Q2 2026 Hikma Pharmaceuticals PLC Earnings Call - Q&A

Speaker #1: This is.

Said Darwazah: We thought this is a livelier area. Obviously, we are delighted.

Speaker #2: You thought this was a livelier area. Seriously, we are delighted.

Speaker #1: Yeah, just one second.

Guy Featherstone: Yeah.

Susan Ringdal: Just one second.

Speaker #3: One second, we'll just go live on the call. I'll just read out, I'll just go there, and then I'll hand over. So, good morning everyone, and welcome to Hikma's 2026 interim results meeting with our CEO, Syed Darwaza, and Acting CFO, Arif Kurdi.

Guy Featherstone: One sec. We will just go live on the call. I will just read out our disclaimer.

Said Darwazah: Okay

Guy Featherstone: Then I will hand over to Said. Good morning, everyone, and welcome to Hikma's 2026 interim results meeting with our CEO, Said Darwazah, and Acting CFO, Areb Kurdi. We also have Susan Ringdal and myself, Guy Featherstone, investor relations. Before we start, I would like to remind you that any forward-looking statements or projections made by Hikma during this call are made in good faith based on information currently available and are subject to risks and uncertainties that may cause actual results to differ materially from those projected. For further information, please see the Principal Risks and Uncertainties section in Hikma's latest annual report. With that, I will hand over to Said for opening remarks before we head to Q&A.

Speaker #3: And we also have Susan Ringdahl and myself, Guy Featherston, Investor Relations. Before we start, I would like to remind you that any forward-looking statements or projections made by Hikma during this call are made in good faith, based on information currently available, and are subject to risks and uncertainties that may cause actual results to differ materially from those projected.

Speaker #3: For further information, please see the principal risks and uncertainties section in Hikma's latest annual report. And with that, I'll hand over to Syed for opening remarks before we head to Q&A.

Speaker #2: Thank you. Thank you so much. So, just quickly, a few things to say. Obviously, so the results sales are up. I think what's very exciting is that EBIT and EBITDA are up by almost 8%.

Said Darwazah: Thank you. Thank you so much. Just quickly, a few things to say. Obviously, you saw the results. Sales are up. I think what's very exciting is that EBIT and EBITDA are up by almost 8%, EPS is up by 5%. When we met last time, we said we had four targets this year. One is to stabilize the business. Said, we're talking about the Injectable business. The other two businesses were doing well. I think this has been achieved. We've talked about making the company more agile, quicker decision-making. We have taken tons of decisions. Now the way the company is structured, I think very much supports this quick decision-making, supports the senior management of the team to take quick decisions and to take quick actions and reactions where they are needed. We said we will invest for the future.

Speaker #2: EPS is up by 5%. And when we met last time, we said we had four targets this year. One is to stabilize the business.

Speaker #2: And actually, we're talking about the objective of the business. The other two businesses we're doing well. And I think it this has been achieved.

Speaker #2: We talked about making the company more agile, quicker decision-making. And we have taken tons of decisions and now the way the company is structured, I think very much supports this quick decision-making.

Speaker #2: It supports the senior management of the team to take quick decisions, and to take quick actions and reactions where they are needed. We said we will invest for the future.

Speaker #2: We have done a lot of investment in people. I think it’s most important in talent and people. We have done investment in equipment. And, of course, R&D spend, as you can see, is up.

Said Darwazah: We have done a lot of investment in people, I think is most important, in talent and people. We have done investment in equipment. Of course, R&D spend, as you can see, is up. We are really setting up the company for the future. We hope that, again, we feel extremely comfortable to reiterate full-year guidance. As we have seen, MENA has done extremely well, exemplary good. I've always told you this company has three engines to drive it. I always said that even when one of the divisions or one of the engines is facing some headwinds, the others can make it up and move it faster. MENA is doing extremely well. Obviously, we have big ambitions for the MENA to continue. Injectables, as you see, as we said, we have stabilized the business.

Speaker #2: So, we are really setting up the company for the future. So we hope that, you know, again, we feel extremely comfortable to reiterate fully your guidance.

Speaker #2: As we have seen, Mina has done extremely well—exemplary, in fact. I’ve always told you this company has three engines to drive it. And I always said that even when one of the divisions, or one of the engines, is facing some headwinds, the others can, you know, make it up and move it faster.

Speaker #2: So Mina is doing extremely well, and we obviously we have big ambitions for the Mina to continue. Injectables. We have as you see, we have as we said, we have stabilized the business.

Speaker #2: And RX is delivering very good margins compared to where it was just a few years ago. So these are the background. Again, I think we should always remember this is a company that's been driven, that has three businesses.

Said Darwazah: Rx is delivering very good margins compared to where it was just a few years ago. These are the background. Again, I think we should always remember this is a company that's been driven, that has three businesses. If you look at historically, we've always had one of the businesses push the company forward if the others were lagging behind. If you look at the CAGR over the last 10 years, of course, the first H1 of this year, we'll see that every year there has been growth both in sales and in profitability. I think CAGR for the last 10 years was 8% for sales and 6% or 5% for profitability. We hope to start driving the Injectable business next year to start growing the profitability top line and bottom line there as we continue to move the other divisions forward.

Speaker #2: And if you look at it historically, we've always had one of the businesses push the company forward if the others were lagging behind. And if you look at the CAGR of the last 10 years, and of course the first half of this year, you'll see that every year there has been growth both in sales and in profitability.

Speaker #2: I think CAGR for the last 10 years was 8% for sales, and 6% or 5% for profitability. We hope to start driving the injectable business next year to start growing the profitability, both top line and bottom line, there.

Speaker #2: As we continue to move the other divisions forward. So with that, Riad Mishlawi is here with me also, and we are ready to take your questions.

Said Darwazah: With that, Areb is here with me also. We are ready to take your questions. Good, Areb?

Speaker #1: Good. Sorry.

Speaker #3: If you could just wait for a microphone and then please introduce yourself. So, James.

Guy Featherstone: If you could.

Said Darwazah: James

Guy Featherstone: wait for a microphone and then please introduce yourself. Said, James.

Speaker #2: James, yes, please.

Said Darwazah: James, yes, please.

James Gordon: Thank you. James Gordon from Barclays, thanks for taking the two questions. The first question was on the branded business. In terms of phasing, you had a strong H1, both on the top line and the margin. I think for the full year, you said you'll be at the better end on the top line. How much of the H1 strength was this one-off factor or the phasing factor, and also how much of the cost? What would H1 look like on a clean basis? How much more cautious do we need to be about H2? That would be the first question, please. The second question was generics. I think although you've reiterated the guidance overall, I think the margin before was around 20% and it is now approaching 20%.

Speaker #1: James Gordon from Bulge Bracket News, and thanks for taking the two questions. The first question was on the branded business. So in terms of phasing, you had a strong H1, both on the top line and the margin.

Speaker #1: And I think for the full year, you said you'll be at the better end on the top line. But how much of the H1 strength was this one-off factor, or the phasing factor?

Speaker #1: And also, how much of the costs? So, what would H1 look like on a clean basis? How much more cautious do we need to be about H2?

Speaker #1: That would be the first question, please. And then the second question was generics. I think although you've reiterated the guidance overall, I think the margin before was around 20% and it's now approaching 20%.

Speaker #1: So, what, if anything, has changed there? And is that a big difference, or just a minor difference, please?

James Gordon: What, if anything, has changed there, and is that a big difference or just a minor difference, please?

Speaker #2: You want to take that, Mina? Yes, go ahead.

Said Darwazah: You want to take the generic?

