Hikma Pharmaceuticals PLC and its subsidiaries (‘Hikma’ or ‘Group’), the multinational pharmaceutical company, report its interim results for the six months ended 30 June 2023.
During the first half of 2023, core group revenue grew 18% to $1.427 billion (compared to H1 2022: $1.213 billion), driven by a strong performance in all three businesses. Core operating profit was up 35% to $401 million, reflecting the H1 weighting of Branded and Generics business. A good net cash inflow from operating activities of $222 million was recorded, up 31% from the same period last year.
Said Darwazah, Executive Chairman and Chief Executive Officer of Hikma, said:
“Our strong first-half performance reflects growth across all three of Hikma’s businesses and geographies.
Across our global operations, we have continued to strengthen our businesses and processes, including adding to and enhancing our manufacturing capabilities. Our investments in R&D have yielded several new product launches and pipeline expansion, broadening our differentiated product portfolio. We continue to win important new contracts and expand in new markets, all of which are enabling Hikma to make more medicines accessible to the healthcare providers and patients who need them most.
I am especially delighted that Riad Mishlawi has been appointed as Hikma’s new CEO, effective 1st September 2023. He has an excellent record of delivering business expansion and profitable growth and has been a close colleague for many years. I look forward to continuing working together and capturing the significant opportunities available to Hikma.”
Global Injectables revenue grew 9% to $585 million (compared to H1 2022: $538 million), reflecting a good top-line performance in all markets, including full period contribution from a recent acquisition. We have launched 52 products across our markets, enhanced our pipeline, and are adding capacity to ensure we are well-positioned to capture opportunities and ensure our customers’ needs are met.
We continue to expect Injectables revenue growth of between 7% and 9% and for core operating margin to be between 36% and 37%. This reflects the breadth of our portfolio and ability to launch new products, as well as our growing geographic reach.
Branded performed very well in the first half, with revenue up 11% to $375 million (compared to H1 2022: $339 million), driven by good performance across our markets as well as the early fulfilment of some tenders in our larger markets. Our oncology products had a good performance and our strategy of focusing on treatments for chronic illnesses continues to be a margin driver. We further reinforced our position as one of the leading providers of oncology medicines in MENA, launching nine oral oncology products across the region.
We continue to expect Branded revenue growth to be in the mid to high-single digits in constant currency, reflecting strong growth across our markets, which should more than offset the halting of our operations in Sudan as a result of the ongoing conflict in the country. This resulted in $92 million of impairment and costs in H1 2023. On a reported basis, we expect revenue and core operating profit to be broadly in line with 2022.
Generics revenue grew 39% to $460 million in H1 2023 (compared to H1 2022: $330 million), due to a strong performance from the base business, both in terms of volumes and a lower level of price erosion. We have also strengthened our contract manufacturing pipeline in Generics with new contract wins.
Looking ahead at the full year 2023, we now expect Generics revenue growth of close to 30%, up from our previous guidance of revenue growth of close to 20%, and for core operating margin to be between 18% and 20%, up from 16% to 18%.
We are a top-three provider of generic sterile injectables by volume in the US, the third-largest pharmaceutical company in the MENA region, and the twelfth-largest supplier of non-injectable generic medicines in the US.
Our strategic progress positions the business for future growth. We have been investing for growth during the first half of 2023, enhancing our R&D pipeline and strengthening our manufacturing capabilities through targeted capex. Our new high-speed injectable filling line in New Jersey has started production and will ramp up gradually through the remainder of the year, with a second new high-speed line in Portugal following later this year. In July, through acquisitions relating to the Akorn bankruptcy process, we enhanced our manufacturing capabilities and portfolio of products for both Injectables and Generics.
We are committed to the highest ethical standards and are a signatory of the United Nations Global Compact. Our customers also rely on our products to be of the highest quality, and this is built into our mindset and is a key reason behind our success.