FTSE 100 pharma firm Hikma has cut its full-year sales guidance for its US generics business to roughly $600m, against earlier analyst forecasts of $655m.
Shares in the company have dipped in London, falling by some four per cent so far today.
Hikma now expect generics revenue to be around $600m for the full year, though said there is still good demand across a number of products and new product launches has offset increased competition.
Group revenue for the full year is expected to grow by approximately 35 per cent to around $2bn (£1.6bn) in constant currency, though it added branded results are expected to take a hit from currency headwinds.
This is down from a previous estimates of $2bn to $2.1bn.
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The group remains on track to deliver global injectables revenue growth in mid to high-single digits in 2016 and has lifted its core operating margin guidance to be around 39 per cent, up from our previous guidance of around 38 per cent.
It reiterated its full year core operating profit forecast of between $30m and $40m.
For next year its enlarged generics business is expected to deliver revenue of around $800m and it estimates new launches will contribute around 15 per cent of generics revenue in 2017.
Why it's interesting
The revised full year numbers come alongside a warning of "challenging” trading conditions and the sharp devaluation of the Egyptian pound.
Egypt, one of Hikma’s “key” markets, took a surprise move to devalue its currency by a third last week.
The pharma sector is struggling with a mass generics event. Many majors are rushing to bring new products to market to offset a steep decline as their block buster drugs go post-patent and cheaper generics flood the market.
What the company said
Said Darwazah, Chairman and Chief Executive Officer of Hikma said:
Across the group, we are improving the quality of sales and focusing on profitability. Our global injectables business is delivering good growth and extremely strong margins. In the Middle East and North Africa, our focus on strategic products and greater operating efficiencies is helping to absorb strong currency headwinds.
In Generics, the integration of the West-Ward Columbus acquisition is progressing well and we are rapidly implementing cost savings. Although revenue from West-Ward Columbus is ramping up more slowly than originally anticipated, we remain highly confident in the future prospects of the business.
More broadly, by continuing to leverage our operations in the Middle East and North Africa region, expanding our portfolio of global injectables products and integrating the West-Ward Columbus business into our US operations, we are increasingly well positioned to capture a range of attractive future growth opportunities.
The big question in the pharma sector right now is Donald Trump's US election win. No mention of this from Hikma but the slight revision to its full-year numbers is unlikely to worry too many investors.
Shares are still higher than where they were before news of Trump's win broke.