Areb Kurdi: Yeah. In terms of sales, James, this is the normal trend that we see every year. There is a trend in tender business, there was many tender businesses delivered in H1 in terms of sales. Also we've seen some good demand, especially at the beginning of the war. Some governments started to stock up, although we see this has normalized at the end of H1. Also importantly, we had many sales and marketing events and expenses that were either intentionally postponed due to the situation, or we had to postpone them because there was limitations on the travel, et cetera. We will see those events happening in H2.

Speaker #3: In terms of sales, James, this is the normal trend that we see every year. There is a trend in the tender business, so there were many tender businesses delivered in the first half.

Speaker #3: In terms of sales, also we've seen some good demand, especially at the beginning of the war; some governments started to stock up. Although, we see this has normalized at the end of H1.

Speaker #3: But also importantly, we had many sales and marketing events and expenses that were either intentionally postponed due to the situation or we had to postpone them because, you know, there was limitations on the travel, et cetera.

Speaker #3: So we will see those events happening in the second half.

Speaker #1: Are you able to quantify those? Are you able to say broadly how significant those are if we're trying to do, like, a clean model for H2?

James Gordon: Are you able to quantify those costs? Are you able to say broadly how significant those are if we're trying to do a clean model for H2?

Speaker #3: So, I would say H1 would be 50% to 55% weighted in terms of sales, and more weighted towards EBIT in the second half.

Areb Kurdi: I would say H1 would be 55% weighted in terms of sales, and more weighted towards EBIT in H2.

Speaker #2: So obviously we're also taking consideration that things haven't settled down yet. And, you know, there's a lot of uncertainty in the region, which historically has been helpful to HIKMA, but it's always be, you know, it's wise to be careful about, you know, about the plan for the second half.

Said Darwazah: Obviously, we're also taking consideration that things haven't settled down yet and there's a lot of uncertainty in the region, which historically has been helpful to Hikma, it's always wise to be careful about the plan for H2. The Rx division, we said that we would push the margins to where they are now. Sodium oxybate has done very well. We've seen a little more competition for generic Advair. We also, as we've said before, we do have big plans for CMO. We see CMO business picking up there. Any kind of headwinds that, let's say, sodium oxybate will face, will be picked up by the CMO business.

Speaker #2: The RX division, we as you know, we said that we would push the margins to where they are now. Sodium absorbate has done very, very well.

Speaker #2: We've seen a little more competition for the generic Advair. But, as we've said before, we do have big plans for CMO. We see the CMO business picking up there, so any kind of headwinds that, let's say, sodium ascorbate will face will be picked up by their CMO business.

Speaker #1: Thanks. Hello, Daniel from JPMorgan. Thanks for taking the questions. First question is on Tyser Van. If you could provide us maybe a bit more color on how that's performing relative to your expectations.

James Gordon: Right.

Zain Ebrahim: Hello. Zain Ebrahim, JPMorgan. Thanks for taking the questions. First question is on TYZAVAN. If you could provide us maybe a bit more color on how that's performing relative to your expectations. I think you said that 80% of Ancaready customers have now switched or partially switched onto TYZAVAN. How does that compare versus your expectations at the start of this year? And what underpins your confidence in an acceleration in H2 of this year for TYZAVAN and into 2027? That's the first question. Second question is on Rx launches. I think you've had quite a strong launch so far with tapentadol. More broadly, are there any other launches that we should be excited about in the next 12 to 18 months? And what's the latest on epinephrine nasal spray filing?

Speaker #1: I think you said that 80% of Anchor Ready customers have now switched or partially switched onto Tyser Van. So, how does that compare versus your expectations at the start of this year?

Speaker #1: And what underpins your confidence in an acceleration in the second half of this year for Tyser Van and into 2027? That's the first question.

Speaker #1: Second question is on RX launches. I think you've had quite a strong launch so far with Tepentadol. So more broadly, are there any other launches that we should be excited about in the next 12 to 18 months?

Speaker #1: And what's the latest on epinephrine nasal spray filing?

Speaker #2: Okay. So for Tyser Van, it takes a long time for the formularies of the different buying groups to take it on, and even after they say yes, the different hospitals have to start stocking and using it.

Said Darwazah: Okay. For TYZAVAN, it takes a long time for the formularies of the different buying groups to take it on. Even after they say, "We will," it takes some time for the different hospitals to start stocking and using it. We have been seeing a pickup month by month, and we feel very comfortable that for H2 of this year, that we will continue seeing this increase month by month. I think the last three months of this year should be very indicative to give us a full idea of how it will be doing next year. Many of the hospital groups that we were trying to get them to take the product have taken it, we will be seeing the benefit of that. The second question was?

Speaker #2: So we have been seeing a pickup in month by month. And we feel very comfortable that for the second of the half or the second half of this year, that we will continue seeing this increase month by month.

Speaker #2: I think the last three months of this year should be very indicative—to give us a full idea of how it will be doing next year.

Speaker #2: So many of the hospital groups that we were trying to get to, you know, to take the product have taken it. So we will be seeing the benefit of that.

Speaker #2: The second question was.

Speaker #3: RX.

James Gordon: Rx.

Speaker #1: Tepentadol.

Areb Kurdi: Tapentadol and Rx. Tapentadol is going very well. We're authorized generic on that, and it's just been a good launch. I think more broadly, the question was around launches, the launch environment, and obviously that then probably goes into API nasal.

Speaker #3: Tapentadol is going very well. I mean, we have the authorized generic on that, and it's just been a good launch. But I think, more broadly, the question was around launches, the launch environment, and then obviously that probably goes into epinasal.

Speaker #2: Yeah. For the epi, we have I mean, the submission has been done. We're waiting for obviously for the FDA to accept the submission. And that would give us a clearer idea when we get the approval.

Said Darwazah: Yeah. For the API, the submission has been done. We're waiting obviously for the FDA to accept the submission, and that would give us a clearer idea when we get the approval. In the meantime, we have approved the plan for the product. Obviously, it needs major investment in promotion and hiring people and so on. We will begin this as soon as the FDA accepts the submission. Zhang and then Betarsa.

Speaker #2: In the meantime, we have approved the plan for the product. Obviously, it needs major investment in promotion and, you know, hiring people, and so on.

Speaker #2: So, we will begin this as soon as the FDA accepts the submission.

Speaker #1: Giang and then Beatrice.

Speaker #4: Hi, good morning. Giang Nguyen from Citi. So, I have two questions, please. The first one is, in terms of the US injectable business, outside of Tyser Van, could you give some comments on how the rest of the business has been trending, and especially what you are seeing in terms of momentum carrying into the second half of the year?

Giang Nguyen: Hi, good morning. Giang Nguyen from Citi. I have two questions, please. The first one is, in terms of the US injectables business, outside TYZAVAN, could you give some comments on how the rest of the business has been trending, and especially what are you seeing in terms of momentum carrying into the H2 of the year? My second question is, looking at your full year guidance, which you have reiterated, clearly H1 performance has been very good, not only grounded, but also the margins that you have got in injectables and Rx, despite all the increased investment, et cetera. What would you want to see to be able to increase the guidance for the year? Thank you.

Speaker #4: And my second question is, looking at your full-year guidance, which you have reiterated, clearly first half performance has been very good, not only branded, but also the margins that you have got in injectables in RX despite all the increased investment, et cetera.

Speaker #4: So, what would you want to see to be able to increase the guidance for the year? Thank you.

