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Hikma Pharmaceuticals posts loss after US write-down

Hikma has shed two-thirds of its value over the past year due to product setbacks and a profit warning in August
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Hikma Pharmaceuticals PLC (LON:HIK) slumped into a loss as it wrote down the value of the West-Ward Columbus acquisition by more than US$1bn.

The move marked yet another disappointment for the generic drug manufacturer, which has shed two-thirds of its value over the past year due to product setbacks and a profit warning.

READ: Hikma Pharmaceuticals and Vectura hit by US regulatory setback

Earlier this week, an alternative to GlaxoSmithKline’s Advair asthma inhaler that was being developed with Vectura was rejected by the US Food and Drug Administration until at least 2020.

Losses in 2017 were US$738mln (US$210mln profit), with sales also lower at US$1.94bn.

Core profit fell 9% to US$328mln as operating margin fell to 19.9% from 21.5% reflecting lower profitability in the Generics and Injectables businesses.

Going forward, Hikma said Injectable division revenues will be flat in 2018, Generic sales will fall while Branded products will see mid-single digits growth.

Jordan–based Hikma added that cash generation had been a record over the year and the annual dividend rises to 34c from 33c.

West-Ward Columbus was acquired in 2016 for US$2.65bn.

Shares rose 8% to 940p as brokers said the core profit was well ahead of some of the gloomier forecasts beforehand, while after their heavy fall there was not much downside left.

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