Hikma hits the jackpot with doxycycline shortage

Courtesy of Hikma

Middle East-based Hikma Pharmaceuticals is not a large pharma player. The drugmaker's $1.365 billion in 2013 revenues is about what a Big Pharma company would report for sales of one drug. But it is one of those drugmakers that have become essential to the global supply chain, prospering by filling the gaps when bigger operators have plant problems and drug shortages arise.

The Jordan-based company reported Wednesday that its operating profits for the year increased more than 110% to $352 million, and its margins nearly so to 30.3%. It has a shortage of the antibiotic doxycycline to thank for that. The drug, used for treating a host of conditions--malaria, sexually transmitted diseases and Lyme disease--was in short supply for months and while it was, Hikma's generic was in big demand. In October, the FDA finally moved it to "resolved" shortage status. Hikma reported Wednesday that it actually expects its generics sales to fall by $100 million in 2014 as competition builds for that product.

Even with that significant reduction, it expects to grow revenue this year by 5%, propelled in part by growth of 20% in sales of sterile injectables. The company, which makes both branded and generic drugs, considered selling that business in 2012 but then determined it was worth more to keep and grow. That is an area where there have been a lot of drug shortages.

The company said it spent about $39 million last year on remediation at its West-Ward plant in Eatontown, NJ, that it closed in 2012 after getting an FDA warning letter. It said that the FDA reinspected the plant in February and the company is waiting to hear back about its regulatory status. Hikma said that it picked up some transdermal and dermatology niche products last year that it intends to produce at the plant, along with reintroducing the product portfolio it already manufactures here.

- here's the earnings release (PDF)
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