Jordan pharma group mulls injectables unit sale
Amman, March 2, 2013
Jordan-based Hikma Pharmaceuticals said it is reviewing options for its lucrative injectables business after receiving several unsolicited expressions of interest, driving up its shares nearly 8 per cent to a life-high.
The injectables business could fetch Hikma between $1 billion and $2 billion, four analysts estimated.
"There was no intention of divesting that business, but if somebody wants to pay a very good return for that business they would have to look seriously at that," a spokeswoman for Hikma told Reuters.
It was not surprising that Hikma's injectables business has attracted suitors, Jefferies & Co analyst James Vane-Tempest said. "Injectables is a "hot area" for generics M&A right now," he added.
Drugmaker Mylan said on Wednesday that it would buy the injectables unit of India's Strides Arcolab for $1.6 billion. It expects global generic injectable drug sales to grow faster than other dosage forms, helped by a raft of patent expiries.
Hikma's injectables unit, the second-biggest supplier of generic injectables in the US, has been benefiting from a drug shortage there as several companies face stringent regulatory scrutiny due to quality issues.
The company, founded in Jordan in 1978, said in October that most of its growth in the second half of 2012 would come from its US injectables business, which accounted for about 60 per cent of total injectable sales in the first half.
Revenue from the injectables business, which also operates in the Mena region, doubled in the first half to 225.2 million pounds ($341.8 million). Revenue from the business has more than doubled in the past three years.
Bank of America Merril Lynch is advising Hikma on the strategic review.
Hikma, which also makes and sells branded and generic drugs, had a market capitalisation 1.71 billion pounds based on the stock's closing price on Thursday.
Shares in the company Hikma's shares touched a high of 933.5 pence on the London Stock Exchange on Friday.-Reuters