April 23 (Reuters) - Hikma Pharmaceuticals reiterated its 2026 guidance on Thursday, adding that while it has faced some pressure on shipping, energy, and insurance costs due to the Middle East war,
UK's Hikma Pharma backs outlook on faith in demand, managing Iran war costs
Hikma Pharmaceuticals Maintains Outlook Amid Middle East Tensions
April 23 (Reuters) - Britain's Hikma Pharmaceuticals kept its 2026 outlook unchanged on Thursday and said it was confident it could absorb higher shipping, energy and insurance costs stemming from the Iran war, supported by steady demand, sending its shares up nearly 6%.
Investor Sentiment and Executive Leadership
The update, which Peel Hunt analysts called "one step in the right direction," offered relief to investors concerned about Hikma's recovery and marked a boost for Chief Executive Said Darwazah. Darwazah stepped back from his role as executive chairman in February to focus on addressing challenges that have weighed on the drugmaker's share price.
Cost Pressures and Demand in the Middle East
Hikma said on Thursday that it had seen some pressure on costs from the war without specifying how much. It said that demand in the key Middle East market was "robust," and that it continues to maintain sufficient inventory to mitigate potential supply chain disruptions.
Government Requests and Supply Preparedness
The company has been asked by governments in the Middle East to stockpile certain products, some of them for up to six months, said Mazen Darwazah, executive vice chairman and deputy CEO for Hikma's MENA business.
"We are well positioned to supply the needs once they arise, and they are arising on a daily basis," he said on an investor call, without giving further details.
Share Performance and Market Overview
Hikma shares were up 5% at 1146 GMT, but are still down by more than a quarter for the last 12 months.
Company Background and Market Presence
Founded in Jordan in 1978, the British-headquartered drugmaker sells its own-branded generics and licensed products in the Middle East and North Africa, which account for about a third of its core revenue and form its second-biggest market after North America.
Regional Operations
Its operations span over a dozen countries in the Middle East and North Africa, including Saudi Arabia, its largest there, Iraq, Lebanon, Jordan, Morocco, and the UAE.
Financial Outlook and Strategic Adjustments
Hikma continues to expect group revenue growth of 2% to 4% for 2026 and operating profit of $720 million to $770 million.
Challenges and Restructuring
Persistent weakness in the company's injectables unit and delays at a key U.S. manufacturing site in Ohio had forced the drugmaker to scrap its medium‑term targets in February.
Refocusing on Core Operations
Hikma is also closing down its small U.S. bulk manufacturing business catering to hospitals and clinics to focus on core operations, it said on Thursday.
(Reporting by Neeshita Beura and Pushkala Aripaka in Bengaluru; Editing by Rashmi Aich and Louise Heavens)
