sought to terminate the deal following concerns raised by the U.S. Food and Drug Administration (FDA) regarding Mayne’s marketing of its Nextstellis contraceptive product. The FDA identified that Mayne’s promotional materials downplayed health risks and contained misleading information about breast cancer, prompting Mayne to cease using the presentation and comply with regulatory directives. Despite these actions, Cosette argued that the FDA’s findings constituted a material adverse change (MAC), which would legally permit it to exit the transaction.

However, the court found that while Mayne’s third-quarter sales performance for fiscal year 2025 showed an adverse change, it did not meet the threshold of a material adverse change as defined in the share implementation deed. Justice Stephen Free noted that the trial judge correctly determined Cosette had affirmed the agreement after becoming aware of the relevant facts undermining Cosette’s MAC claim.

This ruling aligns with a prior decision by Justice Ashley Black in October, who similarly dismissed Cosette’s claim, stating that the FDA letter did not provide sufficient grounds for contract termination. The appeal loss leaves Cosette reliant on regulatory intervention to cancel the acquisition, a move previously exercised by Australia’s Treasurer Jim Chalmers. Chalmers blocked the takeover, citing concerns over local job losses after Cosette indicated plans to close Mayne’s manufacturing facility in Salisbury, South Australia, and cut around 200 positions.

Mayne’s chair, Bruce Robinson, expressed satisfaction with the court’s decision, emphasizing that Mayne remains committed to enhancing shareholder value and strengthening its business. Robinson also indicated that Mayne will continue legal proceedings seeking damages from Cosette, its CEO David Burghstahler, and controlling investor Avista Capital.

Following the court announcement, Mayne’s shares surged 6.7% to $2.71 on Tuesday. Since the bid was publicly launched by Cosette in February 2025, offering $7.40 per share valued at $672 million, Mayne’s stock price has declined sharply amid FDA scrutiny and the drawn-out legal dispute. The company’s market capitalization now stands at approximately $208 million, significantly below the initial offer price.

Cosette, a U.S. private equity-owned entity, described itself as reviewing the judgment and considering its legal options. A spokesperson reaffirmed Cosette’s position that it has acted lawfully and in good faith and stated that the ruling will not affect ongoing proceedings or the company’s operations.

The takeover controversy underscores tensions between regulatory oversight, corporate governance, and local economic considerations in cross-border pharmaceutical acquisitions.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.