Hikma upgrades guidance after injectables and generics impress

Hikma Pharmaceuticals, the Jordanian drugs group, has made a good start to its new financial year, bettering tough comparatives from the year before thanks to strength in injectables and generics.The FTSE 250 company, which is thought to be a takeover target for Sweden's Meda Pharmaceuticals, reiterated its guidance for 2014 of around 5% group revenue growth.In the first four and a half months of the year, the branded drugs business is in line with last year, as strong growth in Saudi Arabia and Egypt is undermined by a slower start in Algeria and Sudan. This arm is expected to deliver revenue growth of around 10% in 2014 with flat adjusted operating margins, as branded sales accelerate across the region thanks to new product launches and improvements to the product mix. The more global Injectables business continued to perform well in the year to date, particularly in the US, where the portfolio's breadth is enabling Hikma to gain market share in certain products to counteract increased competition in other products. Management expects this strong performance to continue and has reiterated guidance of more than 20% revenue growth for the full year and has upgraded expectations for the adjusted operating margin to around 35%. Thanks to the re-introduction of products to the market and strong revenue growth, guidance for the Generics business was also upgraded, with adjusted operating margin now expected above 25% as the company continues to expect the Generics business to deliver revenue of around $170m in the full year.Chief Executive Said Darwazah said the focus was on rebuilding the portfolio and pipeline for the generics business after its warning letter from the US regualtor was lifted.Speaking more generally, he said: "Our efforts to build a broad portfolio of injectable products and continued focus on operational excellence are delivering results."He added that the company's financing position remained very strong and will allow Hikma to make further strategic acquisitions and investments as they arise. "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."Shares in Hikma were up 0.6% to 1,633p at 10:40 on Thursday.OH