Speaker #2: Yeah. As we said, a lot of work has been put into stabilizing the business in hiring people across all levels, actually. It's not just senior people, but across all levels, including operators for the plants, bringing in the equipment, making sure the bottlenecks are taken care of.

Said Darwazah: Yeah. As we said, a lot of work has been put into stabilizing the business and hiring people, across all levels, actually. It's not just senior people, but across all levels, including operators for the plants, bringing in the equipment, making sure the bottlenecks are taken care of. We've invested heavily in supply chain, both internally, and we brought in external consultants to help us. We are seeing that we have now, as we say, safety stocks. We haven't had safety stocks for a long time. These are very important because they give us the ability to react to the market when there's a need, when there's a shortage, and obviously, it's much more profitable selling those. We have started building up the safety stock. I believe that all these measures that we are taking, increasing the number of units that we are manufacturing.

Speaker #2: We've invested heavily in supply chain, both internally, and we brought in external consultants to help us. And we are seeing, as you are seeing, that we have now, as we say, safety stocks.

Speaker #2: We haven't had safety stocks for a long time. These are very important because they give us the ability to react to the market when there's a need, when there's a shortage.

Speaker #2: And there's obviously it's much more profitable selling those. So we have been started building up the safety stock. And I believe that all these measures that we are taking, increasing the number of units that we are manufacturing, we've always had an issue of supplying the market.

Said Darwazah: We've always had an issue of supplying the market. This hasn't been the issue of demand. Now I think we have much better supply for the market. In terms of R&D expenditure for the Injectables business, there is a huge increase there. We have a big team in Croatia, and we have been giving that team everything they need in terms of personnel, in terms of equipment or whatever they need, trying to expedite things, move them as fast as possible for the submissions. I don't know how many submissions or if you've given any out, any numbers.

Speaker #2: This hasn't been an issue of demand. So now, I think we have much better supply for the market. In terms of R&D expenditure for the injectable business, there is a huge increase there.

Speaker #2: We have a big team in Croatia, and we have been giving that team everything they need in terms of personnel, in terms of equipment—whatever they need—trying to, you know, expedite things and move them as fast as possible for the submissions.

Speaker #2: I don't know how many submissions we've given out, any numbers. But we will be seeing an acceleration of submissions there. And, you know, clearly those submissions will be driving business in 2028 and further.

Susan Ringdal: Yeah.

Said Darwazah: We will be seeing an acceleration of submissions there. Clearly, those submissions will be driving business 2028 and further. We're very optimistic about the future of the Injectables. Beatrice.

Speaker #2: So we're very optimistic about the future of the injectable business.

Speaker #1: Beatrice.

Speaker #4: Hi, Beatrice Peppin from Barenbound. Thank you for taking my questions. For us today, I had a couple on the kind of CMO business. You noted that you expect CMO revenues to pick up in H2 for injectables.

Beatrice Fairbairn: Hi, Beatrice Fairbairn from Berenberg. Thank you for taking my questions. Firstly, I had a couple on the kind of CMO business. You noted that you expect CMO revenues to pick up in H2 for Injectables. Could you just clarify what level of visibility you have on this? Then on the HIKMA Rx segment, the CMO side, you've obviously got your target out there for 20% CMO revenue contribution by 2030 for the segment. Could you give an update on where you're tracking relative to that and what level of visibility you have? Then just a quick one on cost inflation. You noted you absorbed the impact of the cost impact in H1. What cost impact do you expect from inflation in H2? Worth looking further out. Thank you.

Speaker #4: Could you just clarify what level of visibility you have on this? And then, on the Hikma RX segment—the CMO side—you've obviously got your target out there for a 20% CMO revenue contribution by 2030 for the segment.

Speaker #4: Could you give an update on where you're tracking relative to that, and what level of visibility you have? And then just a quick one on cost inflation.

Speaker #4: You noted you absorbed the impact of the cost increase in H1. What cost impact do you expect from inflation in H2? And what's it looking like further out?

Speaker #4: Thank you.

Speaker #2: In terms of inflation, we've been able to absorb all the inflation that we faced so far. The team has really been doing great in navigating all the cost increases.

Said Darwazah: In terms of inflation, we've been able to absorb all the inflation that we faced so far. The team has been doing really great in navigating all the cost increases. This is evident by the margins that we have. We believe we will be able to continue to absorbing the inflation in H2. In terms of the CMO Rx, we are trending well. We are doing good in terms of the plan. We will start commercializing next year for the CMO.

Speaker #2: And this is evident by the margins that we have. We believe we will be able to continue absorbing the inflation in the second half.

Speaker #2: In terms of the CMO RX, we're trending well. We're doing well in terms of the plan, and we will start commercializing next year for the CMO.

Speaker #5: In terms of the target that we set, we still feel comfortable that we can achieve 20% of RX revenue from CMO by 2030.

Susan Ringdal: In terms of the target that we set, we still feel comfortable that we can achieve 20% of the Rx revenue from CMO by 2030. We have one, as we have talked about some of the contracts that we have won. We continue to talk to new partners, sign new agreements. We are gradually building that business.

Speaker #5: So we have won, as we've talked about, some of the contracts. But we continue to talk to new partners and sign new agreements.

Speaker #5: So we are gradually building that business.

Said Darwazah: Again, there is a lot of demand. We are talking to many companies about that, and there has been some serious investment in the Columbus plant and serious expansion that is coming on board. As that comes, we will be able to take care of more of that business. We still are very optimistic. Actually, the only thing that we still have not done from all what we said is hire a top CMO commercial guy. We still very much are looking for that, and we hope to have that filled before the end of the year.

Speaker #2: There's a lot of—again, there's a lot of demand. We're talking to many companies about that, and there has been some serious investment in the Columbus plant and serious expansion that is coming on board.

Speaker #2: And as that comes, we will be able to take care of more of the of that business. So we still are very optimistic. That's the actually the only thing that we still haven't done from all what we said is hire a top CMO commercial guy we're still very much are in, you know, looking for that.

Speaker #2: And we hope to have that filled before the end of the year.

Speaker #5: In terms of the confidence in injectable CMO in the second half, it will be similar to last year. Last year, we had indicated that the CMO would come largely in the second half.

Susan Ringdal: In terms of the confidence in injectables CMO in H2, it will be similar to last year. Last year, we had indicated that the CMO would come largely in H2. That is really down to the timing of when we decide to fulfill those orders. We will see that come in H2. We have good visibility. As we said at the beginning of the year, the CMO will be slightly lower this year than it was last year. Nothing has changed there.

Speaker #5: That's really down to the timing of when we decide to fulfill those orders. And so, we will see that come in the second half.

Speaker #5: We have good visibility. But as we said at the beginning of the year, the CMO will be slightly lower this year than it was last year.

Speaker #5: So nothing has changed today.

Speaker #1: We're going to go to Victor and then Christian.

Guy Featherstone: We are going to go to Victor and then Christopher.

Speaker #3: Great, thank you very much. I was going to ask Victor a question after I’ve been to Barenbound. So maybe two questions on my end: one on potential US tariffs, and one on midterm targets.

Victor Floch: Great. Thank you very much for taking my question. Victor Floch, BNP Paribas. Maybe two questions on my end. One on potential US tariffs and one on midterm targets. On potential US tariffs, you were quite keen to highlight your continued ambition to invest into your US capacity a few weeks ago. I was just wondering whether you've spoken with the US administration since then. One of your competitors, Sandoz, has been arguing yesterday that these tariffs represented actually an opportunity for them, even though they don't have local capacity in the US. Just interesting to get your take on that. Does it change anything in your strategy? If you have any feedback from the US administration, that would be nice. The second one is on midterm targets.

