Good morning, everybody. Welcome to the 42nd Annual JP Morgan Healthcare Conference. My name is Dan Delfico. I'm one of the Associates on the banking team here. This morning, it's my pleasure to introduce to you Mayne Pharma. With us today, we have CEO, Shawn O'Brien, CFO, Aaron Gray, and EVP Commercial, Daniel Moore. Just a reminder that at the end of the presentation, there'll be a Q&A session. We'll have a mic being passed around, and with that, I'll turn it over to Shawn.
Thank you, Dan and JP Morgan team, for this opportunity to share the Mayne transformation story. We're moving this company from a high capital-intense business to a high-growth, high-margin business. As I said, Aaron Gray, our CFO, and Daniel Moore, are here to join me for the Q&A period. On our disclaimer slide, I'd just like to bring to your attention that these results are unaudited, that I'm sharing with you today, of October year- to- date, 4 months. Our fiscal year is June 30th, and so we report on Australian IFRS basis and not a GAAP basis. All the numbers reported here today are either Australian dollars, and I'll highlight if they are in U.S. dollars. The historical numbers represent the go-forward businesses, as we go forward.
Looking at the agenda today, I'm gonna share where we were 18 months ago, highlight the progress we have made against our goals, and provide some insights on how the dermatology and women's health represent our growth drivers in the United States. 18 months ago, Mayne was nearly bankrupt, with a capital-intense business to drive its growth. While our CDMO and generics business represented almost 60% of our revenue, both of these sectors were not succeeding, due to various factors. Our CDMO represented 21%. We required a significant amount of capital to keep that moving, and we really didn't have scale in the U.S. generic space. Our dermatology business was subject to significant pricing pressures, and our women's health business was based on one product, NEXTSTELLIS, which was actually not launched effectively initially.
Coupled with a large debt of over $300 million, this business needed significant changes, and I'll highlight what we've done to make that happen. In a very short period of time, 2023 was a really busy year. First, we set out to reduce the complexity of the business, refocusing on our core segments. To this end, we completed the sale of Metrics Contract Services and subsequently sold our U.S. generics business for a combined total of $565 million. We expanded the position in the U.S. women's health by acquiring exclusive commercialization rights for a portfolio of three branded contraceptive and menopausal products and a portfolio of prenatal vitamins. Secondly, we set about delivering successful commercialization of our flagship product. It's an oral contraceptive, NEXTSTELLIS.
We refreshed our marketing strategy and relaunched the product in the second half of fiscal year 2023 to strong results. For the full year, NEXTSTELLIS revenue was up 276% compared to fiscal 2022. The momentum is continuing to build, and the unit sales are increasing at 40% from the second half prior to the first half of fiscal year 2023. The strength of the NEXTSTELLIS relaunch, combined with the successful integration of the products we acquired from TXMD in January of 2023, resulted in transformation of our U.S. women's health business. Third, we had to address the challenges of the dermatology business due to commercial practices, co-pay charges, and pricing pressures we were seeing, which were first articulated last November, when we actually showed negative net sales for our business at the AGM.
I'm pleased to report that we saw a significant rebound in the second half of fiscal year 2023, with a 314% increase in our dermatology revenue in that period, that half and returned the business back to positive contribution. And finally, we made changes to our international division, our Australian-based, specialty CDMO and specialty-based pharmaceutical business, to improve manufacturing performance and our margin and commercial execution in the marketplace. We have adopted a conservative stance to our financial capital management as we transform the business with the large impact of these transactions and work through a significant number of legacy issues, with our final objective set Mayne on a path towards generating positive operating cash and returning the business to significant profitable growth.
We achieved positive operating cash flow of AUD 14 million in the second half of fiscal year 2023, and following our various asset sales, we ended up the year with a net cash position in June 30th of AUD 173 million. Then compared this to a year prior of a net debt position of AUD 317 million. We also commenced an on-market buyback of up to 10%, and we recently increased that last November up to 15%. So significant changes in the last 18 months, and really pleased with the results as shown with the numbers here that I'm sharing with you. This looks at a four month running period from July 1st through October 30th, and it shows the net sales of AUD 125 million.
