Hikma makes 'encouraging' start to year, shareholders told

Hikma Pharmaceuticals told shareholders its year had begun with an “encouraging start” on Friday, as they gathered for the annual general meeting, with the global Injectables business particularly said to be performing “well”.

The FTSE 250 drugmaker said that in the US, the breadth of the injectables product portfolio, enhanced by six product launches in the year to date, was enabling the company to meet increased demand across its marketed portfolio.

That demand was more than offsetting increasing competition on certain key products, the board reported, though it continued to expect competition to accelerate over the course of the year.

In Europe, Hikma said it was benefitting from “good demand” for its marketed products in each of its key markets.

For the Middle East-North Africa (MENA) region, strong revenue growth was being driven by recent launches, including an acceleration in biosimilar sales.

For the full year, Hikma said it continued to expect injectables revenue to be in the range of $750m to $800m, with the core Injectables operating margin to return to more normalised levels in the low to mid 30s.

The company’s generics business also had a good start to the year, investors were told.

While market conditions in the US retail market remained “challenging”, Hikma said it was benefitting from a favourable product mix.

The board said it continued to focus on optimising its cost base, and remained on track to complete the consolidation of its manufacturing and distribution facilities in the second half of the year, as it had previously announced.

During the quarter, Hikma initiated its repeat clinical endpoint study for generic Advair Diskus.

That study was said to be proceeding as planned, with the company expecting to submit a response to the FDA with the new clinical data as early as possible in 2019.

Hikma reiterated its expectations for generics revenues in 2018 in the range of $550m to $600m, and a core generics operating margin in the low-single digits.

Finally, Hikma’s branded business was also performing well, with demand for the portfolio of products and recent product launches in “top markets” driving sales growth.

As in 2017, the board expected a stronger second half, reflecting the usual seasonality of the business.

Hikma said it continued to expect branded revenue growth for the full year to be in the mid-single digits in constant currency, as the firm benefit from new launches of its branded generics and in-licensed products across key markets.

“The year is off to an encouraging start,” said CEO Siggi Olafsson.

“In the first four months, our injectables generics and branded businesses are benefiting from our broad product portfolio and recent product launches.

“Our efforts to reduce costs across the group are on track and we continue to focus on enhancing and investing in our pipeline.”

Olafsson said the company’s cash position remained “very healthy”, and its balance sheet was strong.

“Altogether, these factors reinforce our positive outlook for the Group and enable us to reiterate our guidance for the full year.”

Hikma said it would announce its interim results for the six months to 30 June on 15 August.