This week’s stock of the week is international pharmaceutical company Hikma Pharmaceuticals which has recently impressed the market with raised forecasts for 2018.

Hikma is set apart from its larger pharmaceutical rivals in that its focus on both branded and unbranded generic drugs and its sales exposure is geared towards the Middle Eastern, North African and American markets.

The group was founded in Jordan in the late seventies and subsequently grew due to demand for affordable drugs and the needs of a growing population in the region. The trend that generic drugs will continue to take an increasing share of the market is becoming more apparent and Hikma is in a good position to benefit from this.

In regards to products, the group holds a strong pipeline which are currently seeking FDA approval and despite the setback in the launch of a generic version of Glaxo’s Advair Diskus (asthma) product, management remain confident of addressing the US regulators demands, with new data expected in 2019.

Interim results in August gave the share price a boost with earnings at the top end of expectations. Profit rose by 41% to $141m on the back of an 11% rise in revenue to $989m. The dividend was 12 cents (11c). The important injectables business performed well in the US. The company raised its guidance for the year for its generics and injectables divisions.

The company hope to be well positioned from the many drivers of growth in this sector and to take full advantage it continues to place emphasis on its pipeline. Improved results this year has seen a sharp rebound in the share price to a 15-month high, following on from a difficult 2017.

However, we continue with our ‘buy’ recommendation for investors seeking capital growth and willing to accept a higher level of risk.