And we want to remind you that we reported roughly $186 million for full year, fiscal year 2023. So, looking at a run rate of $375 million for fiscal year 2024, if you look at these numbers. So the sequential increase that we saw on the prior four-month period is 30%. Our gross margin was up 50% to $72 million, roughly, and the underlying EBITDA was $1 million. We've achieved four of our goals that we set out for fiscal year 2024, and that's making all three business units contribution positive and EBITDA positive for the whole entire business. Our two primary segments showed strong results, and we're particularly pleased with the turnaround dermatology business after a lot of work by the team to get the business back on track.
Sales were up 55% sequentially, and the margin is recovering, thanks to better performance of the core portfolio and recent new product launches. Women's Health, which is roughly 96% of our branded product portfolio, had net sales up 45% sequentially, with growth in NEXTSTELLIS and the licensed portfolio of products in IMVEXXY, ANNOVERA, and BIJUVA. For NEXTSTELLIS, it's worth noting that after a drop in net selling price in fiscal year 2023, largely due to one-off effects, our net selling price is fully recovered to prior levels, and we see opportunity for that to expand. The licensed portfolio is improving, and we remain conservative in our approach to gross to net accounting as we finalize the integration of these assets into our company. As I mentioned, all three operating segments delivered positive contribution margin during the four-month period.
In addition to driving sales growth, we initiated a cost and efficiency program to reduce costs in absolute terms wherever possible and ensure that the ROI needed from the sales and marketing investments are there. As mentioned earlier, we're adopting a conservative approach to our capital management as we work through last year's transactions. With that overview, I'll go in each segment with a little more information. First, dermatology, which is a significant turnaround. So looking at our business, in the dermatology business, we have six proprietary brands and over 20 generic and authorized generic dermatologics that we provide to our customers. Our newest product is RHOFADE, an FDA-approved topical cream used to treat rosacea. As of today, the Mayne Pharma dermatology portfolio actually can satisfy one-third of the medical prescriptions written in the U.S. for dermatological products.
So I mentioned earlier, the teams undertake significant work to restructure and introduce new commercial disciplines in this business, and we're seeing the results now, but there's still a way to go. We're on track to deliver sustainable potential of our dermatology franchise as we continue to build on our market position with a strong, profitable pipeline of products and meet broader product patient needs while leveraging our unique platform, and which I'll highlight, which we call disintermediation. We have expected between October 2023 and June 2024 to launch 10 products in this segment. Financially, looking at a year-to-date results, and this is in U.S. figures, our performance is really strong in the turnaround. We started late in the fall of 2023.
In October year to date FY, compared to the prior period, we saw a 55.5% net sales increase and a 174% increase in the margin. We're seeing improved gross to net in our channel strategy and individual economic decisioning is driving much more sustainable and better results. We've introduced co-pay monitoring, which will drive improvements in the gross to net, and most of our business is driven on a cash basis in this market, which has been subject to significant payer negative payer actions in this area. As I mentioned, we've launched several new products in this in target, and we're seeing solid performance.
Our disintermediation strategy is active, and our goal is to generate positive contribution and cash contribution from this business on a yearly basis, and we're already achieving that in the first four months. So looking at our disintermediation, Mayne has an ability. Let me talk about what we're trying to solve here. A lot of people go into dermatology because they didn't want to be on call. It's a lifestyle practice, and the payers put them on call. Over the years, the payers have done a significant job of making their work a lot tougher, and we're trying to solve that problem for both the physicians and the patients.
