Hikma Announces Tie-Up With Vectura; Raises Guidance

By Carlo Martuscelli

Hikma Pharmaceuticals PLC (HIK.LN) announced Thursday a tie-up with inhaler producer Vectura Group PLC (VEC.LN) to collaborate on the development of generic versions of GlaxoSmithKline PLC's (GSK.LN) Ellipta drugs.

Hikma also raised its guidance on the back of a strong performance in its injectables division. The generic drug manufacturer said it now sees revenue from the medicine group in the range of $825 million to $850 million, with a core injectables operating margin of between 39%gene and 40%.

The company said Vectura's inhaler technology has the potential to be developed into a generic version of the Ellipta portfolio--a group of drugs for the treatment of chronic obstructive pulmonary disease and asthma. The deal includes the development of at least three drugs in the portfolio, with first priority going to developing a generic version of Breo Ellipta.

Under the terms of the deal Hikma will make an upfront payment of $15 million to Vectura. Vectura will develop the device and formulation, while Hikma will be responsible for clinical development, the regulatory process and commercialization, Hikma said.

Once the first product is delivered to the company's facilities to enable clinical manufacturing, Hikma will make a $5 million payment to Vectura followed by milestone payments of up to $75 million at various stages of development.

Once the products are developed Hikma said it will pay net profit up to a mid-teen percentage for each product, plus sales milestone payments. Vectura in turn will pay up to $70 million for development activities, Hikma said.

The company noted the generic respiratory market is a key area of focus for the company and said its injectables division continues to perform ahead of expectations.

"While the US retail market remains challenging, with continued price erosion, the recent commercial and operational improvements we have made to our business are enabling us to deliver strong growth from our more differentiated portfolio," it said.

Write to Carlo Martuscelli at carlo.martuscelli@dowjones.com

(END) Dow Jones Newswires

November 08, 2018 03:11 ET (08:11 GMT)

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