Hikma Pharmaceuticals PLC shares suffered on Thursday, as it lowered annual guidance after a poor performance in its Generics business hit half-year profit.

For the first half of 2022, the London-based pharmaceutical company said pretax profit dropped 33% to $215 million from $319 million a year before.

Hikma shares dropped 8.6% to 1,611.00 pence each in London on Thursday morning.

This came on revenue that stayed flat year-on-year at $1.21 billion, compared to $1.22 billion. It rose 1% in constant currency.

Global Injectables revenue grew 9% as Branded gained 6%, which offset a 18% decline in Generics revenue.

‘Generics was impacted by the highly competitive environment in the US and slower than expected ramp-up of recent launches,’ the firm explained.

The division suffered from low-double digit price erosion and mid-single digit volume erosion.

It brought in $330 million, compared to $400 million in the first half of 2021, as the launches of products such as icosapent and generic Advair Diskus suffered from intense competition.

Looking ahead, Hikma hopes its ‘well-diversified pipeline of new products’ with emphasis on complex and speciality products will improve Generics performance in the medium term.

For the short term, however, it has cut annual revenue guidance for Generics to a range of $650 million to $675 million, from a previous range of $710 million to $750 million.

‘We expect our Generics business to return to growth in 2023, driven by new launches including Ryaltris and generic Xyrem,’ Hikma said.

The Generics operating margin for 2022 is expected to be around 15% to 16%, down from around 20%. It achieved a core operating margin of 18% over the first half of 2022, compared to 25% the year prior.

It expects Injectables revenue growth in the mid to high-single digits, and Branded revenue to grow in the low-single digits on a reported basis. On a constant currency basis, Branded revenue is expected to grow in the mid-single digits.

Hikma proposed an interim dividend of 19 cents per share, edging up from the payout of 18 cents a year prior.

‘Our increasingly differentiated portfolio, market-leading positions, unique manufacturing footprint and the strength of our customer relationships form a strong foundation for further progress and we are confident in our outlook for the future,’ said Executive Chair & Chief Executive Officer Said Darwazah.

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