Patients don't like the sticker shock they get at the pharmacy, and so we have incorporated working with GoodRx, a platform, and AssistRx, to be able to tell the patients within a very short period of time, less than a minute, what it's gonna cost them out of pocket. And 70% of our business today is cash-driven through this model. So we have our own mail order pharmacy, Adelaide Apothecary. It's licensed in every state in the nation, and we have over 400 pharmacies that we've contracted to distribute our products in the marketplace. We're working with significant partners like Sandoz and Galderma to bring their products in through our channel and make sure that these patients can get what they need when the physician writes that product.
So we're really excited about our, our business model that we have here, and it's working well. And let me demonstrate that i n script growth. The top line here shows that we've now become the number one market share with DORYX, i n that market share segment. It's the top blue line here you look at, the continued growth. The middle blue line here is our Asia performance, and it continues to grow and driving the number one market share. And then recently, we picked up the global rights for RHOFADE and launched that in October. And you can see we took it from a small position, as Novan had taken it off the market and driven it back to the prescription levels that it saw prior to the launch.
We paid $8 million for this product upfront, plus, obviously, working capital getting in. In the first 2 months on the market, we did $5.2 million net sales. So we're really excited about what we're achieving and the turnaround in dermatology, and we're gonna continue to use this disintermediation strategy right across the business and in women's health. Women's health, which is 96% of our branded product portfolio division, is really the significant growth driver for the business for the next 15 years. So if you look at a quick snapshot here, we have reproductive health and menopause management and prenatal vitamins right across the Board. During 2023, we made several key moves to strengthen this portfolio.
While we're already recognized and established name with some of the patients and providers, we built on it by acquiring these products from TXMD. When, as I mentioned prior, we really had a launch misstep, where our launch for NEXTSTELLIS had a incongruent marketing strategy and sales strategy. We went after Lo Lo and really got pegged in on one significant profile of the product, where we have less bleeding. We really picked up patients who had endometriosis or fibroid issues associated with bleeding, and that really didn't work. We'll give you some more highlights on the specifics of NEXTSTELLIS. In addition, we have a strong patent portfolio here, and we enhanced our patent portfolio.
Announced on November 6th that we secured an Orange Book-listed patent to 2036 for NEXTSTELLIS, so improving our ability to market this a longer period of time. So financially, what we're seeing here is a significant upgrowth. If you look at the prior similar period, we're up sixfold from $5 million to $30 million and up roughly 50% on a sequential basis for our women's health division. And we've delivered $5.2 million in net contribution in that four-month period. So as I mentioned, our NEXTSTELLIS retargeting strategy is working. We have restored our net selling price, and we continue to refine and streamline our marketing strategy. In fact, we limited $8 million in direct-to-consumer expenses because we weren't seeing the ROI from that investment.
We've seen some other companies in the women's health area actually spend significant amount of monies and create financial stress for the company in trying to achieve that. We'll continue to look at the ROI and all our marketing investments in the across women's health. But throughout the rest of fiscal year 2024, we expect the complete integration of the expansion products and deliver continued growth across all four brands. Now we're pursuing a growth strategy with the launch of BIJUVA, half-strength or low strength. In addition, we're looking at making sure that we enforce the wherever possible the ACA law, ensuring that patients do not have to take out-of-pocket expenses to get birth control.
We've recently seen the state of Vermont enact a lawsuit against not only commercial payers but the federal government on this front, and we hope to see more action across the country on that. So looking at NEXTSTELLIS, there's a lot of information on your left-hand side of the slide, that tells really this is a naturally occurring estrogen. It's the first estrogen to come to the market in 60 years. It is the estrogen that everybody experienced when they were a fetus in their mother. It's called E4, and it has unique selective properties. And I'm not gonna go into all of them, but it, you know, results in less breast tenderness, less acne, less effect on the liver, less effect on cholesterol.
So what we have here is we have the same progesterone as drospirenone, is the progesterone as Yaz. And really, effectively, we're positioning this product in the marketplace as Yaz Plus. You have all the benefits you've seen and enjoyed with Yaz, and you have a better estrogen backing the product. So as I said, we refreshed the strategy. We've also actually hired 8 MSLs to educate the market on the benefits of the E4, which we didn't launch before I came on board. And then we continue to look on the ROI and make sure that we're driving this women's health business and NEXTSTELLIS forward in a profitable way.
