Hikma Pharmaceuticals (HIK) Trading Update summary

Guidance and Outlook

• Revenue is expected to grow 6% to 8% in 2024, with core operating profit guidance reiterated at $700m–$730m, reaffirming upgraded guidance and confidence in meeting targets despite year-end uncertainties.

• Injectables revenue guidance of 6–8% growth is maintained, with momentum since August supporting delivery within the range and a core operating margin of 36% to 37%.

• No significant impact is expected from recent US election results or potential tariff changes due to strong US manufacturing presence.

• Next year's guidance will be provided in February, with Xellia integration expected to be earnings-neutral for 12 months.

Divisional Performance and Strategy

• All three business segments are contributing to growth, supported by new product launches and infrastructure investments.

• Injectables division continues strong growth, with 10 product launches year-to-date and more planned, though some delayed to 2025 due to regulatory factors.

• Branded business in the Middle East is stable and growing, with leading market position in Saudi Arabia and ongoing facility investments; strong demand across oncology, diabetes, and cardiovascular products.

• Generics performance in H2 was affected by timing of product releases and increased R&D investment; full-year trends are more indicative for future outlook.

Contract Manufacturing and Capacity

• Significant new long-term contract manufacturing agreement signed for Generics, expected to utilize idle capacity and provide predictable revenue; commercial production expected in 2027, pending FDA approval.

• Current contract manufacturing is about 10% of injectables, with plans to expand as new capacity comes online, especially after Xellia integration.

• In three years, contract manufacturing capacity is expected to double, with potential for significant business growth.