London, United Kingdom — Hikma Pharmaceuticals PLC (‘Hikma’ or ‘Group’), the multinational pharmaceutical company, today reports its interim results for the six months ended 30 June 2022.
During the first half of 2022, core group revenue was flat at $1.213 billion (compared to H1 2021: $1.216 billion) as the strong performance from our Injectables and Branded businesses offset the impact of weaker pricing in Generics. Core operating profit was down 4% to $296 million reflecting lower profit in Generics. Good cashflow from operating activities of $169 million was maintained, in addition to maintaining healthy inventory to ensure continuity of supply.
Said Darwazah, Executive Chairman and Chief Executive Officer of Hikma, said:
“Hikma’s resilient first half performance is a testament to the strength of our core underlying business, supported by the breadth and depth of our portfolio and capabilities. Double digit profit growth in our Injectables and Branded businesses has helped to offset a decline in Generics caused by industry-wide competitive pressures. 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. We expect to maintain good momentum in Branded and Injectables and for Generics to return to growth in 2023.”
Global Injectables revenue grew strongly, up 9%, driven by the US-base business, the Custopharm and Teligent acquisitions, and a good performance in Europe. Injectables core operating profit increased by 12%. In the MENA region, our Injectables revenues declined slightly on a reported basis primarily due to weaker sales in Lebanon and Iraq. This was mostly offset by successful new launches, as well as good performance of our biosimilar products as we continue to launch into new markets and grow our market share. We continue to expect Injectables revenue growth to be in the mid to high-single digits and core operating margin to be between 36% to 37%.
Branded achieved good growth in several key markets, with revenue up 6%. An improved product mix drove growth in core operating profit of 16% and core operating margin of 21.8%. Our Branded business continues to benefit from our established presence in the region, with our 23 manufacturing plants, 2,000-strong experienced salesforce and a broad portfolio of our own and in-licenced products. Strong revenue growth in the first half was driven by good performance across most of our markets as we benefit from an increasingly diversified portfolio of high-value treatments. Algeria, Morocco and Iraq performed particularly well in the first half. While we have been impacted by weaker currencies, particularly in Egypt, our momentum in our underlying business remains strong, enabling us to grow revenue in both reported and constant currency. We now expect Branded revenue to grow in the low single-digits on a reported basis. On a constant currency basis, we expect it to grow in the mid single digits and expect core operating profit to be more evenly split across the year.
Generics was impacted by the highly competitive environment in the US and slower than expected ramp up of recent launches, resulting in an 18% fall in revenue and core operating margin of 17.6%. Over the medium-term, we have a well-diversified pipeline of new products and we are focused on improving our product mix with an emphasis on more complex and specialty products that will improve the resilience of the business. We now expect Generics revenue to be in the range of $650 million to $675 million and core operating margin to be between 15% to 16%.
Our strategic progress positions the business for future growth. We successfully completed the acquisitions of Custopharm and Teligent’s Canadian assets and expanded our European footprint through entry into the French injectables market, while investing in local injectables manufacturing in MENA to support growing product portfolio. We also benefited from strong demand for our oncology products in Algeria, supported by our continued investment in local manufacturing; a strong contribution from chronic medications, which drove 80% of Branded revenue growth in the first half; and continued investment in commercial capabilities to support development of growing speciality portfolio and more resilient growth opportunities in Generics.