Interactive Investor/Cantor17 Aug 2017 14:41
Down 50% since March but still a 'buy'
It's now been two years since Hikma Pharmaceuticals (HIK) sealed an eye-catching $2.65 billion (£2 billion) acquisition that transformed its position in the US generics market.
The purchase of Ohio-based Roxane Laboratories, which was founded in 1885, represented a "scarce asset" which would be difficult for Hikma to replicate on the same scale and to the same level of quality.
*The Roxane deal added 88 products in specialised and niche segments of the market, including oncology, respiratory, extended release and controlled substances. The deal also enhanced Hikma's pipeline by adding 89 R&D projects.
Despite the difficulties, White continues to have faith in the company and has retained his buy rating alongside a target price of 2,200p. He added: "The Roxane business is one which should perform better than traditional oral generics businesses given its focus on complex formulations."
Hikma's operations are based around its three business units of injectables, generics and branded, primarily in the Middle East and North Africa region, where it is a market leader, the US and Europe.
Sales guidance for branded was also reduced on a reported basis with revenues and profits expected to be the same as 2016, compared to a previous modest single digit growth expectation.
Earnings per share in today's half-year results rose 12% to 28.8p, while the company maintained its interim dividend at 11p a share.
http://www.iii.co.uk/articles/437686/down-50-march-still-buy
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