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UPDATE 1-Hikma raises full-year revenue forecast again
July 8, 2013 / 10:32 AM / 4 years ago

UPDATE 1-Hikma raises full-year revenue forecast again

* Expects full-year total revenue to rise 17 percent

* Sees full-year generics business revenue of $200 mln

* Shares up as much as 9 pct (Adds analysts’ comments, details; updates share movement)

July 8 (Reuters) - Hikma Pharmaceuticals Plc raised its full-year revenue forecast for the second time in as many months on strong sales of its generic antibiotic doxycycline, sending its shares up as much as 9 percent.

The drugmaker on Monday said it expected total revenue to rise 17 percent in 2013, up from its previous forecast of 13 percent.

Hikma said its generics business continued to benefit from the strong sales of doxycycline. It expected full-year revenue of about $200 million and operating margins of more than 30 percent in the generics division.

“Demand remains strong and as visibility only runs 2-3 months ahead, there is the potential for further upgrades later in the year,” Citigroup analyst Joanne Jerman wrote in a note.

Strong doxycycline sales had prompted Hikma to raise its full-year revenue growth forecast to 13 percent in May, up from 10 percent. Hikma had said that it expected full-year revenue of $150 million with operating margin in the low teens in its generic business.

Panmure Gordon analyst Savvas Neophytou said Hikma’s competitors are having difficulty manufacturing doxycycline.

“Hikma has a lot of raw materials and has been able to supply the market as much as it needs and that is why it is making a lot of profit out of it,” he said.

Doxycycline is a type of antibiotic used to treat bacterial infections in different parts of the body.

The company reported revenue of $1.11 billion in the year ended Dec. 31, 2012, with its generic business contributing $103.7 million.

The drugmaker said it continued the remediation process of its plant in Eatontown, New Jersey, and was slowly reintroducing products to the market.

Hikma had reported a 33 percent drop in revenue in its generics business in 2012, after it had stopped production at the plant in November to ensure compliance with U.S. FDA guidelines.

Shares in the company were up 8.6 percent at 1080 pence at 1024 GMT on Monday on the London Stock Exchange. (Reporting by Abhirup Roy in Bangalore; Editing by Supriya Kurane)

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