Healthy Q3; Injectables’ temporary constraints shouldn’t be a worry

Hikma’s all three segments continued their healthy performance in Q3. While the management upgraded its 2023 guidance for two segments, Injectables was held back by temporary capacity constraints, which led to this segment’s lower-than-expected performance in Q3 and a slight downward revision to the full-year outlook. Nonetheless, the Injectables’ situation is expected to normalise in 2024. Overall, the strong ongoing momentum, the promising long-term prospects for generics/biosimilars and a hea

Strong H1; Generics’ outlook upgraded ‘again’

The H1 23 results exceeded expectations, with a strong showing from all three divisions, which also helped the firm clock a better performance than its peers. Considering the healthy momentum, the management again upgraded the guidance for ‘Generics’. Overall, with the expanding product portfolio and increasing focus on the treatment of chronic diseases, Hikma stands to benefit from the promising long-term growth prospects of generics and biosimilars, which also backs our positive stance on the

Off to a strong start in 2023, guidance upgraded

The qualitative Q1 23 update was upbeat, wherein the full-year guidance for Generics was upgraded, as its healthy performance had exceeded the management’s expectations. The other segments also sustained strong momentum. Overall, despite the stock being up c.23% ytd, we reiterate our positive recommendation for Hikma, which is underpinned by promising mid-to-long term growth prospects for biosimilars and generics, and a healthy balance sheet.

Hardman & Co Monthly: April 2023

Feature article: 2022 Pharma Statistics - 8.7% growth – but worrying signs An efficient reporting system has seen all the listed multinational pharmaceutical companies announcing results for 2022, which has given us the opportunity to update our industry statistics and drug database. This report provides the first snapshot of the global and US rankings of the top 20 drug companies for 2022. 2022 was characterised by 8.7% underlying growth, offset by a large forex impact (-12%), due to USD stren

2022 beat + expected 2023 recovery

Hikma’s ‘core’ profitability exceeded expectations, driven by Injectables. However, the tough environment for Generics, and hyperinflation and adverse FX movements for Branded weighed on the overall performance. Nonetheless, all divisions are guided to aid 2023 improvements. Overall, the robust positioning in target markets and relatively lower leverage levels place Hikma in a good position to capitalise the optimistic outlook for biosimilars and generics, making it an attractive small pharma re

Arecor Therapeutics: Hikma licence milestone achieved

Arecor has provided an update on its partnered Specialty Hospital programmes with Hikma Pharmaceuticals. AT307 and AT282 are both novel enhanced formulations of existing, albeit undisclosed, marketed injectable products. The transfer of AT307 to Hikma for further development and, importantly, their commitment to seek approval under the FDA 505(b)(2) pathway triggers an undisclosed milestone payment. However, all rights to AT282 have been returned to Arecor following a portfolio review at Hikma;

Beneficiary of recent developments and the prevalent market dynamics

In recent months, Hikma has benefited from both macro events and company-specific developments. Yesterday, the firm launched Xyrem, whose postponement in 2022 had led to a guidance downgrade, and a collaboration with Celltrion for the commercialisation of a biosimilar for a key oncology drug. Also, the group could benefit from ongoing drug shortages in different parts of the world. Despite the c.36% share price gain since October 2022, the stock remains down c.27% on its early-2022 levels and th

Q3 dynamics similar to prior periods, full-year guidance maintained

Like the earlier quarters, momentum for Injectables and Branded continued making up for the tough times being faced by Generics. Thankfully, the full-year guidance for Generics was maintained, after two downgrades this year. Overall, while the stock is down c.40% (in ytd terms) – mainly due to concerns around its Generics business, our positive recommendation is supported by the long-term growth potential of the biosimilar and generics markets, Hikma’s strong position in the target markets, and

In-line H1; but sustained downturn in generics spooks investors

Hikma ended the H1 on a weak note, with decent growth in Injectables and Branded segments being largely offset by a decline in the Generics franchise. Also, the weaker H1 led to a second downward revision to the full-year 2022 outlook for Generics in the last three months. Nevertheless, these are only transient concerns and the firm’s attractiveness remains intact on the back of the robust long-term virtues of the generics market, and the group’s leading position in the target markets.

Slow start to the year

Hikma has had a slow start to 2022, largely due to escalating headwinds in the Generics segments. While the update for the Injectables and Branded segment was reassuring, the negative market reaction was largely due to uncertainties surrounding Generics, thereby further weighing on share price momentum. As a result, our segment-level estimates should be revised downwards. Also, some discount on the peer-based valuation is likely to be incorporated.

Hot Off The Wires - The Day Ahead

Today's news and views, plus announcements from HIK, RKT, TPK, AO., SHI, LINV, & AEXG.

Weak outlook scars strong finish to 2021

Hikma finished 2021 on a strong note, with encouraging sales growth across segments. However, the 2022 outlook has come in below our expectations, with various issues in all the major businesses and/or geographies. Nevertheless, as these are only transient concerns, the firm’s investment attractiveness remains intact. Although, some moderation of the forecast seems inevitable.

