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WEST-WARD PHARMACEUTICAL

About WEST-WARD PHARMACEUTICAL

Hikma Pharmaceuticals seeks the right prescription for generic drug success. The company makes some 700 branded and unbranded generic drugs, which are available in a variety of forms and dosage strengths. About 40 product lines are distributed through licensing agreements with other pharmaceutical companies. Hikma's products are distributed to doctors, – more... hospitals, and pharmacies in about 50 nations in North America, Europe, the Middle East, and Africa through its network of sales representatives. The company conducts research and development in areas such as cardiology, anti-infective, neurology, and dermatology. Hikma Pharmaceuticals was founded in 1978 by chairman Samih Darwazah.

Geographic Reach

The Middle East and North African (MENA) region has grown to become Hikma's largest geographic sales segment. The company also sells both unbranded and branded generic drugs in North America and Europe.

Hikma's oral generics business makes and sells about 50 products, including controlled substances and antibiotics, in the US and has plants in the MENA region. The company's sterile injectables segment makes about 170 medicines in fields including oncology, cardiovascular, infectious disease, and neurology at its manufacturing centers in Germany, Portugal, and the US; injectable products are sold in the US, Europe, and the MENA region. The branded segment makes about 450 generic and in-licensed drugs -- including anti-infectives, cardiovascular, neurology, and metabolic medicines -- that are made and sold in the MENA region.

Sales and Marketing

A majority of Hikma's products are sold through wholesale distribution companies.

Financial Analysis

Hikma reported a 25% jump in revenues to some $1.4 billion in 2011 due to increased product sales, primarily attributed to acquisitions in the branded products segment. The company also experienced high demand in the injectables segment due to a shortage of certain medicines from other suppliers. Net income declined 20% to $124 million, however, due to increased operating expenses including acquisition costs.

Strategy

The company pursues growth by expanding its geographic reach and its product line, both through internal research efforts and through acquisitions. Hikma has been particularly focused on increasing sales of branded generic products (often licensed products) in the MENA region. The company is also focused on widening its presence in the US, where it pursues niche product opportunities in the highly competitive unbranded generics market. Hikma has also expanded its global injectable drug operations by increasing manufacturing capacity and sales efforts. Through combined R&D and acquisition efforts, the company added nearly 250 new products during 2011.

Mergers and Acquisitions

In 2011 Hikma expanded its operations in the MENA core growth region by acquiring a majority stake in Moroccan pharmaceutical company Promopharm for $111 million, adding some 200 branded generic and in-licensed products. The company also purchased a Sudanese generic drugmaker, Elie Pharmaceuticals, that year.

To enhance its active pharmaceutical ingredients (API) sourcing capabilities, Hikma acquired minority stakes in two API manufacturers in 2011: China-based Hubei Haosun Pharmaceutical Co. Ltd. (Haosun) and India-based Unimark Remedies. Hikma is also collaborating with Unimark on the development of new generic API formulations.

In addition, as part of its growth strategy in the injectables segment, in 2011 the company purchased Baxter's generic multi-source injectables business for about $112 million. The deal included chronic pain, anti-infective, and anti-nausea products, as well as a manufacturing facility in New Jersey and a warehouse and distribution center in Tennessee. – less

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