Jordanian drug company Hikma Pharmaceuticals (HIK) improves 3.8% to £12.91 as it raises its guidance for the fourth time in nine months.
Its revenues in 2013 are set to beat its previous forecasts by a fifth when its full-year results are announced (12 March), coming in at 23% ahead of its sales in 2012.
This is fuelled by a strong performance of its generics and injectables businesses towards the end of 2013. The operating margin achieved by its injectables business is set to be around 30%, reflecting strong demand for its higher value products in the US.
These figures justify management’s decision to rebuff the offers received for its injectables business in March 2013, despite a potential sale that could have netted Hikma as much as $2.2 billion, according to analysts.
The FTSE 250 constituent expects adjusted operating margin of around 24% in its branded business, a rise of more than 50 basis points year-on-year. This is the result of cutting low margin tender sales to focus on higher value products.
But there is one note of caution in its trading update. Revenues in the generics division are set to reach $270 million for 2013, but those collected this year are set to fall due to US competition for is doxycycline antibiotic.
Hikma also announced that non-executive chairman Samih Darwazah is retiring and will become honorary life president of the company he founded in 1978. He will be replaced by chief executive officer Said Darwazah, who takes on both roles.