37. Hikma Pharmaceuticals Plc
Medicine Makers
Rooted in Jordan but headquartered in London, Hikma Pharmaceuticals Plc develops, manufactures, and markets a wide range of medicines, serving patients worldwide. Operating in the pharmaceutical industry – specifically in generic, branded, and injectable drugs – the company supplies affordable healthcare solutions across the Middle East, North America, Europe, and beyond, competing with firms like Teva and Mylan.
Hikma’s revenue stems from three key divisions: Generics, Branded, and Injectables. The Generics division produces off-patent drugs, such as tablets and capsules, selling them at lower costs to hospitals, pharmacies, and governments; for instance, a generic antibiotic might retail for £5 per course. The Branded division focuses on proprietary drugs, particularly in oncology and chronic diseases, marketed in the Middle East and North Africa (MENA), where it became the second-largest pharma player by sales in 2023. Injectables, a high-growth area, include sterile solutions like anaesthetics and oncology drugs, sold to healthcare providers globally. In 2024, Hikma reported core revenue of $3.156 billion, up 10% from $2.875 billion in 2023, with core operating profit rising to $719 million and core EBITDA at $824 million, driven by strong demand and strategic acquisitions despite a 3% dip in Generics gross margin due to higher royalties.
Strategically, Hikma has expanded its manufacturing footprint, with a new $100 million facility in Saudi Arabia boosting MENA capacity, and invested in research and development to launch complex generics and first-to-market drugs. However, challenges have emerged; a 2025 US regulatory probe into its opioid distribution practices, following a $150 million settlement for inadequate monitoring, raises concerns about future fines or reputational damage. Economic pressures, including inflation, have also squeezed margins, while the company’s reliance on the volatile US generics market, which saw a profit dip, adds risk. Employing 9,600 people, Hikma anticipates 2025 revenue growth of 6-8%, but its aggressive expansion into high-stakes areas like oncology could strain resources if approvals lag.
Hikma’s focus on affordable generics and growing branded portfolios positions it well in emerging markets, but regulatory scrutiny, market competition, and execution risks in its ambitious growth plans could undermine its stability.
It is difficult to get excited about a business like Hikma. It doesn’t do anything badly but nor is it exceptional in any meaningful way. Exceptional businesses are the mantra of Wonder Stocks and therefore no further work will be done on Hikma.
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