REG - Hikma Pharmaceutical - Trading Statement

Hikma PharmaceuticalsAnnouncement

03/11/2022 07:01

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RNS Number : 1372F  Hikma Pharmaceuticals Plc  03 November 2022

Hikma reiterates full year segmental guidance, with strong momentum in
Injectables and Branded

 

London, 3 November 2022 - Hikma Pharmaceuticals PLC (Hikma, Group), the
multinational pharmaceutical group, today provides an update on current
trading.

 

Said Darwazah, Executive Chairman and Chief Executive Officer of Hikma, said:

 

"I am pleased to reiterate full year guidance for all three of our businesses.
We are seeing strong momentum in our Branded and Injectables businesses,
reflecting the benefits of their increasingly broad and differentiated product
portfolios, leading market positions and our flexible high-quality
manufacturing footprint. While the US generics market continues to be
competitive, our Generics business is performing in line with the guidance we
set out at our interim results and we continue to expect this business to grow
in 2023."

 

 

Injectables

 

Our global Injectables business is performing well, maintaining the positive
momentum seen in the first half. In the US, we are delivering strong growth,
benefitting from our broad and growing portfolio of over 130 products, new
launches and a good contribution from the newly acquired Custopharm portfolio.

 

In Europe and Rest of World, we are benefitting from strong demand for our
products, particularly in Germany where we are responding to market shortages.
Canada is also performing well following the acquisition of Teligent's
Canadian assets earlier in the year. In MENA, we are seeing good demand across
most of our markets, with particularly strong growth in Saudi Arabia, driven
by our biosimilar products and successful new launches.

 

We are also making good strategic progress across our Injectables business. In
the US, we have launched nine new products since the beginning of the year and
have good momentum in the establishment of our compounding business. In MENA,
we continue to benefit from our strong local presence and are strengthening
our manufacturing capabilities in Egypt, Algeria and Morocco.

 

For the full year, we continue to expect Injectables revenue growth in the mid
to high-single digits and now expect to be at the top end of our core
operating margin guidance of 36% to 37%.

 

 

Branded

 

Our Branded business is performing well. We are benefitting from an
increasingly diversified portfolio of high value products focusing on chronic
illnesses. Our tier one markets, particularly Algeria and Egypt, are
performing strongly on a constant currency basis. Other markets such as
Morocco and Iraq are also performing well.

 

Our focus on building a portfolio of chronic treatments, as well as our
ability to leverage our global capabilities and operate locally across MENA,
continues to drive momentum in our underlying business. In Saudi Arabia, we
are benefitting from commercial improvements, enabling us to focus our
promotional efforts on key therapeutic areas such as respiratory and diabetes,
where we are gaining market share. We are also gaining market share in
Algeria, where we are benefitting from strong growth in our oral oncology
portfolio.

 

We continue to expect full year Branded revenue to grow in the low
single-digits on a reported basis, despite currency devaluations in our North
African markets, particularly Egypt. On a constant currency basis, we expect
Branded revenue to grow in the mid-single digits.  We continue to expect core
operating profit to be more evenly split across the year.

 

 

Generics

 

The outlook for our Generics business remains unchanged since we updated the
market in August.  While we continue to see low double-digit price erosion
and mid-single digit volume erosion in the US, our actions to reduce costs and
improve efficiencies, in combination with our strong customer relationships
and broad portfolio, are enabling us to maintain a healthy core operating
margin in the mid-teens. We continue to focus on building a diversified
product portfolio of differentiated generics and specialty products, and are
leveraging our manufacturing facility for more contract manufacturing
opportunities, which will help improve the resilience of this business.

 

For the full year, we continue to expect Generics revenue to be in the range
of $650 million to $675 million and core operating margin to be between 15% to
16%.

 

 

Impact of inflation and interest rates on the Group

 

We are increasingly seeing the effects of the global inflationary environment
on costs, as expected when we announced our interim results. We have been
managing this through tight control of costs and a focus on operating
efficiencies. These impacts are reflected in our guidance.

 

Due to increasing interest rates, we now expect core net finance expense to be
around $74 million, compared to our previous guidance of around $68 million.

 

 

Board evolution and CEO search

 

Since August, we have appointed three new independent non-executive directors
to the Board.  Laura Balan, Victoria Hull and Deneen Vojta collectively bring
a wealth of experience covering the US and global healthcare industries and
the UK capital markets. We now have 45% female representation on the Board.

 

The search for a new CEO remains on track and an update will be provided when
an appointment is made.

 

We will announce our preliminary results for the year ended 31 December 2022
on 23 February 2023.

--  ENDS  --

Enquiries:

Hikma (Investors)

 Susan Ringdal                                               +44 (0)20 7399 2760/ +44 7776 477050

 EVP, Strategic Planning and Global Affairs
 Guy Featherstone                                            +44 (0)20 3892 4389/ +44 7795 896738

 Associate Director, Investor
 Relations
 Layan Kalisse                                               +44 (0)20 7399 2788/ +44 7970 709912

 Senior Associate, Investor
 Relations

 Teneo (Press)

 Charles Armitstead

 Camilla Cunningham                                          + 44 (0) 7703 330269

                                                             + 44 (0) 7464 982426

 

About Hikma

Hikma Pharmaceuticals PLC (LSE: HIK) (NASDAQ Dubai: HIK) (OTC: HKMPY)
(LEI:549300BNS685UXH4JI75) (rated BBB-/stable S&P and BBB-/stable Fitch)

 

Hikma helps put better health within reach every day for millions of people
around the world. For more than 40 years, we've been creating high-quality
medicines and making them accessible to the people who need them.
Headquartered in the UK, we are a global company with a local presence across
North America, the Middle East and North Africa (MENA) and Europe, and we use
our unique insight and expertise to transform cutting-edge science into
innovative solutions that transform people's lives. We're committed to our
customers, and the people they care for, and by thinking creatively and acting
practically, we provide them with a broad range of branded and non-branded
generic medicines. Together, our 8,700 colleagues are helping to shape a
healthier world that enriches all our communities. We are a leading licensing
partner, and through our venture capital arm, are helping bring innovative
health technologies to people around the world. For more information, please
visit: www.hikma.com
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