Speaker #3: So on potential US tariffs, so you were quite keen to highlight you were continuing ambition to invest into your US capacity a few weeks ago.

Speaker #3: So, I was just wondering whether you've spoken with the US administration since then. One of your competitors, though, has been arguing yesterday that these tariffs represented actually an opportunity for them, even though they don't have local capacity in the US.

Speaker #3: So just interesting to get your take on that. Does it change anything in your strategy? And, yeah, if you have any feedback from the US administration, that would be nice.

Speaker #3: And the second one on midterm targets. So looks like the business is doing well and you should looks pretty much in track to deliver the guidance of this year.

Victor Floch: Looks like the business is doing well, and it looks pretty much on track to deliver the guidance of this year, but we still lack midterm targets. I was just wondering, what do you still need to see before being able to set up new midterm targets? Is it about capacity, business trends? Just help us understand the key moving parts there. Thank you very much.

Speaker #3: But we still like midterm targets, so I was just wondering: what do you still need to see before being able to set up new midterm targets?

Speaker #3: Is it about capacity, business trends, or—help us understand the key moving parts there? Thank you very much.

Speaker #5: We all take the tariffs in Arab. You can take the midterm guidance. I mean, on tariffs, we are one of the largest domestic manufacturers for generics in the US.

Susan Ringdal: Maybe I'll take the tariffs, and Aram, you can take the midterm guidance. On tariffs, we are one of the largest domestic manufacturers for generics in the US. We feel that we are in a very strong position. We have invested a lot over the years in our US manufacturing, and we continue to invest in US manufacturing. We feel that we have a strong position. We have very good relationships with legislators. In the US, we are in Washington very often. We believe very strongly in building strong domestic manufacturing in the US. We do think that we are well positioned there. The majority of the products that we sell in the US are made in the US.

Speaker #5: So, we feel that we are in a very strong position. We have invested a lot over the years in our U.S. manufacturing, and we continue to invest in U.S. manufacturing.

Speaker #5: So, we feel that, you know, we have a strong position. We have very good relationships with legislators in the US, and we are in Washington very often.

Speaker #5: And, you know, we believe very strongly in building strong domestic manufacturing in the US. So we do think that we are well positioned there.

Speaker #5: And the majority of the products that we sell in the US are made in the US.

Speaker #2: I mean, RX is almost 100% made, 90% in the US. And for injectables, obviously we are increasing capacity in Cherry Hill, and we said in 2028 the Bedford plant will come up, which is purely injectables also.

Said Darwazah: I mean, ADEX is almost 100% made, 90% in the US. For injectables, obviously, we are increasing capacity in Cherry Hill, and we said in 2028, the Bedford plant will come on, which is purely injectable also, so increase the capacity. We think about it seriously. I don't think there is any country in the world that taxes imported pharmaceuticals. Tariffs become something that we've heard a lot, but we haven't seen. I really doubt that we will see it. This is my personal view.

Speaker #2: So, increase the... but, you know, we think about it seriously. I don't think there is any country in the world that taxes imported pharmaceuticals.

Speaker #2: So, tariffs become—I mean, it's something that we've heard a lot about, but we haven't seen. And I really doubt that we will see it.

Speaker #2: This is my personal view.

Speaker #1: Yeah, but as Said and Susan said, we have the foundation in the US. We invested in the US. We're committed to invest in the US.

Areb Kurdi: As Said and Susan said, we have the foundation in the US. We invested in the US. We are committed to invest in the US. There is really no change to our strategy. We are already committed. Maybe, Said, you can mention a few words about our commitment to Ohio also state, and we got some interest.

Speaker #1: There is really no change to our strategy. We're already committed. Plus, maybe Said, you can mention a few words about our commitment to Ohio State, and we got some.

Said Darwazah: Yes. We have met with the development agencies in Ohio state. I was there a few months ago, I met with the governor of Ohio. They are very pleased with the amount of investment that we are making, both in manufacturing and R&D. We have committed that we will continue the expansion there. We received $50 million of incentives from the state of Ohio. That will be something like $5 million over 10 years. $5 million every year to up to $50 million. This is the first time we do this kind of, let's say PR and working with the states. I believe that Hikma, because it has such a big "Made in the USA" footprint, we have been invited actually to Washington. We have been invited to the White House.

Speaker #2: Yes, we have met with the development agencies in Ohio State. I was there a few months ago, and I met with the governor of Ohio.

Speaker #2: They are very pleased with the amount of investment that we are making, both in manufacturing and R&D. We have committed that we will continue the expansion there.

Speaker #2: So we received around $50 million in incentives from the state of Ohio. That will be something like $5 million per year over 10 years—so $5 million each year, up to $50 million total.

Speaker #2: So this is the first time we do this kind of, you know, let's say PR and work with the States. So I believe that Hikma, because it has such a big "Made in the USA" footprint, we have been invited, actually, to Washington.

Speaker #2: We have been invited to the White House. We, I think, work with the committees there regarding, you know, pharmaceuticals made in the USA.

Said Darwazah: I think we work with the committees there regarding pharmaceuticals made in the US. Our profile has really been significantly, let's say, more emphasis on that. Actually, I joke I was the first Jordanian to be allowed to have the Global Entry. I was given the Global Entry visa to the US. The ex-secretary of, what was her name? The one that is of security, Homeland Security. She actually came to Jordan personally to give me the big thing in Jordan. It is a way to show that Hikma's profile has been really much more now important than before. Obviously, also the very important news, Riad, was the case, Ramzi with us, the Amarin case, where rarely have you seen all the Supreme Court vote in the same way.

Speaker #2: So our profile has really been significantly, say, more emphasis on that. And actually, I joke I was the first Jordanian to be allowed to have the Global Entry, was given the Global Entry visa to the US.

Speaker #2: And the ex-Secretary of—what was her name—the one from Homeland Security, she actually came to Jordan personally to give me the big thing in Jordan.

Speaker #2: It's just, it's a way to show that HIKMA's profile has, you know, really been much more important now than before. And obviously, also, the very important news we had was the case here with us, the Ameren case.

Speaker #2: Very rarely have you seen the entire Supreme Court vote in the same way. So that was also a big win for us, and it was a big win for our reputation. But it was obviously a big win for the whole generic industry as well.

Said Darwazah: That was also a big win for us and a big win also was good for our reputation, was a big win obviously for the whole generic industry.

Speaker #1: In terms of the midterm guidance, we want to focus on the current year. We want to deliver on the current year and we want to keep investing in R&D and, you know, fixing the foundation in terms of our commercial capabilities.

Areb Kurdi: In terms of the midterm guidance, we want to focus on current year. We want to deliver on the current year, we want to keep investing in the R&D and fixing the foundation in terms of our commercial capabilities. No change this time.

Speaker #1: So no change.

Speaker #2: Again, the drivers for growth—it's very simple. We always say it's not rocket science. Having the manufacturing machine well established and having well-balanced lines, and we have worked very, very hard on that.

Said Darwazah: Again, the drivers for growth, it's very simple. We always say it's not rocket science. Having the manufacturing machine being well established and having well-balanced lines, we have worked very hard on that. We have given the supply chain. We said last year we had $90 million of products, slow-moving inventory, which we don't want to repeat at all. If we just do the normal, $40 million of those would have been profit. We want to make sure we don't have a repetition of that. Supply chain, as I said, we have been working internally and externally on improving that, we see big improvement, and that will be very helpful. Having the safety stocks will be very helpful.

