* U.S. states sue Mylan Pharma, others for fixing drug
* Probe will not have material impact on future earnings
* Mayne Pharma shares plunge to 10-month low in early trade
(Adds details on the U.S. lawsuit, analyst quote on share
By Colin Packham
SYDNEY, Dec 16 Shares in Mayne Pharma Group Ltd
plunged as much as 24 percent on Friday after several
U.S. states filed a lawsuit alleging the Australian
pharmaceutical firm had engaged in a conspiracy with others to
fix prices on two generic drugs.
Twenty U.S. states filed the lawsuit on Thursday and named,
apart from Mayne Pharma, Mylan NV, Teva Pharmaceuticals
, Heritage Pharmaceuticals Inc, Aurobindo Pharma
and Citron Pharma LLC. They alleged company executives
had propped up prices of the generic versions of the antibiotic
doxycycline hyclate and diabetes medicine glyburide.
"Beginning as early as 2013, defendants Heritage, Mylan and
Mayne knowingly agreed to allocate and divide the market for the
generic drug Doxy DR," the U.S. Department of Justice (DOJ)said
in a filing on Thursday.
The lawsuit is one piece of a broader generic drug pricing
probe under way in the United States. It has grown over the past
two years to include multiple drugs and companies, some of which
have said they are being investigated by the DOJ.
While the lawsuit exposes affected companies to potential
financial penalties, Mayne Pharma said in a statement to the
Australian Stock Exchange on Friday that its board "continues to
believe the investigation and the legal proceedings will not
have a material impact on its future earnings".
It did not say whether it intended to fight the lawsuit. A
spokeswoman for Mayne Pharma did not return calls.
Mylan and Teva have denied the charges, while Heritage -
part of India's Emcure Pharmaceuticals - has blamed former
executives for fixing prices and said those employees had been
terminated. The other companies named in the suit had no
Shares in Mayne Pharma - which had a market capitalisation
of A$2.14 billion ($1.58 billion) as of Thursday - slid to a
10-month low of A$1.08 earlier on Friday, but recovered slightly
to trade down about 11 percent at A$1.28 by 0451 GMT.
"Mayne Pharma is a very retail-driven stock. As we have seen
many times with biotech, when there is even a hint of problem,
people will exit the stock quite dramatically," said Chris
Kallos, equities analyst at Morningstar.
($1 = 1.3585 Australian dollars)
(Reporting by Colin Packham; Editing by Stephen Coates and