30th Apr 2020 09:42
(Alliance News) - Hikma Pharmaceuticals PLC on Thursday said its year started well despite tough market conditions and reiterated its annual guidance.
Shares in Hikma were up 4.3% at 2,430.43 pence in London in morning trading.
The pharmaceuticals company still expects to report low-to-mid single-digit revenue growth from its Injectables business in 2020 as a result of demand across all of its markets as well as the launch of new products. In 2019, Injectables revenue grew 8% to USD894 million.
On top of this, Hikma's Injectables core operating margin is forecast to be between 35% and 37% in 2020, down from 38% in 2019.
"While we are pleased with our performance in the year to date, our guidance reflects the uncertain operating environment brought about by the Covid-19 pandemic," said Hikma.
The company's Injectables business is performing well globally, with higher demand in Europe and the US - partly driven by Covid-19.
Hikma's Injectables portfolio includes "anaesthetics, analgesics, sedatives, neuromuscular blocking agents and anti-infectives", it noted, which are "most in need by hospitals during the current pandemic".
Hikma also has obtained US Food & Drug Administration approval for the first of its products from its new Portuguese high-containment facility, meaning it can begin supplying the US market.
Within the company's Generics business, the year also started well and demand has been strong, especially for nasal sprays, with "some additional demand related to Covid-19".
Annual Generics revenue for 2020 is forecast as between USD700 million and USD750 million, following a 4% rise in 2019 to USD719 million. Generics revenue guidance assumes the launch of a generic version of GlaxoSmithKline PLC's Advair Diskus inhaler, a product which treats asthma and chronic obstructive pulmonary disease.
Generics' core operating margin is expected to be between 16% an 18%, having been 17% in 2019. With the launch of the Advair Diskus generic, this forecast rises to around 20%.
Finally, Hikma said its Branded business has done well, with increased demand in some markets from the Covid-19 crisis, although some of its manufacturing facilities saw "slight disruptions". The company said it remained confident in Branded's outlook, and is still expecting mid-single digit constant currency revenue growth in 2020. Branded revenue grew 6% at constant currency in 2019 to USD583 million.
Chief Executive Siggi Olafsson said: "Hikma has made a strong start to the year despite the challenging market conditions that have arisen as a result of Covid-19. This is a complex situation which we are continually monitoring, but we have confidence in the outlook for the group and we are pleased to reiterate our full year guidance for 2020."
Separately, Hikma said it has appointed Douglas Hurt, former finance director of engineering company IMI PLC, as an independent non-executive director. His appointment is effective from Friday.
Hurt has also "held a number of senior finance and general management positions" at drug maker GlaxoSmithKline PLC since joining in 1983.
By Anna Farley; [email protected]
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