Jordanian generics drugmaker Hikma Pharmaceuticals has posted a decline in operating profits for 2008, due to a poor showing in the USA, but a healthy revenue rise.

Operating profit came in at $80.7 million, down 12.7%, but revenues leapt 29.4% to $580.7 million. That latter rise was principally due to strong growth in Hikma’s key markets, the Middle East and North Africa (MENA), particularly in Algeria, Jordan, Saudi Arabia and the other Gulf Cooperation Council countries.

Sales at Hikma’s US generics business fell 14.9% to $106 million, but it has returned to profit in the fourth quarter following management changes and operational improvements. Chief executive Said Darwazah said that the moves planned in the USA to promote generics, plus a recovery in prices, can only help the business and said that the unit could be sold.

He said that “when the time comes, we feel we have a good deal, that we can exit the business very profitably or that we should concentrate on other parts of the business, we will do that”. Mr Darwazah added that for the group as a whole, which is listed on the London Stock Exchange, 2009 is “going to be a very, very tough year”, and revenue growth will be in the region of 10%-15%. “We're going to concentrate on the balance sheet, on the cash flow, on controlled growth”, he added.

Referring to big pharma’s renewed interest in the emerging markets of late, Mr Darwazah said that this “really creates challenges and opportunities for us and that's where you want to be. You want to compete with big pharma”. He added that “what you don't want to do is compete with the low end, the generic manufacturers, where you have to reduce your prices and reduce your sales and marketing teams”.

He believes that co-operation with the major players is the way forward. “We are talking to quite a reasonable number of big pharma companies” about co-marketing, co-promotion and contract manufacturing, Mr Darwazah said.

As for mergers, the CEO said that “we're looking at $50-$100 million acquisitions, which are our strength, really”. A lot of these deals “are below the radar of big pharma but for us these sorts of acquisitions have proven to be very, very beneficial”, he added, noting that the MENA region is where deals will be sought.