Hikma Pharmaceuticals says market pressures restricts 2017 revenue
Jordan’s Hikma Pharmaceuticals expects 2018 revenue growth to be in the mid-single digits amid continued pressure on income from its generics business, the company said on Wednesday.
“We delivered a solid performance in 2017 at a challenging time for our industry, demonstrating the benefit of our diversified business model,” said Said Darwazah, executive chairman.
“Profitability in our branded business remained stable and our injectables business was resilient, maintaining strong profitability despite new competitors for our top products and benefiting from our strong market position in the US hospital segment.”
Revenue from generics, which reached $615 million last year, is forecast to range between $550m to $600m this year. Revenue from the injectables business, which had revenue of $783m last year, will hover between $750m and $800m this year.
Last year, revenue reached $1.94 billion, down 1 per cent from 2016, but up 1 per cent in constant currency. Earnings before interest, taxes, depreciation and amortisation reached $488m, up by 3 per cent from 2016, but higher by 7 per cent in constant currency.
Hikma appointed Sigurdur Olafsson as its new chief executive last month, as Jordan’s largest drug maker looks to stabilise its business following a series of cuts to its revenue forecasts.
The company, which develops, manufactures and markets branded and non-branded generic and in-licensed drugs, lowered revenue guidance in November for its generics business for a third time in six months, citing intense competition and regulatory challenges in the United States.
“The increasingly competitive dynamics of the US market, including intense pricing pressure, had a material impact on our generics business and, in particular, on WestWard Columbus,” said Mr Darwazah. “This was further impacted by the delay in approval for our generic version of Advair Diskus. As a result of these headwinds, we have had to take an impairment related to the West-Ward Columbus business to reflect our updated view of the fair value of this business.”
The impairment related to the intangible assets of WestWard Columbus, the US division of Hikma, was $920m, which contributed to the company posting a net loss attributable to shareholders of $843m in 2017 compared with a net profit of $155m in 2016.