August 9, 2019 / 6:29 AM / 3 months ago

Hikma improves forecasts as CEO plans specialty pharma push

(Reuters) - London-listed drugmaker Hikma (HIK.L) improved annual revenue forecasts for its generic and injectables businesses on Friday as its boss looks to transform the company into a specialty pharma business.

Hikma said it expected annual sales in its largest unit injectables in a range of $870 million (£719.3 million) to $900 million, against a prior forecast of $850 million to $900 million.

The company, founded in Jordan in 1978, expects generics revenue in a range of $690 million to $720 million for the full year, compared with its earlier forecast of $650 million to $700 million.

The company said core earnings rose 14.3% to $288 million in the six months ended June 30 from a year earlier, helped by strong performances in Saudi Arabia and Egypt.

Hikma shares jumped to their highest level in nine months and were up 7.6% at 1,981 pence by 0858 GMT.

The upbeat forecast comes as Chief Executive Siggi Olafsson completes a year and a half at the helm and as generic drug launches have helped offset price erosion as the Trump administration clamps down on high medicine costs.

Hikma has in the past faced higher price pressures than the rest of the industry and had re-negotiated contracts with suppliers to cut costs.

“I think today the pricing pressure is a little less,” Olafsson told Reuters, though he added that pressure on prices would be a long-term theme for the industry.

Hikma saw 37 new products launched in the first half and was on track to deliver seven to eight launches in generics in the United States this year.

Hikma will also launch 15 products in its injectable business, which includes needle-based treatments for pain relief and cancer and which has been growing as it links with more manufacturing partners and signs more deals to produce copycat treatments.

Olafsson sees Hikma changing from a generics company to a more specialty company focusing on drugs that are not a priority for big pharma, including antibiotics and medicines in the Middle East and North Africa (MENA) region.

“I put out quite an aggressive guidance when I first joined the company .... I think we are getting very close to that,” Olafsson said. “In five years time my goal would be to slowly transform the company into more of a specialty company.”

Reporting by Justin George Varghese and Pushkala Aripaka in Bengaluru; Editing by Rashmi Aich and David Holmes

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