Hikma has reduced its net debt from $697 million to $633 million in the first half of 2017, and has maintained healthy leverage ratios, as it said in its half year financial report.
With Group revenue up by 1% in the period, of $895 million, the company said it expects 2017 Group revenue to be around $2.0 billion in constant currency after lowering our guidance for the Generics business.
“We now expect Generics revenue to be around $620 million and core Generics operating profit to be around $30 million in 2017,” the company said.
Said Darwazah, Chairman and Chief Executive Officer of Hikma, said that the Group has delivered stable revenue and profitability in the first half of 2017 in an increasingly challenging environment.
In the US, where competition is increasing and pricing pressure is intensifying, sales in Hikma’s Injectables business were resilient and, as the CEO said, it maintained its track record of strong profitability.
“The tougher market conditions did however continue to limit growth in our Generics business. We remain focused on executing our Generics strategy and we have strengthened the management team and further restructured the cost base to provide a robust and efficient platform to support pipeline execution and future growth,” Darwazah said.
Whilst Branded revenue declined in the first half, primarily as a result of the devaluation of the Egyptian pound at the end of 2016 and shipment delays during Ramadan and Eid, Hikma’s first chair said he remains confident that to deliver a much stronger performance in the second half of the year.
He said: “Across the Group, we are taking actions to deliver value from our marketed products, invest in our pipeline and enhance the efficiency of our operations, to ensure we remain well positioned for future growth.”
During H1 2017, the Generics business launched 7 products, including all dosage forms and strengths, and received 14 product approvals.
Hikma noted that it announced on May 11, 2017 that the US Food and Drug Administration (FDA) had issued a complete response letter (CRL) in relation to its abbreviated new drug application (ANDA) for its generic version of GlaxoSmithKline’s Advair Diskus, and since then, supported by its partner Vectura, HIkma has had constructive discussions with the FDA and it said it has been able to clarify and resolve a number of the questions raised. “We are in ongoing discussions with the FDA to address the remaining questions and will provide a more detailed update to the market as soon as we are able to do so.
We now expect Generics revenue to be around $620 million for the full year, reflecting the impact of increased competition on prices and volumes. Through our focus on portfolio optimisation and continued cost savings, we expect the Generics business to achieve core operating profit of around $30 million in 2017,” Hikma said in its statement.