Hikma Pharmaceuticals PLC on Wednesday said it planned to increased spending on research and development to support further growth after reporting strong annual results.
The London-based pharmaceutical maker with operations in Jordan said pretax profit jumped 62% to $455 million in 2024 from $281 million i 2023, mainly reflecting an impairment reversal in its Generics business.
Core operating profit climbed a more modest 1.7% to $719 million in 2024 from $707 million, in line with consensus, at a margin of 22.8% which fell from 24.6% in 2023.
Injectables core operating profit rose 5% in 2024 with margin of 35.3%, down from 36.9%. Branded core operating profit rose 11% with margin of 24.6%, up from 23.8%. Generics core operating profit fell 11% with margin of 16.4%, down from 20.5%.
Revenue increased 8.7% to $3.13 billion in 2024 from $2.88 billion a year prior, while core revenue rose 10% to $3.16 billion from $2.88 billion, 3% ahead of consensus.
Core revenue was up in all three business segments - Injectables up 10%, Branded up 8% and Generics up 11%, with growth in all regions, led by North America.
Chief Executive Riad Mishlawi said: ‘It’s been another strong year for Hikma with double-digit revenue growth, increased profits and a resilient margin. We continued to invest in the business to support our future progress, with a strategic acquisition alongside new partnerships and agreements. This momentum combined with our diversified portfolio, leading market positions and increasing investment in R&D, underpin our positive outlook for 2025 and confidence in the future.’
Despite the strong looking results, shares were down 5.5% to 2,170.00 pence each in London on Wednesday morning.
Analysts at Panmure Liberum said: ‘The shares have had a strong run up more than 15% year-to-date so we expect today’s in line statement will probably trigger a pause for breath.’
Looking ahead, Hikma projects revenue growth of 4% to 6% in 2025 and core operating profit in the range of $730 million to $770 million, in line with the $751 million consensus at the mid-point, after an increase in investment in research and development spending of around 20% in 2025.
The increased spend across the group’s three segments will support the development of its global pipeline, underpinning medium to long term growth, Hikma said.
In 2024, core research and development R&D expenses were $141 million, lower than $149 million in 2023, representing 4.5% of core revenue.
Hikma expects Injectables revenue to grow 7% to 9% and for core operating margin to be in the mid-30s. It expects Branded revenue to grow 6% to 7% in constant currency with a core operating margin to be close to 25%. Generics revenue is seen broadly flat, with a core operating margin of 16%.
Hikma expects capital expenditure to be between $170 million and $190 million.
The firm recommended a final dividend of 48 US cents per share, up 2.1% from 47 cents a year ago, taking the final payout to 80 cents, up 11% from 72 cents.
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