Hikma Pharmaceuticals (HKMPY) stock slumped Thursday after the drugmaker delivered a disappointing set of half-year numbers, lowered its full-year guidance and failed to address market concerns over when it will be able to secure regulatory approval for a key generic product it is developing.
The London-headquartered company reported first half sales of $895 million, up by an anemic 1% and some distance below the analyst consensus for a top line of $933 million. This was the result of weaker-than-expected sales in its injectables, U.S. generics and branded products divisions.
At the bottom line the company beat forecasts for operating profit and adjusted operating profit but this was overshadowed by the company having cut guidance for full year sales by around 5%.
Hikma stock fell by close to 10%, taking their three-month loss to nearly 30%, to change hands at an intraday low of 1,198.0 pence. This came in contrast to the largely-positive performance of the European drugs sector overall.
The company had been banking on regulatory approval for the hotly anticipated Advair Diskus generic product in May, after having talked substantial sales growth into its share price over the course of the last 12 months. But Hikma received a complete response letter from the Food & Drug Administration instead of the expected approval.
Hikma said Thursday that there are no material concerns over the substitutability of the proposed device and that it is attempting to address the remaining concerns put forward by the FDA.
"We were hoping that since the CRL in May the company may have been in a position to update the market in more detail today," said James Vane-Tempest, an analyst at Jefferies.
Advair is a blockbuster asthma treatment pioneered by GlaxoSmithKline (GSK) although it lost the patent in 2010 and has since been bracing for a flood of generics to hit the market.
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