Shares in Hikma Pharmaceuticals PLC fell early Thursday, after the drugmaker downgraded guidance for its Generics business due to the delayed launch of a generic of the Xyrem treatment for narcolepsy.

Hikma shares were down 9.9% at 1,670.00 pence in London, the worst performer in the FTSE 100 index.

In 2017, London-based Hikma entered into a settlement agreement with Nasdaq-listed Jazz Pharmaceuticals PLC to sell an authorised generic of Xyrem.

Under the terms of the agreement, Hikma had a date certain launch of January 1, 2023, or earlier depending on market conditions and also had 180 days exclusivity.

However, Jazz Pharmaceuticals said it now expects authorised generic entry of Xyrem to occur ‘in late 2022, or possibly even January 2023’.

As a result, Hikma now does not expect revenue and profit contribution from its agreement with Jazz to sell the generic until the first half of 2023.

For 2022, Hikma now expects Generics revenue to be in the range of $710 million to $750 million and core operating margin to be around 20%, with the lower end of the range reflecting the possibility of further price erosion in the US generic market.

This is down from previous guidance of Generics revenue growth in the range of 8% to 10% over 2021 revenue of $820 million and core operating margin in the range of 24% to 25%.

All other financial guidance is unchanged, Hikma said.

Hikma had confirmed that 8% to 10% revenue growth guidance for Generics only last week, though saying this would likely be weighted towards the second half of the year.

On Friday, Hikma had said that both its Injectables and Branded businesses had performed well at the start of the year but that the Generics business had experienced some headwinds.

Hikma explained at the time that its Generics business has been hurt by increased competition and a challenging pricing environment, resulting in a ‘slow’ start to the year.

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