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Hikma Pharmaceuticals cuts full year revenue forecast on delays of Advair drug approval

Thursday, May 18, 2017 23:57
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Hikma Pharmaceuticals plc (LON:HIK) has cut its full year revenue guidance as it expects further delays to the approval of its generic version of GlaxoSmithKline plc’s (LON:GSK) asthma drug, Advair.

The company, which plans to manufacturer the drug using Vectura’s inhaler and a drug formulation, confirmed in a trading update it does not expect to launch the medication this year.

Hikma and Vectura have received a complete response letter (CRL) from the US Food and Drug Administration categorising the drug as ‘major’, which means the application will require significant amendments.

“This assumes we do not launch our generic version of Advair Diskus in 2017 and reflects the intensifying competitive environment in the US,” Hikma said in a statement.

“Through our focus on portfolio optimisation and continued cost savings, we expect to achieve a slight improvement in the profitability of the generics business in 2017 after incurring additional operational costs related to our generic version of Advair Diskus.”

As a result, Hikma has slashed its forecast for generic drugs revenue for fiscal year 2017 to US$670mln from the US$800mln it estimated in March.

The revision to its guidance for the generic drugs business means the company now expects total revenue to be in the range of US$2.0bn to US$2.1bn, compared to a previous forecast of US$2.2bn.

Hikma maintained its full year expectations for the injectables business for revenue of between US$800mln and US$825mln.

New product launches, including former injectables under its US business Bedford Laboratories, offset rising competition on certain products.

In the branded business, the company continues to expects underlying revenue growth in the “mid-single digits” in constant currency in 2017, boosted by a pipeline of new product launches in key markets.

On a reported basis,  however, Hikma reiterated that it predicts branded revenue will rise in the “low-single digits” and core operating margin to be broadly in line with 2016, due to the impact of a 51% devaluation of the Egyptian pound against the US dollar.

The FTSE 250 listed pharmaceutical company was founded in Jordan in 1978 before expanding into Egypt, the US and Europe.


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