London-based Hikma Pharmaceuticals has said it expects a huge rise in annual core operating profit for the year, after being called in to supply emergency drugs for Covid patients during the pandemic.
The FTSE 100–listed company, which supplies generic drugs including anaesthetics, pain medications and sedatives, said core operating profit jumped 11 per cent to $566m for the 12 months to December last year, up from $508m in 2019.
Hikma said the profit hike was down to strong growth in its generics and injectables businesses.
Shares fell 4.1 per cent to 2,317p despite the news.
Statutory group revenue surged six per cent to $2.3bn for the year, with significant growth across all its businesses.
Revenue at its injectables business jumped 10 per cent, which Hikma said reflected “good demand in certain products used in the treatment of Covid-19”.
The family-led business, founded in Jordan just over four decades ago, is one of the main producers of dexamethasone — used to treat patients hospitalised with Covid-19.
The group was called in to provide emergency drug supplies to countries around the world following a surge in demand during the pandemic. In March and April last year Hikma supplied 11 of the 13 drugs used on ventilated patients in the US.
Hikma said it leveraged its “strong foundation to meet increased demand for essential medicines used in the treatment of Covid-19,” whilst continuing to maintain supply across its broader portfolio.
The group proposed a 14 per cent dividend hike to $0.50 for the year.
“Thanks to our strong foundation, flexible and high-quality manufacturing capabilities, robust supply chain and the unwavering dedication of our people to our purpose, Hikma was able to play a critical role in the pandemic,” Sid chief executive Siggi Olafsson.
“We responded rapidly to the changing needs of healthcare providers, supplying essential medicines used to treat Covid-19 patients, while continuing to provide the critical medicines our patients need every day,” he said.
Olafsson added that Hikma’s 2020 balance sheet leaves it “well positioned for future growth and we look forward to continued success in 2021”.
Hikma has continued to plough money into research and development (R&D) for its medicine pipeline over the past few years. The group said it launched 154 new products across its markets last year, and would invest six per cent of total revenue into further R&D.