Hikma Pharmaceuticals Share News (HIK)

Hikma Pharmaceuticals has signed a joint venture agreement with MIDROC Pharmaceuticals to enter the Ethiopian medicine market. The joint venture, HikmaCure, will establish an Ethiopian operating company, build a local manufacturing facility and begin marketing and distributing pharmaceutical products in Ethiopia over the next five years."I am extremely pleased to be partnering with MIDROC to bring high quality, affordable medicines to the Ethiopian market," said Chief Executive Officer of Hikma, Said Darwazah."Expanding our presence into sub-Saharan Africa is a key strategic priority for Hikma and this is an excellent first step. We believe Ethiopia offers strong growth potential in the medium to long term and our investment at this stage will enable us to be well positioned in the market. We will continue to explore opportunities to build our presence in the sub-Saharan region."The Ethiopian pharmaceutical market is valued at over $500m and is growing at a compound annual rate of around 15%. It is expected to reach about $1bn in 2018, driven by increasing investment in healthcare infrastructure and improved purchasing power of patients. The market is currently highly dependent on imports, which account for around 75% of the total pharmaceutical market. Initially MIDROC will work with Hikma and HikmaCure to register, market and distribute Hikma's products in the Ethiopian market. Hikma and MIDROC will provide up to $22.3m each in cash, which will be used to build and fit-out a local manufacturing and distribution facility in Ethiopia and to provide working capital support for the joint venture. The facility is expected to begin commercial production in 2017.RD