Hikma Pharmaceuticals nudges down FY revenue guidance

Hikma Pharmaceuticals said on Thursday that it is currently generating “good” revenue growth, but it nudged down its full-year revenue guidance, saying it now expects it to rise by around 35% to $2bn at constant currency, down from a previous range of $2bn to $2.1bn.

The injectables division has been performing well in the year to date thanks to investments across its geographies to broaden the company’s portfolio and strengthen manufacturing capabilities.

Meanwhile, in the US, good demand across a number of products and new product launches have more than offset increased competition for certain products.

The group said it remains on course to deliver global injectables revenue growth in the mid to high-single digits this year. In addition, thanks to a favourable product mix, it now expects the core operating margin to be around 39%, up from previous guidance of 38%.

Hikma said it has been more challenging than expected since August to generate volume growth in certain products in the generics business. This is expected to continue throughout the rest of the year and the group said full-year revenue in the segment is likely to come in at around $600m.

It still sees full-year core operating profit at between $30m and $40m, reflecting cost savings, including the optimisation of research and development expenses.

In 2017, the enlarged generics business is expected to generate revenue of around $800m.

In the branded division, Hikma has seen a steady improvement in revenue at constant currency in the second half. Due to its focus on higher quality sales and a more challenging environment in the GCC, overall growth has been slightly lower than it was anticipating, however.

The company said the full-year results for the segment on a reported basis will be hit by currency headwinds, which have become more challenging since the recent devaluation of the Egyptian pound.

On a constant currency basis, branded revenue growth is likely to be in the mid-single digits.

Chairman and chief executive Said Darwazah said: “Across the group, we are improving the quality of sales and focusing on profitability. Our global injectables business is delivering good growth and extremely strong margins. In MENA, our focus on strategic products and greater operating efficiencies is helping to absorb strong currency headwinds.

In Generics, the integration of the West-Ward Columbus acquisition is progressing well and we are rapidly implementing cost savings. Although revenue from West-Ward Columbus is ramping up more slowly than originally anticipated, we remain highly confident in the future prospects of the business.”

At 1145 GMT, the shares were down 2.4% to 1,721p.