Hikma delays new US factory, cuts profit forecasts

By Unnamalai L

Nov 6 (Reuters) - Hikma Pharmaceuticals cut its profit and revenue targets on Thursday after the British generics drugmaker delayed the launch of its new U.S. factory, dealing a blow to its injectables business and sending shares to a near three-year low.

The company HIK.L now expects medium-term core operating profit margins to grow in the range of 5% to 7%, down from its previous outlook of 7% to 9%, and compounded annual revenue growth to be at the lower end of the 6% to 8% range.

Medium-term profit margin for the injectables business, which accounted for 42% of revenue last year, is expected to be around 30%.

The company blamed the cuts in part on a postponement in the commercial start of its manufacturing facility in Bedford, Ohio, which executives said in a call with analysts was due to delays in the delivery of machinery.

It now expects Bedford to be fully operational towards the end of 2027, rather than the start of that year as previously expected.

Hikma in August narrowed its full-year operating margin forecast for the injectables unit.

'DISAPPOINTING' CUT TO MARGINS

"This is disappointing given that Hikma had only provided medium-term guidance for the first time earlier this year," analysts at Jefferies said in a note.

Shares of the company fell as much as 13.6% in early trading. They had pared some losses to be down about 11% at 1,577 pence by 0958 GMT.

Hikma, which counts North America as its largest market, expects improving profitability in its generics unit to partially offset slowing injectables operating profit growth.

The generic drugmaker also cut its 2025 core operating profit forecast to between $730 million and $750 million from a previous range of between $730 million and $770 million.

"Looking forward, we remain focused on significantly expanding our manufacturing capacity, which will enable us to meet growing demand across our global businesses," CEO Riad Mishlawi said in a statement.

Additionally, Hikma announced that the head of its injectables unit, Bill Larkins, has stepped down from his role, with Mishlawi taking the role on an interim basis.