UPDATE 1-Drugmaker Hikma estimates 23 percent full-year revenue growth

Fri Feb 14, 2014 4:32am EST

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Feb 14 (Reuters) - Jordan's Hikma Pharmaceuticals Plc said it expects a 23 percent growth in full-year revenue, up from its prior forecast of about 20 percent, benefiting from a strong performance in its injectables and generics businesses towards the end of 2013.

The London-listed company, which has grown over the past year on the back of a shortage of doxycycline in the United States, also raised its full-year generics revenue forecast to $270 million, as sales of the antibiotic continued to rise.

Shares in Hikma rose as much as 6.7 percent in early trade, making the stock the biggest percentage gainer on the FTSE-250 Midcap index.

The drugmaker has already raised its 2013 revenue forecast three times and said in November that it expected revenue from its generics unit to be about $260 million.

The U.S. Food and Drug Administration had said that there was a scarcity of doxycycline in the United States due to domestic manufacturing issues, adding that an acute shortage of substitutes was driving demand for the antibiotic. ()

Doxycyline is used to treat bacterial infections such as urinary tract infections, acne, gonorrhea, and chlamydia as well as the tick-borne illness Lyme disease. The drug is also used to prevent malaria.

The antibiotic was taken off the shortage list last October with no supply issues anticipated, according to the U.S. FDA website. ()

Hikma said that it expects revenue from its generics business to be lower in 2014 due to increased competition in the U.S. doxycycline market.

"A key issue is how long the doxycycline opportunity will last and how Hikma intends to guide the market in 2014, but we expect strong underlying growth," Jefferies analyst James Vane-Tempest wrote in a note.

He added that an increase in pricing pressure in doxycycline would erode the company's current supernormal profitability.

The company, which was founded in Amman in 1978, said its global injectables business performed well, with revenue growth of about 14 percent.

"We are confident that our injectables business will continue to deliver strong revenue growth and an adjusted operating margin above 30 percent in 2014," the company said in a statement.

Hikma's pretax profit nearly doubled to $111.6 million in the first-half. Revenue increased 20 percent to $638.3 million, boosted by a 137 percent revenue growth in the generics business.

The company said earlier this week that Chief Executive Said Darwazah would also be appointed chairman, succeeding his father Samih Darwazah.

Hikma shares were trading up 6 percent at 1320 at 0921 GMT on Friday on the London Stock Exchange. The stock has nearly doubled in value over the past year.

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