MAYNE PHARMA GROUP LIMITED — Capital/Financing Update 2012

Dec 13, 2012

==> picture [106 x 53] intentionally omitted <==

MAYNE PHARMA ANNOUNCES THE ACQUISITION OF KAPANOL[®] IN AUSTRALIA

• Mayne Pharma to acquire Kapanol[®] and related assets in Australia from GlaxoSmithKline for up to A$14.0 million

• For the 12 months ended 31 October 2012, Kapanol[®] generated gross revenue of A$5.5 million

• To support Kapanol[®] and its other domestic products, Mayne Pharma will invest in a national sales force in Australia

• Mayne Pharma will fund the acquisition via a fully underwritten equity placement of A$18.0 million

• Acquisition expected to be EPS accretive[1] in the first full year (FY14)

• Mayne Pharma to undertake a share purchase plan

14 December 2012, Melbourne Australia : Mayne Pharma Group Limited (Mayne Pharma) is pleased to announce that it has entered into a binding agreement to acquire Kapanol[®] and related assets in Australia from GlaxoSmithKline (GSK).

Under the terms of the agreement, Mayne Pharma will acquire the Kapanol[®] trademark, marketing authorisations, product dossier, technical data and product inventory. The existing licence arrangement between Mayne Pharma and GSK will be amended so that Mayne Pharma acquires the rights to sell Kapanol[®] in Australia.

Consideration for the acquisition will be up to A$14.0 million, comprising:

• an upfront cash payment of A$10.125 million and up to A$0.5 million for inventory at completion of the acquisition on 1 February 2013; plus

• A$3.375 million payable on 1 February 2014.

Kapanol[®] is a modified release oral opioid used for the relief of chronic, moderate to severe pain. Kapanol[®] represents 6% of the A$90 million modified release oral opioid analgesic market which is growing at 5% per annum driven by strong underlying fundamentals such as an ageing population, increasing incidence of cancer and increased use in non-malignant chronic pain[2] .

Mayne Pharma originally developed Kapanol[®] in the 1990s in collaboration with GSK and currently manufactures the product for GSK which distributes it in Australia and other international markets. For the 12 months to 31 October 2012, Kapanol[®] generated gross sales of A$5.5 million in Australia. This transaction does not effect Mayne Pharma‟s existing distribution arrangements with GSK for international markets.

1 Excludes non-cash amortisation of intangibles. 2 IMS Health.

1

Mayne Pharma‟s CEO, Mr Scott Richards said “Kapanol[®] represents a natural bolt-on opportunity for Mayne Pharma enabling us to now market and distribute this product in Australia in addition to manufacturing it. We know the product well and have been manufacturing the product for GSK for almost 20 years. We are very attracted by the underlying fundamentals of the opioid analgesic market and see Kapanol[®] as providing the foundation to establishing a specialty product franchise in Australia.”

“Kapanol[®] provides us with the necessary scale to invest in a sales force which will reinvigorate sales of Kapanol[®] and support our other existing products such as Astrix[®] , Doryx[®] , Eryc[®] , and Magnoplasm[®] , as well as positioning Mayne Pharma as a more attractive in-licensing partner for international specialty pharmaceutical companies and their products.”

Financial outlook and impact of the acquisition

Mayne Pharma confirms that, prior to the acquisition of Kapanol[®] , it is on track to achieve the earnings guidance for FY13 as disclosed at the time of the Metrics, Inc. acquisition[3] .

After accounting for the investment in sales and marketing activities, the elimination of Mayne Pharma‟s existing earnings from manufacturing Kapanol[®] and the impact of the Placement, the acquisition is expected to be immediately additive to Mayne Pharma's adjusted NPAT and EPS accretive in its first full financial year (FY14)[4] .

Capital raising to fund the acquisition

The acquisition consideration (including the deferred component) will be funded from the proceeds of an A$18.0 million underwritten share placement to institutional and sophisticated investors ( Offer ).

The Offer will be made at A$0.295 per share ( Placement Price ), representing:

• a 7.8% discount to the closing price on 13 December 2012; and

• a 8.5% discount to the 5-day VWAP.

The Offer will result in the issue of approximately 61.0 million new ordinary shares (representing approximately 12.7% of Mayne Pharma‟s existing issued share capital). The new ordinary shares will rank equally with existing ordinary shares. The balance of the proceeds of the Offer will be used for general corporate purposes, including accelerating the development, registration and marketing of Mayne Pharma's existing product pipeline.

Settlement of the Offer is expected to occur on 20 December 2012 with quotation of the new shares expected on 21 December 2012.

The Offer is fully underwritten by Credit Suisse (Australia) Limited and UBS AG, Australia Branch. The placement agreement is subject to customary conditions precedent and termination events.

3 Page 37 of the presentation lodged with ASX on 4 October 2012 "Acquisition of Metrics, Inc."

4 Adjusted NPAT and EPS excludes transaction costs and non-cash amortisation of intangibles.

2

Share Purchase Plan

A share purchase plan („SPP‟) will also be launched to allow eligible shareholders with registered addresses in Australia or New Zealand the opportunity to subscribe for new shares in Mayne Pharma up to the maximum value of A$10,000 per eligible shareholder at the Placement Price.

The record date for the SPP will be 5.00 p.m. (Melbourne time) on Thursday 13 December 2012. Mayne Pharma reserves its right to scale back applications under the SPP if total demand under the SPP exceeds A$5.0 million. Details of the SPP will be provided to eligible shareholders after completion of the placement.

Further information

Shareholders are advised to refer to the “Acquisition of Kapanol[®] ” presentation released to the ASX this morning for further details of the acquisition and the Offer.

For further information contact:

Scott Richards (CEO) 03 8614 7706 Mark Cansdale (CFO) 03 8614 7705 Lisa Pendlebury (Investor Relations) 0419 548 434, lisa.pendlebury@maynepharma.com

NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS

This document may not be released or distributed in the United States. This document does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States. Any securities described in this document have not been, and will not be, registered under the US Securities Act of 1933 and may not be offered or sold in the United States except in transactions exempt from, or not subject to, registration under the US Securities Act and applicable US state securities laws.

3