Hikma Pharma’s gloomy outlook kicks shares to more than three-year low

By Sri Hari N S and Bhanvi Satija

Feb 26 (Reuters) – British generic drugmaker Hikma Pharmaceuticals scrapped its medium-term targets as it forecast slower annual revenue growth and profit on Thursday, sending its shares tumbling to their lowest levels since late 2022.

The company’s forecast for 2026 came in below expectations because of challenges in its injectables business, which CEO Said Darwazah said Hikma was working through and would look to ramp up research and development investment.

Darwazah told Reuters that the weaker guidance reflected a “realistic picture” of the challenges ahead. 

“The pill that people are struggling to swallow today is … of a slower growth prospect,” said Miles Dixon, healthcare analyst at Peel Hunt.

Hikma has been hurt by an industry-wide squeeze on generic medicines margins. Its shares have given up more than a fifth of their value over the last year as the drugmaker grappled with manufacturing delays at its new U.S. factory in Bedford, Ohio. 

Hikma said it expects Bedford to start full commercial production in 2028.

Its shares were trading almost 16% down by 1333 GMT.

PLANS TO INVEST MORE IN R&D

Hikma said Darwazah would step down as executive chair to focus on a strategic turnaround. He took up the dual role in December.

The company expects revenue from its injectables business to grow in the low single digits, compared with analysts’ expectations of high-single-digit growth.

Its core profit fell 6% in the year ended December 31, 2025. Overall margins contracted to 31% for 2025 from 35.3% in 2024, and are expected to shrink further this year, to between 27% and 28%. 

Hikma forecast core operating profit of between $720 million and $770 million for 2026, below a company-compiled consensus estimate of $784 million. Revenue growth this year is expected to be between 2% and 4%, down from 7% in 2025. 

Management said that 2026 would be a year of reset and investments in research and development efforts, and that growth would re-accelerate in 2027. They remained confident Hikma would achieve its $5 billion sales target by 2030.  

“One of the main reasons that we’re making all these changes is that we are very committed to investing in R&D, to investing in equipment, and investing in talent,” said Darwazah.

(Reporting by Sri Hari N S in Bengaluru and Bhanvi Satija in London; Editing by Mrigank Dhaniwala, Clarence Fernandez and Emelia Sithole-Matarise)