(Adds analysts comment, background, updates share movement)
May 19 Hikma Pharmaceuticals Plc lowered
its full-year revenue forecast on Friday to reflect a delay in
the launch of its generic asthma drug amid pricing pressures in
the United States, sending its shares down to a three-year low.
Earlier this month, the drugmaker said U.S. regulators
decided not to approve its generic version of GlaxoSmithKline
Plc's blockbuster lung drug Advair, citing "major"
issues with the application.
Hikma shares fell as much 7.5 percent to 1,573 pence, their
lowest since May 2014. They were top percentage losers on the
FTSE 100 bluechip index and the pan-European Stoxx 600
The company, which makes and markets branded and non-branded
generic and injectable drugs, now expects full-year revenue to
be in the range of $2 billion-$2.1 billion at constant currency,
down from its earlier forecast of $2.2 billion.
Hikma lowered its 2017 revenue forecast for its generics
business to $670 million, down from its earlier forecast of $800
"This assumes we do not launch our generic version of Advair
Diskus in 2017 and reflects the intensifying competitive
environment in the U.S.," the company said in a statement.
Hikma and its partner Vectura Group Plc are in a
race with Mylan to launch the first U.S. generic copy of
Advair. The U.S. FDA has already delayed approval of Mylan's
Hikma and Mylan received so-called complete response letters
from the FDA that were categorised as major. Dealing with a
major amendment to a generic drug application means a delay of
10 months for an FDA response, according to agency guidelines.
Consensus estimates have been cut materially since the FDA's
complete response letter was received on May 10, but analysts
expect these will need to be slashed even further given the
increased pressure on the U.S. generics business.
Express Scripts Holding Co on Thursday said its
Econdisc group purchasing organisation (GPO), which purchases
generics for Kroger and SuperValu, will participate in the
Walgreens Boots Alliance Development GPO.
Morgan Stanley analysts say Express Script's latest move is
a sign of the intensifying competition and the consolidating
customer base in the U.S. generics space.
"We believe (this) is a significant development in the
generic drug supply chain; in our view, this could propagate
further pricing headwinds and drive sentiment lower," Jefferies
analysts said in a note.
Hikma maintained full-year revenue estimate for its
injectables unit at a range of $800 million-$825 million, with
core operating margin seen in the high 30s.
(Reporting by Sanjeeban Sarkar and Tenzin Pema in Bengaluru;
Editing by Sunil Nair and Gopakumar Warrier)