Hikma Pharmaceuticals (LON:HIK) used its latest earnings call to outline a leadership reshuffle, review 2025 performance, and set expectations for 2026 as management pivots toward increased investment—particularly in Injectables—while aiming to sustain group profitability and returns.
CEO outlines priorities and management changes
Returning to the CEO role, Said said his initial focus is on four themes: stability, agility, investment, and long-term growth. He told investors he is “laser-focused” on putting the group on “a stronger and more stable footing,” while rebuilding an entrepreneurial culture with quicker decision-making and clearer accountability. He also emphasized a shift toward accelerating investment in people, technology, facilities, and R&D to support sustainable profit growth.
- Mazen, previously Vice Chairman and President of MENA, was appointed Vice Chairman and Deputy CEO, MENA, with MENA Injectables now reporting to him.
- Khalid was appointed Deputy CEO, North America and EU, overseeing Hikma activities across North America and Europe and accountable for results in Hikma Rx and Injectables in those regions.
- Khalid will step down as CFO; the board has started a search for a permanent successor. Arabi El-Kurdi, VP Finance, will serve as Acting CFO in the interim.
- Hafrun, Global Head of R&D and President of Hikma Rx, will add management of U.S. Injectables commercial activities and become President, U.S. in addition to her R&D role.
At the board level, Said said he will relinquish his Executive Chairman responsibilities to focus on being CEO. Victoria Hull, currently Senior Independent Director, will become Chair, and Douglas Hurt will take on the Senior Independent Director role.
2025 results: revenue up 6% as Injectables profitability weakens
Management said Hikma delivered a “solid group performance” in line with guidance in 2025, citing strong momentum in Branded and Hikma Rx as well as growth across geographies. The company reported 6% revenue growth and a 3% increase in core operating profit, with “resilient margins” and an EBITDA margin of 25.5%. Said also highlighted strong cash generation and said return on invested capital remained in the mid-teens, a level he said he is committed to maintaining.
However, profitability in the Injectables business came under pressure due to product and geographic mix, prompting management to call for increased focus and investment to restore a stronger growth trajectory.
Business unit performance: Branded leads, Rx steady, Injectables margin pressured
Branded posted what management called an “excellent year,” with revenue up 10% and a core operating margin of 26.4%. Khalid said the company delivered double-digit growth in its two largest MENA markets, Algeria and Saudi Arabia, and saw good growth across most other markets. Management attributed performance to a push into more complex, higher-value products and market share gains in key therapeutic areas, citing a particularly strong showing in diabetes and oncology. The company also said it is now the largest pharmaceutical company by sales in MENA.
Hikma Rx generated more than $1 billion in revenue, in line with expectations. Khalid cited demand for more differentiated products such as generic Advair and fluticasone nasal spray, with price erosion in the mid-single digits. Core operating margin was 17.3%, which management said was ahead of expectations, driven by reduced sales and marketing costs following the outsourcing of Glaukos. Management also emphasized contract manufacturing as an important contributor, noting progress preparing the Columbus site for a “significant upcoming” CMO contract and expecting related revenue in 2026.
Injectables revenue grew 7%, in line with initial guidance, but profitability declined. North America sales grew 5%, supported by a full-year contribution from the Xellia acquisition and new launches, which management said more than offset increased competition in parts of the base business. Europe grew 23%, with strong performance including Germany and France, while MENA rose 9% on in-licensed biosimilar and innovative products.
Core operating profit in Injectables fell 6% and core operating margin declined from about 35% in 2024 to 31% in 2025. Khalid attributed the margin decline to several factors, including competition on two high-margin products (testosterone and calcitonin), a higher contribution from lower-margin MENA sales, growth from partner and third-party manufactured products that carry royalties or profit-sharing, and currency headwinds from a stronger euro. He also pointed to year-end inventory write-downs, including liraglutide after a significant price drop and VANCO READY as the company transitions to TYSAVAN. Management said these items contributed to a margin result of 31% versus guidance of 32%–33%.
Investment and pipeline: R&D reset and capacity expansion
Looking forward, management described a strategic reset in Injectables, including a willingness to pursue opportunities with margins below 30% to drive sustainable profit growth. Khalid said the company now expects Injectables margins to be closer to 27%–28% “for at least a few years,” reflecting higher R&D spending, a lower CMO outlook as some customers require domestic U.S. production the company cannot yet offer, identified sales and marketing gaps, and delays to certain launches. From 2027, management said it expects a return to growth in absolute profit.
Said pointed to growth drivers including TYSAVAN ready-to-use bags, launched in December 2025, which the company expects to grow steadily through 2026 and beyond as it takes share from other presentations. He also said Hikma is exploring launching TYSAVAN in Europe and MENA through its own teams and through out-licensing partnerships.
Management said it will step up R&D investment in Injectables in 2026 and 2027, targeting R&D spend of around 5%–6% of revenue, with an emphasis on more differentiated and complex products. On capacity, the company said work continues at the Bedford site, with timelines unchanged from a November update and the facility expected to come online in 2028 to support ready-to-use products and strengthen the CMO business.
In R&D, Hafrun said Hikma has continued a transformation of the function through a global organization, project streamlining, reorganization into focus areas, and new KPIs. She highlighted priorities including balancing simple and complex formulations, building in-house capabilities in ready-to-use and inhalation, leveraging manufacturing-driven differentiation, and improving speed through shorter development timelines and better first-cycle approval rates.
Hafrun said the company’s current development work in the U.S. and Europe addresses a market opportunity of about $90 billion. She also outlined launch expectations through 2029, including over 250 product launches across regions, and said 2026 targets include 26 launches in the U.S. across oral solids and injectables, including two complex long-acting injectables. She flagged 2028 as a key year for nasal products, including an expected U.S. launch of epinephrine nasal spray.
2026 guidance: modest revenue growth as margins shift by segment
For 2026, management issued guidance reflecting planned investments. Hikma expects group revenue growth of 2%–4% and $720 million to $770 million of core operating profit. Segment expectations include:
- Injectables: low single-digit revenue growth; core operating margin of 27%–28%
- Branded: revenue growth of 6%–8% in constant currency; core operating margin around 25%
- Hikma Rx: broadly flat revenue; core operating margin close to 20%
Management also discussed cash flow and leverage, stating the company ended 2025 with net debt to core EBITDA of 1.6x. Total debt increased by roughly $300 million, which management attributed to a legal settlement, higher capital expenditures, and product acquisitions. The company noted it received a BBB credit rating upgrade from both S&P and Fitch during the year and said 2025 CapEx was close to $200 million. Operating cash flow, excluding the one-off legal settlement, increased 10%.
Closing the call, Said reiterated confidence in the strategy and said the company aims to maintain—and potentially exceed—its historical growth and returns, while balancing margin optimization with sustainable profit growth.
About Hikma Pharmaceuticals (LON:HIK)
At Hikma we help put better health within reach, every day. By creating high-quality medicines and making them accessible to the people who need them, we help to shape a healthier world that enriches all our communities. We help deliver this by living our culture, delivering our strategy, and acting responsibly. We are a trusted, reliable partner and dependable source of over 800+ (as of Feb 2025) high-quality generic, specialty and branded pharmaceutical products that hospitals, physicians and pharmacists need to treat their patients across North America, MENA and Europe.