I'm really pleased that we've achieved one milestone that we set out for this product, and it's to get a run rate breakeven, i.e., the volume and value that we're getting on the net selling price of the product on a cycle basis equals what we're investing in that moment. From this moment on, NEXTSTELLIS is a profitable product. So we're excited about that we achieved that goal that we set out for the business and appreciate Daniel's good work to make that happen. So briefly looking at these licensed portfolio, we're really pleased. We have patent protection from 2032 to 2039 for ANNOVERA, IMVEXXY, and BIJUVA. BIJUVA is the first and only FDA-approved combination bio-identical estradiol and progesterone product for VMS.
As you see, NEXTSTELLIS is quite active in the marketplace, selling their, and communicating the benefits of treating VMS in post-menopausal women, and we're going to see a lift. And so just this week, we launched the half-strength dose of BIJUVA, and to create more access for patients to the market for this important therapy. ANNOVERA is a self-inserted vaginal ring for contraceptive, and the patients can get a full clinical effect for up to a one-year period. And so there's a good lifetime value when we get a generated prescription for that business. So if I look at the outlook of the business, in dermatology, as I mentioned, we have 10 launches of note. SOOLANTRA was launched last week, and generic Accutane is being launched this month, and Dapsone 5%, will be launched towards the next quarter.
In women's health, we just launched BIJUVA this week. Working with GoodRx, you know, it's been a good experience. The NPS score for GoodRx is in the 90s, so both consumers and physicians really like this tool. And then having the backbone AssistRx to ensure that we actually know all the data behind the patient's out-of-pocket costs and what it's gonna cost, we are able to transact and create that commitment and create that adherence to our products. We'll continue to work with the policy people on the ACA enforcement for contraceptives, and look forward for that tipping point for that to come through, which would improve our gross to net, obviously.
And then we can continue to ensure that we can deliver our products in innovative ways, and then make sure that we have the right products for our patients, both in dermatology and women's health. And then financially, looking at the, you know, what are the drivers for the business here? You know, completing the integration for the women's health, continue the growth there that we've seen for NEXTSTELLIS, ANNOVERA, BIJUVA, and with that new launch and act on the ACA wherever possible. We expect and have delivered contribution margin from all three business segments and continue to see that happen for the rest of the year. We expect to be cash flow positive by the end of the year.
From an operating standpoint, on a go-forward basis, we've had positive operating cash flow, as we communicated for the first four months of the business. The negative cash burn has all been on residual effects of the prior businesses that we have sold. The international business, we haven't spent much time on that, but we're really investing to ensure that when we bring the capacity up to speed, procurement, and supply chain, and improve the productivity of that facility, as well as penetrating what we can with NEXTSTELLIS in Australia.
And then dermatology, with 10 launches in a very short period of time, and this meeting has been very productive for others to see what we can do for their products. In dermatology, we expect to bring more products into the marketplace through our model. So I'm open to questions that you have on the business, and I'll sit down and Aaron, myself, and Daniel answer any questions you have at this point. Thank you for the opportunity.
Thank you again for the great presentation, Shawn. I'll start us off. Maybe going with the derm portfolio in particular, can you touch on how your strategy allows you to be profitable in that segment and what you're doing differently versus others?
Sure. Daniel, you want to take that?
Sure, I'll take that. I think what we've seen in dermatology, really over the last 10 years, is payer coverage has eroded considerably through plan design changes or exclusion lists, whatever it may be. So we've set ourselves on a mission that's really been ongoing for some time to be profitable at cash. So we wanna make sure that patients can access our products in a way that they're willing to pay the out-of-pocket costs.