Speaker #2: We have given, you know, the supply chain we said last year we had 90 million of products slow moving inventory, which we don't want to repeat at all if we just do the normal, you know, 40 million of those would have been profits.

Speaker #2: So we want to make sure we don't have a repetition of that. So, supply chain—as I said, we have been working internally and externally on improving that, and we see big improvement, and that will be very helpful.

Speaker #2: Having the safety stocks will be very helpful. In R&D, we are putting a lot of emphasis, a lot of effort there, both in terms of bringing in the right number of scientists and the right, you know, the right qualified scientists, which we have done. I believe we are very well there.

Said Darwazah: R&D, we are putting a lot of emphasis, a lot of effort there, both in terms of bringing in the right number of scientists and the right qualified scientists, which we have done. I believe we are very well there. Again, we will be seeing how fast the submissions will be accepted. All these things will be indicators of when and how fast the business will start growing fast again. Finally, is acquisitions. I think we have to be a bit more aggressive in acquisitions. In Europe, I think there are a lot of opportunities for company acquisitions. The US is still very difficult, but in Europe, there is a lot of opportunity for company acquisitions. In the US, we should be more focused on product acquisitions, especially for the specialty part of the business, the promotion. We have invested significantly in the promotion team.

Speaker #2: Again, we will be seeing how fast the submissions will be accepted. All these things will be indicators of how, you know, when and how fast the business will start growing fast again.

Speaker #2: And finally, acquisitions. I think we have to be a bit more aggressive in acquisitions. In Europe, I think there are a lot of opportunities for company acquisitions, and the US is still very difficult, but in Europe there is a lot of opportunity for company acquisitions.

Speaker #2: And in the USA, we should be more focused on product acquisitions too, especially for the specialty part of the business. For promotion, we have invested significantly in the promotion team.

Speaker #2: And, you know, Taizivan is just the first of those products already in use. We want to also enhance that with other products. So, these three things together will be, you know, will be the engines of growth.

Said Darwazah: TYZAVAN is just the first of those products that are ready to use. We want to also enhance that with other products. These three things together will be the engines of growth. That's for the US and the injectables. The MENA, we always underestimate the MENA. The team is doing simply superb there. I keep meeting people everywhere wherever I go in the MENA, I say, Oh, we're using this product of HIKMA. It's amazing. We're using that product. They have been launching products in almost every category. In oncology, we have become the number one oncology in the MENA, both in terms of the products we manufacture and the products that we're licensing. The profile of the company there is really fantastic. The MENA itself is growing very fast. Do you have any information on how fast the MENA is growing?

Speaker #2: That's for the US and the injectable. And the MENA—you know, we always underestimate the MENA. The team is doing simply superb there. I keep meeting people everywhere, wherever I go in the MENA.

Speaker #2: I say, oh, we're using this product of HIKMA. It's amazing. You know, we're using that product. They have been launching products in almost every category.

Speaker #2: And in oncology, we have become the number one oncology company in the MENA region, both in terms of the products we manufacture and the products that we're licensing in.

Speaker #2: So the profile of the company there is really fantastic, and the MENA itself is growing very fast. We have some information for us—the MENA is growing.

Speaker #2: The MENA region is growing very fast. Saudi Arabia is growing very fast. Algeria is growing very fast. Egypt is growing very fast. So we are very well positioned to, you know, capitalize on that and to continue to grow the MENA region.

Said Darwazah: The MENA is growing very fast. Saudi Arabia is growing very fast. Algeria is growing very fast. Egypt is growing very fast. We are very well positioned to capitalize on that and continue to grow the MENA. The Rx, as we said before, we believe the engine for growth obviously will be R&D, like epinephrine and products like that. Also the CMO, as you said, will be a major part of that.

Speaker #2: The RX, as we said before, we believe the engine for growth obviously will be R&D, like epinephrine and products like that. But also the CMO, as we said, will be a major part of that.

Speaker #1: Very good. And then we're going to go to the line before we take the second question.

Areb Kurdi: We're going to go to the line before we take the second question.

Speaker #3: Thanks. Yeah, Christian Lenny with Stifel. The first one would actually come back to an earlier question around guidance. So, to understand the weighting here: you talked about, on the revenue side, 2% to 4% for the full year. You're at 4% for this half, and talked about it being slightly second-half weighted.

Christian Glennie: Thanks. Yeah. Christian Glennie with Stifel. The first one would be actually come back to an earlier question around guidance. To understand the weighting here. You talked about on the revenue side, 2% to 4% full year. You were at 4% for this H1. You talked about it being slightly H2 weighted. Similarly on operating profit, you did $405 million in the H1. You talk about it being broadly equal weighted across the year. Yeah, you've maintained your guidance at the 2% to 4% on the top line, and you maintained your $720 to 770. What is it that kind of implies that you're tracking well ahead of that?

Speaker #3: And similarly on operating profit, you did $405 million in the first half. You talk about it being broadly equal-weighted across the year, but you've maintained your guidance at the 2 to 4 on the top line, and you've maintained your $720 to $770 million.

Speaker #3: So what is it that, you know, kind of implies that you're well ahead of those—you're tracking well ahead of that?

Speaker #3: So, is it a question of being prudent at this point, maybe in the context of what happened previously, or are there other things to be aware of, particularly in the second half?

Christian Glennie: Is it a question of being prudent at this point, maybe in the context of what happened previously, or is there something, other things to be aware of, particularly in the H2 of-

Speaker #2: I think we've been very clear that investment will continue—a lot of investment will continue. R&D investment in the second half will be higher.

Said Darwazah: I think we've been very clear that investment will continue. A lot of investment will continue. R&D investment in the H2 will be higher. Promotion investment in the MENA will be higher. We still have, as I said, a few more high-profile people that we need to add to the business. We feel that all these things, that we need to do this, and they will sort of weigh down. I think, again, the business is doing well. Things are moving in the right direction. That's why we feel fairly very strong to reiterate the guidance. As I said before, we also feel very strong that the injectable engine will start to grow starting next year, we hope, significantly.

Speaker #2: Promotion investment is higher. We still have, as I said, a few more high-profile people that we need to add to the business. We feel that all these things are necessary, and we need to do this, but they will sort of weigh down.

Speaker #2: I think, you know, again, the business is doing well. Things are moving in the right direction, and that's why we feel very strong in reiterating the guidance.

Speaker #2: As I said before, we also feel very strongly that the injectable engine will start to grow starting next year. We hope significantly.

Speaker #3: Thank you. And then the follow-up would be—so, touching on capital allocation, particularly 503B. You talked about divesting that last time we spoke. I think it sounded like there was quite a bit of interest.

Christian Glennie: Again, the follow-up would be sort of touch on capital allocation, particularly, 503B, you talked about divesting that. Last time we spoke, I think, it sounded like there was quite a bit of interest. There was some sort of tangible thing. Any update on that process? Then as it relates to what you just said around opportunities that may be in Europe, what sort of things might be incremental to your business in Europe, just so we have an idea of what sort of things you're looking at in Europe?

Speaker #3: There was some sort of tangible thing. Any update on that process? And then, as it relates to what you just said around opportunities that may be in Europe, what sort of things might be incremental to your business in Europe, just so we have an idea of what sort of things you're looking at?

Said Darwazah: In the past, we were only looking at. Let me, again, talk a little bit about more Europe. We have manufacturing in Portugal, and that's where we have been really investing the most, expanding continuously. We have manufacturing in Italy and Germany, which somehow we haven't been really investing in because we were always thinking that eventually we will be closing those down and moving things over. The reality is we are finding out that both those sites are extremely important for HIKMA. We had the full European team come visit us a little while ago. We sat with them for about a week. They're extremely excited. They feel that there's a lot more that we can do just by expanding manufacturing capacity, expanding our footprint.

