Hikma Pharmaceuticals PLC (LSE:HIK, OTC:HKMPF) was the biggest faller on the FTSE 100 on Thursday morning after the drugmaker's interim results showed a 7% fall in core operating profit.
However, the decline in profits was not as bad as analysts expected and reflected product mix and foreign exchange impacts.
The interim dividend was also hiked 12% to $0.36 per share and guidance for the full year was unchanged, taking into account any impact from US tariffs at the date of the release.
Revenue for the first six months of 2025 rose 6% to $1.66 billion, with growth across all divisions, led by Injectables, where the top line was up 12%, bolstered by new product launches. Branded revenue increased 4%, while generics business Hikma Rx slipped 1%, in line with expectations.
Core operating profit declined to $373 million from $402 million amidst an evolving product mix. Core profit margins in Injectables stood at 30.0%, while Branded improved to 30.4%, while Rx operating profits fell 12% verus a strong period last year.
The company maintained its guidance for 2025, expecting 4-6% revenue growth and core operating profit between $730 million and $770 million.
R&D investment rose 20% over the period, as Hikma advanced its pipeline and launched a number of new products, including FDA-approved formulations for vancomycin and ustekinumab in the US.
Hikma also reiterated its commitment to US domestic manufacturing, noting a $1 billion investment by 2030 to expand capacity amid shifting trade policy dynamics.
Shares fell 7% to 1,752p in early trading on Thursday.
Broker Peel Hunt noted that Injectables profit was 3.9% ahead of consensus expectations, Branded was 1.7% ahead and Rx was bang in line.
Profit guidance is in line with market expectations, the broker added, with consensus core operating profit now US$756 million, while consensus expects circa 6% revenue growth, which is at the upper end of revenue guidance.
Lowered Injectables margin guidance might be seized upon by bearish investors, said analysts at Panmure Liberum, "but this looks to be down to currency and mix rather than anything else and is being offset elsewhere."