Barclays upgrades Hikma after US court ruling

(Sharecast News) - Barclays upgraded Hikma Pharmaceuticals to 'overweight' and increased its price target on the company's shares after a US court ruled in favour of the generic drugmaker's treatment for heart conditions.
On Thursday the US court of appeals for the federal circuit upheld a district court ruling against Amarin's objections to Hikman's generic version of its Vascepa drug. The court ruled Hikma's version did not infringe any of Amarin's six main patents for the fish-oil based treatment.

Barclays analysts said they had been wary about reacting to Hikma's "impressive" first-half results because of uncertainty over the court case and the Federal Drugs Administration's view of Hikma's generic version of Advair.

Barclays said the ruling gave it a high degree of confidence and allowed it to add Vascapa to its model earlier than expected. The bank upgraded its rating on Hikma shares from 'equal weight' and increased its price target to £28 from £23.50.

"We expect this product to be significantly accretive to both 2020 and 2021 and see the potential for the product to have a longer tail given the relatively few number of gx [generic] filers," Barclays analysts said. "Given this higher degree of confidence in the earnings upside for Hikma combined with a reasonable current valuation we upgrade to overweight and increase our price target."

Hikma shares rose 2.7% to £24.77 at 12:17 BST.