Speaker #2: In the past, we only looked at—we were only looking at increasing the—let me again talk a little bit more about Europe. So, we have manufacturing; we have manufacturing in Portugal.

Speaker #2: And that's where we have been really investing the most, right? Expanding continuously. Then we have manufacturing in Italy and Germany, which, somehow, we haven't been really investing in because we were always thinking that eventually we will be closing those down and moving things over.

Speaker #2: The reality is, we are finding out that both those sites are extremely important for Hikma. We had the full European team come visit us a little while ago.

Speaker #2: We sat with them for about a week, and they're extremely excited. They feel that there's a lot more that we can do just by expanding manufacturing capacity, by expanding our footprint.

Speaker #2: So, we have taken decisions to go ahead and expand as fast as we can. In Germany and Italy, we will update the equipment, as the equipment is a bit older.

Said Darwazah: We have taken decisions to go ahead and expand as fast as we can in Germany and Italy, update the equipment. Some of the equipment is a bit older. Updating the equipment, expanding there. We feel that that by itself will help us grow significantly. We've also now said for the BD team and M&A team, don't just look for injectors. Just look for, could be ophthalmics, could be ointment, could be some other things that we can add to expand, because we feel Europe would be easier. You will not have the US in Europe. It's less there. We believe that because we don't have other production, it's easier to do these things. That's why we feel. As I said, in the US, it will be probably more of product acquisitions.

Speaker #2: So, updating the equipment, expanding there. And we feel that that by itself will help us grow significantly. We've also now said for the BD team and MA team, don't just look for injectables—let's look for, you know, could be ophthalmics, could be ointments, could be some other things that we can add to expand.

Speaker #2: Because we feel Europe would be easier. You know, you will not have the US, yeah, in Europe. It's less there. So we believe that we, and because we don't have other products, it's easier to do these things.

Speaker #2: That's why we feel. And as I said, in the US it will probably be more about product acquisitions. But also, there are opportunities for, you know, doing things like animal health or ophthalmics or whatever, also in the USA.

Said Darwazah: Also, there are opportunities for doing things like animal health or ophthalmics or whatever also in the US. Europe expansion will be a big driver of that. The demand is there. The profitability has been much, much better than we expected before. We see a lot of countries there adopt that it's not just prices that you want to look at. We look at prices, we look at quality, we look at history of delivery. All these things are coming into play. As I said, we are now the fourth largest company in injectables, and that's why we feel emboldened that maybe we should be not just in injectables in Europe, but to go into other opportunities there.

Speaker #2: So that is the—so Europe expansion will be a big driver of that. The demand is there. The profitability has been much, much better than we expected before.

Speaker #2: We see a lot of countries there adopt that. It's not just prices that you want to look at—we look at prices, we look at quality, we look at history of delivery; all these things are coming into play.

Speaker #2: So, as I said, we are now the fourth-largest company in injectables, and that's why we feel emboldened that maybe we should be not just in injectables in Europe, but also look into other opportunities there.

Speaker #1: Good. To add to Saeed's point, we're also expanding into different markets as well. We're expanding in France and Spain. Those are still new opportunities, but they have really good growth potential.

Areb Kurdi: To add to Said also point, we're also expanding in different markets as well. We're expanding in France and Spain. Those are still new opportunities, but they have really good growth.

Speaker #3: 503.

Speaker #1: 503B—we believed, when we started, that this was a good strategic fit. But we realized that this was a distraction for the rest of the team.

Said Darwazah: 503.

Areb Kurdi: 503B. When we started, we believed this was a good strategic fit, we realized that this was a distraction for the rest of the team, and it was really a small contributor. Actually, it was loss-making so far. We thought we want really the injectables team to focus. This was part of the priorities that Said had to review at the beginning of the year and look into what improvements we can make to the injectables process as a whole.

Speaker #1: And it was really a small contributor. Actually, it was loss-making so far. So we thought, we want really the injectables team to focus. This was part of the priorities that Saeed had to review at the beginning of the year and look into what improvements we can make to the injectables process as a whole.

Speaker #2: With compounding in the US, you really have two providers. You have the smaller pharmacies, and we have seen, actually, that the FDA has given them more authority to compound the peptides now, and so on.

Said Darwazah: The compounding in the US, you really have two providers. You have the smaller pharmacies, and we have seen, actually, the FDA has given them more authority to compound the peptides now and so on. You have the bigger companies. When we first started, the regulations were much less, or at least the FDA had not been very involved in regulating that market. Since we started, this happened, the timing, they have become much more active, and the FDA is still trying to figure out how they're regulating. You have seen a lot of warning letters go out. You have seen a lot of companies had to shut down or are not doing well. Really, the overall, let's say, big market of compounding hasn't really materialized. We figured that we would need to invest a lot of money. It would be very distracting.

Speaker #2: Then you have the bigger companies. When we first started, the regulations were much less, or at least the FDA had not been very involved in regulating that market.

Speaker #2: But since we started—not just, I mean, it just happened, the timing—they have become much more active, and the FDA is still trying to figure out how they're regulating.

Speaker #2: So you have seen a lot of warning letters go out. You have seen a lot of companies either have to shut down or not do well.

Speaker #2: And really, the overall, let's say, big market of compounding hasn't really materialized. So we figured that there would be—we would need to invest a lot of money; it would be very distracting.

Speaker #2: We thought we'd be better off concentrating on the businesses that we have, especially since we know that by investing more in our manufacturing capacities—and obviously, the Bedford plant will be very important.

Said Darwazah: We thought we'd be better off concentrating on the businesses that we have, especially since we know that by investing more in our manufacturing capacities and bringing in, obviously, the Bedford plant will be very important. That's why we sort of said, Let's give it up.

Speaker #2: So that's up.

Speaker #1: And in terms of execution, it’s according to the plan. We’re unwinding the business, and it’s up for sale. We see good interest as well.

Areb Kurdi: In terms of execution, it's according to the plan. We are unwinding the business. It's up for sale, and we see good interest as well in terms of selling the business to other parties.

Speaker #1: In terms of selling the business to other parties.

Speaker #3: I'm just going to go to the line now. I think we have at least one question there, so I'll hand over to the operator, and then we can come back to the room.

Guy Featherstone: We're just going to go to the line now. I think we have at least one question there. I'll hand over to the operator, and we can come back to the room.

Speaker #4: Thank you. To ask a question on the phone line, please signal by pressing star one on your telephone keypad. We'll pause for a moment to assemble the queue.

Operator: Thank you. To ask a question on the phone line, please signal by pressing star one on your telephone keypad. We'll pause for a moment to assemble the queue. You have a question from the line of Kane Slutzkin from Deutsche. Your line is open.

Speaker #4: You have a question from the line of Kane Slutskin in from Deutsche. Your line is open.

Speaker #3: Morning, guys. To be honest, most has been answered, but just a quick follow-up on the injectables second-half ramp. I'm just wondering how much of that is dependent on sort of TIRs and conversion versus improvement in the broader underlying injectables business.

Kane Slutzkin: Morning, guys. To be honest, most has been answered. Just a quick follow-up on the injectable H2 ramp. I'm just wondering how much of that is dependent on sort of TYZAVAN conversion versus sort of improvement in the broader underlying injectables business. Just on the CMO side, how has that pipeline of sort of potential opportunities changed over the last maybe six months, particularly given growing interest in US manufacturing capacity? Thanks.

