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Hikma Raises FY View, Signs Agreement With Vectura; Stock Up

Hikma Pharmaceuticals PLC (HIK.L, HKMPY) reported Thursday continued strong performance of the Group this year. The company said it is raising full year guidance, as it is delivering revenue growth and, more importantly, improving profitability ahead of expectations in both Generics and Injectables businesses.

In the MENA, Branded business is continuing to grow steadily and the company remains on track to meet full year guidance. Across the Group, the firm is benefiting from large and well-diversified portfolios, new product launches and high-quality, flexible manufacturing facilities.

During today's Investor Day in London, senior managers from across the Group will provide updates on business, markets, the growth opportunities for the future and the company's plans to capture them.

In the Injectables business, the company raised 2018 guidance and now expect Injectables revenue to be in the range of $825 million to $850 million and core Injectables operating margin to be between 39% and 40%.

The company now expects full year Generics revenue to be in the range of $675 million to $700 million and core Generics operating margin to be in the low teens.

Branded revenue growth for the full year is expected to be in the mid-single digits in constant currency.

The company will announce results for the year ending December 31, 2018 on March 13, 2019.

Separately, Hikma announced that it has signed an agreement with Vectura Group plc for the global development and commercialisation of generic versions of GSK's Ellipta portfolio, utilising Vectura's proprietary Open-Inhale-Close dry powder inhaler device.

Upon signing, Hikma will make an upfront payment of $15 million to Vectura, which will be responsible for, and fund, initial device and formulation development. Hikma will be responsible for clinical development, regulatory submission and commercialisation.

Upon transfer of the first product to Hikma's manufacturing facility to enable clinical manufacturing, Hikma will make a $5 million milestone payment to Vectura. Thereafter, Hikma will make milestone payments of up to $75 million at various stages of development

Following interactions with the US FDA, Vectura and Hikma believe the Open-Inhale-Close dry powder inhaler device has the potential to be developed as an AB-rated substitutable drug-device combination for generic versions of the GSK Ellipta portfolio. This presents a significant opportunity, with net sales for Ellipta products in the US projected to be $4 billion by 2024 and approximately $5.5 billion globally.

Hikma shares are currently trading at 2,061.00 pence, up 7.48 percent.

Vectura shares are currently trading at 76.25 pence, up 6.79 percent.

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