Hot Off The Wires - The Day Ahead

Today's news & views, plus announcements from HIK, RR, LLOY, GNS, RAT, SXS, BGO & BOOM.

Capital Access' Hot Off The Wires - The Day Ahead

Today's news & views, plus announcements from HIK, GSK, CAPC, XPD, TAVI, INL & PCA.

Shield Therapeutics - Termination of coverage

Edison Investment Research is terminating coverage on ABC Arbitrage (ABCA), paragon (PGN), Foresight Solar Fund (FSFL), Kendrion (KENDR), Lithium Power International (LPI), Triple Point Energy Transition (TENT), 4iG (4IG), e-therapeutics (ETX), Pharnext (ALPHA) and Shield Therapeutics (STX). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our web

Warpaint London+ (W7L, House Stock at 470p) - Outstanding FY23A - Upgrades!

Cambridge Nutritional Sciences - Operational efficiencies; adjusted EBITDA profi

Cambridge Nutritional Sciences (CNS) has provided a trading update for the 12 months to 31 March 2024, noting that a combination of strong sales growth and significant margin improvements, driven by operational efficiencies, have played key factors in the group’s expectation of being adjusted EBITDA positive in FY 2024. Revenues are expected to be £9.8m (30% YoY growth), ahead of our £9.0m forecast, with gross profits expected to exceed £6m, which is again ahead of our year-end forecast of £5.6m

Creo Medical Group - Speedboat savings validated

An official NHS Supply Chain case study has quantified the savings made by an NHS Trust from adopting Creo Medical’s Speedboat device to perform Speedboat Submucosal Dissection (SSD) in comparison to surgical alternatives. In total, the net cash saving from 130 SSD procedures for the NHS Trust was calculated at £687k, including savings from reduced length of hospital stay and reduced theatre costs. Notably, these savings did not include the patient and financial benefits associated with reduced

Morning Note – 24 April 2024

Warpaint London+ (W7L, House Stock at 375p) - Trading ahead of expectations - +10% upgrade implied

Hybridan Small Cap Feast - 22 April 2024

22nd April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi

Cambridge Nutritional Sciences - H1 2024 interims: Executing a newly focussed st

Cambridge Nutritional Sciences (CNS) has published its H1 2024 results to end September 2023. Group revenues grew 44% to £4.9m and gross profits increased by 63% to £3.1m, with the company benefitting from newfound operational efficiencies. With its now streamlined strategy focussing on the core Health & Nutrition business and the initial signs of an encouraging uptick in sales momentum, we believe the company is well positioned for growth that will help create future value for shareholders. We

The Hardman & Co Monthly: April 2024

Feature article: Steady as she goes, but could be better: A review of investment company liquidity since 2016 Liquidity is the lifeblood of equity markets. The measurement of liquid asset availability to a market or company is a way of gauging a market’s health. This article builds on our previous work, which analysed the liquidity data for non-financial trading companies, by applying the same analytical techniques to the investment companies (IC) space. We analyse liquidity for ICs as a whol

e-therapeutics - Termination of coverage

Edison Investment Research is terminating coverage on ABC Arbitrage (ABCA), paragon (PGN), Foresight Solar Fund (FSFL), Kendrion (KENDR), Lithium Power International (LPI), Triple Point Energy Transition (TENT), 4iG (4IG), e-therapeutics (ETX), Pharnext (ALPHA) and Shield Therapeutics (STX). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our web

Morning Note – 8 April 2024

Venture Life Group - Strong organic growth; focus on EBITDA

Venture Life has reported FY23 results to December 2023, following the February trading update. Revenues grew 17% in the year to £51.4m (our est. £50.7m) and adjusted EBITDA was £11.6m (our est. £11.6m). Cash conversion was 85%, generating £9.8m of cash from operations. Cash generation and no M&A in 2023 allowed the company to de-lever, closing FY23 with net debt to adjusted EBITDA at 1.3x. Management have focused on growth with three therapy areas generating double-digit revenue growth and onli

Hybridan Small Cap Feast - 17 April 24

17th April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi

Shield Therapeutics - FY 2023 TU; total revenues in line but Accrufer scrip revi

Total reported revenues and other income were $17.5m (our forecast $16m) in 2023 vs $5.5m in 2022. The composition of that revenue was different to our expectations such that Accrufer US revenues of $11.6m compared with $3.6m in 2022 but came in below our estimate of $13.6m. In the release, the company has noted that the methodology used by the third-party data provider for US Accrufer scrips has resulted in an overstatement for 2023. Revised figures for 2023 have been given showing 77,000 total

ANGLE: Building content to drive widespread adoption

ANGLE’s investment case rests on where Parsortix’s position in mainstream cancer diagnostics eventually lands. The place of liquid biopsies is now established and, increasingly, the additional clinical value that CTC (circulating tumour cells) assays bring is becoming clear. Addressing the many, varied opportunities directly is challenging and time consuming, with numerous barriers to overcome. Management is creating industry awareness through its demonstration and acceleration activities, which