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Investing.com -- Hikma Pharmaceuticals (OTC:HKMPY) shares fell more than 7% on Thursday after the company reported lower first-half margins in its injectables and U.S. generics units, even as it posted higher group revenue and reaffirmed full-year guidance.
Group revenue for the first half of 2025 rose 5.7% to $1.66 billion, up from $1.57 billion a year earlier.
Core operating profit fell 7.2% to $373 million, with the group margin narrowing to 22.5% from 25.6%.
The British pharmaceutical company kept its full-year 2025 guidance unchanged, projecting revenue growth between 4% and 6%, and core EBIT in the range of $730 million to $770 million.
Injectables, the largest segment by sales, grew 12.2% year over year to $683 million, beating consensus expectations of $658 million.
Despite the top-line strength, core EBIT in the segment fell 8%, and the margin dropped to 30% from 36.3%.
The company cited geographic mix, increased U.S. competition, and a dilutive effect from its recently acquired Xellia portfolio.
Full-year injectables revenue growth guidance was reiterated at 7% to 9%, but the margin forecast was reduced to 32%–33% from “mid-30s.”
Revenue in the U.S. generics segment (US Rx) slipped 0.9% to $523 million, matching consensus estimates. Core EBIT declined 12% to $92 million, with the margin falling to 17.6% from 19.7%.
Hikma attributed the drop to increased research and development spending, partially offset by lower sales and marketing costs. Inhalation volumes increased, and sodium oxybate maintained its market position. The company said its Columbus (WA:CLC) facility is being readied for a contract manufacturing agreement with a global pharmaceutical company.
Branded revenue rose 4.3% to $437 million, with core EBIT up 3% to $133 million and a margin of 30.4%, slightly lower than 30.8% a year earlier.
The company cited tender timing as a key factor. Full-year branded revenue growth guidance of 6% to 7% in constant currency and a margin of approximately 25% remain unchanged.
Foreign exchange pressures affected injectables during the first half but are expected to benefit the branded business in the second half, the company said.