London, 15 May 2014 – Hikma Pharmaceuticals PLC (LSE: HIK) (NASDAQ Dubai: HIK) (OTC: HKMPY), the fast growing multinational pharmaceutical group, will hold its Annual General Meeting today where the following statement will be made regarding its current trading and financial position. This constitutes its Interim Management Statement relating to the period from 1 January 2014 to date, as required by the UK Listing Authority’s Disclosure and Transparency Rules.
Hikma has made a strong start to the year and we are pleased to be reiterating our guidance for 2014 of around 5% Group revenue growth, following an exceptionally strong year in 2013. We are also very pleased that, through our ongoing commitment to the highest standards of quality manufacturing, we successfully returned our Eatontown facility to regulatory compliance earlier this year.
In the year to date, our Branded business has been performing in line with last year. We have been delivering strong growth in two of our largest markets, Saudi Arabia and Egypt, driven by new product launches. In other markets, such as Algeria and Sudan, we have seen a slower start to the year. We expect sales to accelerate across the region, driven by new product launches and our focus on improving the product mix. On a constant currency basis, we continue to expect revenue growth of around 10% in 2014 and adjusted operating margin in line with 2013.
Our global Injectables business has continued to perform very well in the year to date, particularly in the US, where we continue to leverage our product portfolio to drive growth. The breadth of our portfolio is enabling us to gain market share in certain products and this is more than offsetting an increase in competition in other products. We expect this strong performance to continue and we reiterate our guidance of above 20% revenue growth for the global Injectables business for the full year. Given our strategic focus on higher value products, we are upgrading expectations for the adjusted operating margin to around 35%.
The Generics business has also made a good start to the year. In April, we received a close-out letter from the US Food and Drug Administration (“US FDA”) that lifted the warning letter in respect of our Eatontown facility in New Jersey. This reflects the investment we have made to complete the remediation work, upgrade our manufacturing processes and strengthen our operations.
Revenue in the year to date has remained strong and we are benefitting from the re-introduction of products to the market. We continue to expect the Generics business to deliver revenue of around $170 million in 2014, with an adjusted operating margin of above 25%.
Our financing position remains very strong and will allow us to make further strategic acquisitions and investments, as these opportunities arise.
Said Darwazah, Chief Executive Officer of Hikma said:
“I am pleased that the Group has made a strong start to the year. Our efforts to build a broad portfolio of injectable products and continued focus on operational excellence are delivering results. We are delivering strong revenue growth and upgrading our guidance for the adjusted operating margin guidance for the Injectables business this year.
Our diversified business in the MENA region has enabled us to maintain sales in the year to-date and the outlook for the business remains strong. Following our significant remediation efforts, we are very pleased to have successfully resolved the issues with our Eatontown facility. Our focus is now on rebuilding the portfolio and pipeline for this business. Overall, we are pleased with our performance in the year to date and are confident in the outlook for the full year.”
We will announce our interim results for the six months to 30 June 2014 on 20 August 2014.