Speaker #3: And then just on the CMO side, you know, how has that pipeline of potential opportunities changed over the last maybe six months, particularly given the growing interest in US manufacturing capacity?

Speaker #3: Thanks.

Speaker #2: So again, as we said for Theros, there's been a lot of hospital buying groups adopting the product, taking it on instead of the older product.

Said Darwazah: Again, as we said for TYZAVAN, there's been a lot of hospital buying groups adopting the product, taking it on instead of the older product. There was still a significant amount of supply of the ready-to-use vancomycin that obviously the hospitals had to use. That's why we say we feel, first of all, we see the ramp-up is going up now month by month, but we are much more optimistic that towards the Q4 of this year, we will be seeing some big strides as the new hospitals, the new buying groups that have been converted will start using the TYZAVAN. Again, I think by October, November, we will have a much clearer idea of how fast and how big the product will be, but we obviously are extremely optimistic. We have invested significantly in the marketing and sales team there.

Speaker #2: There was still a significant amount of supply of the ready-to-use Vanco that, obviously, we had to—the hospitals had to—use. And that's why we say we feel, first of all, we see the ramp-up is going up now, month by month, but we are much more optimistic that towards the last quarter of this year, we will be seeing some big strides as the new hospitals, the new buying groups that have been converted, will start using the tires of Vanco.

Speaker #2: So, again, I think by October–November we will have a much clearer idea of how fast and how big the product will be. But we obviously are extremely optimistic; we have invested significantly in the marketing and sales team there.

Speaker #2: I think a year ago we were talking about three or four people. Now we're probably talking about over a dozen people. We have brought in a new head of marketing and promotion, and a head of commercial for that team.

Said Darwazah: I think a year ago, we were talking about three or four people. Now we're probably talking about over a dozen people working there. We have brought in a new head of marketing and promotion, head of commercial for that team. We've done a lot to make things go in the right direction. Obviously, we feel very comfortable that we will achieve that. In terms of CMO, again, we have CMO for the two businesses, for the sterile and for the Rx. The Rx, we said that there are a lot of demand. Actually, for both businesses, there's a lot of demand. It's really a question of our capacity and how fast we can be able to take in those. We do have, I think, significant CMO for the injectables scheduled for the H2 of this year.

Speaker #2: So we've done a lot to, you know, make things go in the right direction, and obviously we feel very comfortable that we will achieve that.

Speaker #2: In terms of CMO, again, we have CMO for the two businesses—for the sterile and for the RX. For RX, we said that there's a lot of, you know, there is a lot of demand.

Speaker #2: Actually, for both businesses, there's a lot of demand. So it's really a question of our capacity and how fast we can be able to take in those.

Speaker #2: But we do have, I think, significant CMO for the injectables scheduled for the second half of this year.

Speaker #1: Thank you.

Kane Slutzkin: Thank you.

Speaker #4: Your next question comes from the line of Miles Dixon from Pale Hunt. Your line is open.

Operator: Your next question comes from the line of Miles Dixon from Peel Hunt. Your line is open.

Speaker #3: Good morning. Thank you, and sorry to labor the point in relation to the guidance and the second half weighting, but there is a clear statement that says revenue and operating profit are weighted to the second half in the release.

Miles Dixon: Good morning. Thank you. Sorry to labor the point and return to the guidance and the H2 weighting. There is a clear statement that says revenue and operating profit are weighted to the H2 in the release. I'm hearing, certainly I thought I heard, Said, about the H2 additional cost in R&D. What is it that I'm missing about not even moving to the upper end of guidance on core operating profit for the full year? Thank you.

Speaker #3: But I'm hearing—certainly, I thought I heard Saeed—about the second-half additional cost in R&D. What is it that I'm missing about not even moving to the upper end of guidance on core operating profit for the full year?

Speaker #3: Thank you.

Speaker #5: So, I mean, I think it's best to take it segment by segment, to be honest. So, for the RX segment, we feel very comfortable that we should see a broadly similar performance in H2 versus H1.

Susan Ringdal: I think it's best to take it segment by segment, to be honest. For the Rx segment, we feel very comfortable that we should see a broadly similar performance in H2 versus H1. The branded is

Speaker #5: The branded is what we've said. Even if you go to the top end of the range for branded, that does mean that it is much lower in terms of revenue and operating profit in the second half of the year.

Susan Ringdal: is what we've said. Even if you go to the top end of the range for branded, that does mean that it is much lower in terms of revenue and operating profit in the H2 of the year. That's offset by the increase in revenue and operating profit in the injectables. On balance, it's going to be for the group, I guess, a slightly lower H2, primarily because of the branded business and the very strong weighting of operating profit for branded in H1 versus H2.

Speaker #5: And then that's offset by the increase in revenue and operating profit in the injectables. So, on balance, it is, you know, it is, you know, it's going to be, for the group, I guess, a slightly lower second half, primarily because of the branded business and the very strong weighting of operating profit for branded in H1 versus H2.

Speaker #2: Also, let's bear in mind, on the MENA and injectable, on MENA and branded – you know, the situation in MENA is unstable, and there's a war going on there.

Areb Kurdi: let's bear in mind.

Miles Dixon: Thank you.

Areb Kurdi: On the MENA and Branded, the situation in MENA is unstable, and there's a war going on there. We prefer to be cautious as well on our projections throughout the H2.

Speaker #2: So, we prefer to be cautious as well on our projections throughout the H2.

Speaker #3: Understood. Thank you.

Miles Dixon: Understood. Thank you.

Speaker #4: As a reminder, if you wish to ask a question on the phones, please press star one. There are no further questions on the conference line.

Operator: As a reminder, if you wish to ask a question on the phones, please press star one. There are no further questions on the conference line. I want to hand back over to the Hikma team.

Speaker #4: I want to hand back over to the HIKMA team.

Speaker #1: Thanks, James.

Areb Kurdi: James?

Speaker #3: Thanks, James and Bart. Maybe just to follow on to your comment there, which would be—I noted the comment about being cautious on H2 because of the situation in the MENA region, but so far it sounds like, at least for Hikma's business, it hasn't actually been a bad thing.

James Gordon: Thanks. James from Barclays. Maybe just to follow on to your comment there, which would be, I noted the comment about being cautious on H2 because of the situation in the MENA region. So far it sounds like, at least for Hikma's business, it hasn't actually been a bad thing because actually there's been some extra sales and less spending. What is it that could be bad for Hikma's business as a result of this situation in H2?

Speaker #3: Because actually, there's been some extra sales and less spending. So, what is it that could be bad for HIKMA's business as a result of this situation in the second half?

Areb Kurdi: We said that there was usually when there is uncertainty, there's a lot of stockpiling. Stockpiling means that it will take time for it to be used. The stockpiling has been made, clearly that kind of sales will not happen in H2, and then you need to reduce the stockpiles. That. There's always the issue of currency stability, there's always the issue of supply chain disruption.

Speaker #2: You said that there was a lot of—you know, usually when there is uncertainty, there's a lot of stockpiling. So, stockpiling means that it will take time for it to be used.

Speaker #2: So, the stockpiling has been made, so clearly that kind of sales will not happen in the second half. And then you need to reduce and use the stockpile.

Speaker #2: So, there's always the issue of currency stability. There's always the issue of supply chain disruption. It's, you know, again—yeah, really, uncertainty. The uncertainty, you know, it's—it's tough to plan.

Said Darwazah: It's uncertain.

Areb Kurdi: Yeah.

Said Darwazah: Really, uncertainty.

