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Letter from the Chairman

Entering a new phase of growth

"We remain very ambitious for Hikma and we are confident in our ability to drive continued growth in the years to come."

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We have come a long way

This year we celebrated ten years since Hikma listed on the London Stock Exchange. In 2005, Hikma was just emerging as a global pharmaceutical company, with revenue of $262 million and a market capitalisation of $1.2 billion by year end. With 2015 revenue of around $1.4 billion and a market capitalisation of close to $6 billion, we are now firmly established as a leading global pharmaceutical company with a successful and diverse business model.

We remain the leading pharmaceutical manufacturer in the MENA region. Our Branded business – a truly unique asset – has grown at a CAGR of 18% since 2005, through a combination of organic growth and strategic acquisitions that completed our footprint in the region and enabled us to consolidate in key markets. We currently employ close to 2,000 sales and marketing professionals in MENA, up from around 330 in 2005, who have extended the awareness and enhanced the perception of Hikma brands across the region.

In Europe, we have built strong injectable sales organisations in Germany, Portugal and Italy and have made significant investment in manufacturing capacity and new technologies. Today, our European manufacturing capabilities are truly impressive. Our high-quality manufacturing facilities in Europe produce 212 products across a range of dosage forms, including vials, ampoules, pre-filled syringes and bags, and we are continuing to invest in new technologies and capabilities. With equipment transferred from Ben Venue, we are expanding our lyophilisation capacity with nine new lyophilisers and have just broken ground on a new oncology centre.

Our business in the US has seen the greatest transformation. The acquisitions of Baxter Healthcare’s generic injectables business in 2011 and of Bedford Laboratories in 2014 have positioned Hikma as one of the largest suppliers of generic injectables in the US by volume. Through these acquisitions, our injectable product portfolio and pipeline have gained significant breadth and differentiation. Our agreement in 2015 to acquire Roxane, which closed in February 2016, transforms our non-injectables Generics business, adding more than 80 attractive products to our current portfolio and close to 90 differentiated products to our pipeline, and makes us the sixth largest generics company in the United States by value. We expect our US businesses to contribute revenue of around $1.2 billion in 2016, up from just $130 million in 2005. From this strong platform, we are very well positioned for the coming years. Our business model is sound and all three of our business segments are operating from a position of strength.

To conclude, I would like to pay tribute to my father, Samih Darwazah, who passed away in May 2015. He is, of course, sorely missed by the entire Hikma family, yet his legacy lives on in virtually everything we do at Hikma. Daily, we are fulfilling his commitment to making high-quality medicines accessible and affordable for patients across the globe. We are emulating his entrepreneurial spirit as we look for new technologies to invest in and new capabilities to develop. We are following in his footsteps as we look to enter new markets and take on new challenges. We are convinced of the need for continuing education and training as we strive to expand our knowledge and learn new skills. Most importantly, we are working together as a team to build on his success. We remain very ambitious for Hikma and we are confident in our ability to drive continued growth in the years to come.

 
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Said Darwazah

Chairman and Chief Executive

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