Generic drugmaker Hikma Pharmaceuticals (HIK) is expected to return to growth in 2016 following an 8.3% drop in pre-tax profit to $355 million in 2015 on selling fewer gout treatments than expected.
Wealth manager Charles Stanley forecasts pre-tax profit to nudge ahead to $361 million in 2016 and then accelerate the following year to $500 million.
Hikma develops and sells branded and non-branded generic treatments. It also sells other companies’ products in the Middle East and North Africa under license. To drive growth, management is focused on developing new generic drugs and making further acquisitions.
The FTSE 250 constituent closed its largest deal to date in July 2015, paying $2.6 billion for US generic drugmaker Roxane.
Hikma had 220 products approved for sale in 2015. In the pipeline is a generic version of GlaxoSmithKline’s (GSK) asthma drug Advair, where Hikma is currently awaiting a decision from regulator the Food & Drug Administration (FDA) to sell the drug in the US.
[buy_or_sell]
Although the shares have recovered from last year’s decline, we still believe they look attractive given the predicted profit growth revival. Buy at £22.96.