And that's kind of culminating in our partnership with GoodRx Prescription Services and our wholly owned pharmacy, where we're developing real relationships with patients and prescribers and meeting them where their needs are. Because the underlying conditions didn't change, their access to medications did. So we wanna make sure that we're able to provide them, again, the products that their prescriber wants them to have, at an affordable and reasonable cost.
Maybe turning to the women's health portfolio, can you just touch on your level of IP protection in that area?
You wanna cover that, Daniel?
Sure. So, really excited about what we recently announced on NEXTSTELLIS with patent coverage through 2036. And a big driver of the in-licensing of the assets that we completed a little over a year ago, and ANNOVERA, BIJUVA, and IMVEXXY, was the fact that not only did the products serve meaningful needs of women, but also we had patent protection for a long period of time, from 2032 to 2039. Which gives us time to integrate the products and market them effectively and really generate a great return for our shareholders.
In addition to that, the hurdles for a product like ANNOVERA, for a generic company to reproduce that, is significant, north of $50 million. So you know, there's a patent to 2039, but will somebody actually have the ability and the economics to come to the market? So, that could be a product that we don't see an LOE, possibly.
And then maybe can you just touch on how you're planning to continue to drive profitable growth in that women's health segment?
Yeah, that's a really good question because, unfortunately, we've seen the one, all the big pharma people walk away from women's health. We've seen recent announcements of reductions in commercial efforts from AbbVie and Organon. In addition, some of the smaller companies who have come to the market as a one-product company or have spent significant amount of money to drive revenue and put themselves in very stressful financial situations.
And so that's part of the discipline we've had in managing our women's health portfolio, is making sure that we're getting ROI, and that was a key driver to make sure that we could get NEXTSTELLIS to a break-even run rate really quickly, and then continue to invest, you know, with the patents that we have, that Daniel highlighted here. It's important that we just put the right investment back in. So it's really about commercial excellence and operational excellence to ensure that we don't get in front of our skis and deliver and communicate the benefits to the patients. I've learned over the years that 50% of your marketing is misspent, so figure out which 50% is misspent and don't spend it.
Do you plan to list in the U.S.?
Yes, we're an Australian-listed stock. It's a part of Aaron's team's work agreement right now, is making our team Sarbanes-Oxley ready. You know, t his is 80% of our revenue is based out of the U.S. And you know, we report in Australian dollars, but eventually we're gonna get here, where you know, I don't think this is a market for an IPO of that sort. So, there's obviously strategic sales and existing shells in the marketplace that could make sense, but we got to get the business ready. So I don't know if Aaron want to talk about, the most important thing is really gross to net getting the team ready.
Yep. So gross to net is the, obviously, for any pharma company, that's the single largest. Thank you. That's the single largest, topic financially, that anybody has to deal with in pharma. Gross to net, if you have a billion-dollar company, gross to net can be $700 million. And so, making sure that that is, controlled, that that meets Sarbanes-Oxley, SOX 404 and PCAOB audit requirements, that's the first step. There's several steps after that that still have to be completed, but that, that work is ongoing.
Maybe one more from my end, just broadly, can you just maybe expand on some of t he initiatives you're taking to continued growth going forward?
Sure. Well, the number one driver is the growth that we have organically is huge. You saw the numbers. We had $186 million in revenue last year. We did $125 million or $375 million run rate. We're gonna be over $400 million this year. So it's the organic growth and delivering to the commercial excellence we have there. We talked about the launches we have in dermatology and bringing that in. You know, 60% of the margins coming from RHOFADE and ORACEA right now in that sector.
And now we just launched WYNZORA with a partnership with MC2. And so, you know, it's the launches in dermatology, it's the growth of the generics. And then on the women's health side, we see opportunity for us to bring in more products in the future, but right now we're focused on making sure we can drive the growth of ANNOVERA, BIJUVA, IMVEXXY, and NEXTSTELLIS. There's a lot of headroom there.
Well, if nothing else, thank you so much for the great presentation, and I hope you all have a great rest of the conference.
Thanks, Dan. Appreciate it.
Thank you.