x Abu Dhabi, UAEWednesday 17 January 2018

Hikma upbeat after strong first half

Jordanian drugmaker Hikma revises its revenue forecast upwards for the third time this year to 20 per cent.

Hikma expects 20 per cent revenue growth for the current year over the last. Ali Jarekji / Reuters
Hikma expects 20 per cent revenue growth for the current year over the last. Ali Jarekji / Reuters

The Jordanian pharmaceutical maker Hikma reported strong growth in first-half revenueon sales of an antibiotic as it raised its full year revenue outlook for the third time in as many months.

The company, listed on Nasdaq Dubai and in London, generated US$638.3 million in revenue, an almost 20 per cent increase over the same period last year.

The generic drug specialist now expects 20 per cent revenue growth for the current year over the last. The company sells its products in Europe, the Middle East and North Africa (Mena), and the United States.

Mena revenue grew by about 46 per cent in the first half of the year.

Hikma's shares were trading at £11.11 around midday yesterday, up 1.93 per cent from Tuesday's close.

Revenue was boosted by sales of the antibiotic doxycycline. Generic drug revenue, which increased by 136.6 per cent to $132m, is expected to reach $230m for the full year.

Business from injectable medicines is expected to report low double-digit revenue growth for the full year.

"The only modest disappointment in the mix was the performance of the branded business, essentially [in] Mena, which was below expectations," said Savvas Neophytou, the executive director of the stockbroker Panmure Gordon, attributing it to exchange rate fluctuations.

The division's revenue growth is expected to be about 11 per cent for the full year.

Last year, the company with a market cap of £2.1 billion received a warning after an inspection by US regulators of its oral-dosage facility in Eatontown, New Jersey. It had to temporarily close the plant.

But the company said its increased revenues had "more than offset the impact of the ongoing remediation" at the plant.

Hikma reported earnings before interest, taxes, depreciation and amortisation of $182.6m from January through June, an increase of about 76 per cent over the same period last year.

"In particular, we are benefiting from strong demand for our products in the US and new product launches," said Mazen Darwazah, Hikma's executive vice chairman and chief executive for Mena.

The Egyptian Company for Pharmaceutical and Chemical Industries, which Hikma bought in January for $22m, is now upgrading its manufacturing facility.

The buoyant US and European market for injectable drugs is expected to hold strong for the rest of the year, the company said.