Areb Kurdi: The uncertainty. It's tough to plan for that.

Speaker #2: Tough to plan for that.

Said Darwazah: We've been in this region for decades, and I think we're really well-positioned compared to all our competitors to capture any opportunities that, and we've seen this in H1.

Speaker #1: But we've been in this region for decades, and I think we really are well-positioned compared to all our competitors to capture any opportunities that arise.

Speaker #1: And we've seen this in H1, so.

Speaker #2: Yeah, I really think that the big issue is the stockpiling, first. Governments were buying a lot of stock.

Areb Kurdi: Yeah. I really think that the big issue is the stockpiling first. Governments were buying a lot of.

Said Darwazah: bear in mind that we're going to also spend more in H2 for the future growth as well. That's the balance. Yeah.

Speaker #1: Plus, you know, bear in mind that we're also going to spend more in H2 for future growth as well. So that's the balance.

Speaker #3: But then, can you quantify the stockpiling a bit so that we can try and model that properly?

James Gordon: can you quantify the stockpiling a bit so that we can try and model that properly?

Speaker #2: As I said in the beginning, we saw stockpiling at the start of the war in Q1, but we saw this normalize towards the end of H1.

Areb Kurdi: As I said in the beginning, we saw a stockpiling at the beginning of the war in Q1, but we saw this normalized towards the end of H1. I wouldn't really put so much weight on the stockpiling, but our tender business is always H1-weighted, and the historical trend of our sales are always H1-weighted.

Speaker #2: So I wouldn't really put so much weight on the stockpiling, but our tender business is always H1 weighted, and the historical trend of our sales is always H1 weighted.

Speaker #1: Good. I mean, it could do better, of course. Obviously, we would like it to do better.

Said Darwazah: It could. It could do better, of course. Obviously, we would like it to do better.

Speaker #6: Thank you. Sam from Citi, and I have maybe two follow-up questions. One is a small follow-up point on the compounding. Can you communicate to us as to when this process you're looking to wrap up?

[Analyst] (Citi): Thank you. Sam from Citi, I have maybe two follow-up questions. One is a small follow-up point on the compounding business. Is there a timeline that you could communicate to us as to when this process you're looking to wrap up? In relation to that, I think previously the guidance for other was to break even. Now with the compounding business being unwound, are we looking at better than break even for the year? That's the first question. The second question is, in terms of buyback, you have made significant progress. Would you rule out further buyback this year, or do you need any further board authorization if you want to continue for a new program? Thank you.

Speaker #6: And in relation to that, I think previously the guidance for Other was to break even. And now with, you know, the compounding business being unwound, are we looking at better than break even for the year?

Speaker #6: So that's the first question. And then the second question is: in terms of buyback, you have made significant progress. Would you rule out further buybacks this year, or would you need any further board authorization if you wanted to continue with a new program?

Speaker #6: Thank you.

Speaker #2: The buyback is almost, it's almost finished. The buyback is almost—I think there's very little, probably $20 million or something like that left.

Said Darwazah: The buyback is almost finished. I think there's very little, probably $20 million or something like that left. $230 million have been, so the buyback is almost done. I think so far we've acquired about 11 million shares in the buyback.

Speaker #2: So, £230 million have been. So the buyback is almost done. I think so far we've acquired about 11 million shares in the buyback.

Areb Kurdi: Close. Close to 11.

Speaker #1: So yeah.

Speaker #2: Twelve, eleven. So, it's almost done. So, I think for this year that, you know, that's that. Obviously, the issue of the buyback—every two years, there is a revision.

Said Darwazah: Close to 11. It's almost done. I think for this year, that's that. Obviously, the issue of the buyback every two years, there is a revision. We take a look at that and then see. We'll take that when it comes. The compounding, we are in discussions for somebody to take it over. It should be fairly soon.

Speaker #2: We take a look at that and see, but we'll take that when it comes. The compounding, we are in discussions for somebody to take it over.

Speaker #2: It should be fairly soon.

Speaker #1: It should be soon. We've classified this as held for sale in the financials, which means, you know, we expect it to be sold within 12 months.

Areb Kurdi: It should be soon. We've classified this as held for sale in the financials, which means we expect it to be sold within 12 months, but we expect this to be much sooner.

Speaker #1: But we expect this to be much sooner.

Said Darwazah: Keep in mind, it was always put along the others when it came to sales. It wasn't put under anything else.

Speaker #2: We've never—I mean, it was always put along with the others when it came to sales. It wasn't put under anything else. And...

Areb Kurdi: On the others, you're right. I think we'll make, but I wouldn't allocate so much profit, but we'll make profit on the other side.

Speaker #1: On the others, you're right. I think we will slightly make, but I wouldn't allocate so much profit, but we'll make profit in the others.

Chris Richardson: Thank you. Chris Richardson from Jefferies. Just a quick one again on the branded margin. As you mentioned, there is quite a material fall-off in the H2, and even though there was a similar H1 weighting at the top line in 2025, the margin stayed relatively even. How should we think about mid-teens as an exit rate into 2027 if financials sort of S&M or Sales and marketing expenses are staying relatively consistent, H2 versus H1. How is that falloff happening, and how should we think about it progressing into the midterm?

Speaker #3: Thank you. Chris Richardson from Jefferies. Just a quick one again on the branded margin. As you mentioned, there is quite a material falloff in the second half.

Speaker #3: And even though there was a similar H1 weighting at the top line in 2025, the margins stayed relatively sort of even. How should we think about sort of mid-teens as an exit rate into 2027 if financials sort of S&M or sales and marketing expenses are saying relatively consistent H2 versus H1?

Speaker #3: How is that falloff happening, and how should we think about it progressing into the midterm?

Speaker #2: Yeah. Margins for the branded, as we continue to adopt more advanced products, the margins are better. But keep in mind that most of those products are under-licensed.

Said Darwazah: Yeah. Margins for the Branded, as we continue to adopt more advanced products, the margins are better, but keep in mind that most of those products are under license, and so you have to split. I think the margins we've achieved this year, we are at what? Almost 30%. They're quite high. Clearly, we would like them to stay there. Do I think there's a scope for improving? I don't think so, because, as I said, the more products that you license, the margins will be around that. The business is growing, and it's growing very nicely. I believe that for the next few years, it will continue to outperform and will continue to do extremely well.

Speaker #2: And so you have to split the. So I think, I think the, I mean, the margins we've achieved this year, we are at what, almost 30, you know, they're quite high.

Speaker #2: And it would be—I mean, clearly we would like them to stay there. Do I think there's scope for improving? I don't think so.

Speaker #2: Because, as I said, the more products that you license, you know, the margins will be around that. But the business is growing, and it's growing very nicely.

Speaker #2: So I believe that, you know, for the next few years, it will continue to outperform and will continue to do extremely well.

Speaker #6: So, a mid- to high single-digit top-line growth rate, with mid-20s margin for that business, is sustainable.

Susan Ringdal: A mid to high single-digit top-line growth rate with mid-20s margin for that business is sustainable.

Speaker #2: Yeah.

Said Darwazah: Yeah.

Speaker #3: Dana from J.P. Morgan, thanks for checking the follow-ups. First follow-up is just on price erosion. Just if you could comment on what level of price erosion you saw in the Injectables business and in the RX business in the first half.

Zain Ebrahim: Zain from J.P. Morgan. Thanks for taking the follow-ups. First follow-up is just on price erosion. If you could comment on what level of price erosion you saw in the Injectables business and in the Rx business in H1, and how we should expect that to develop going forward.

Speaker #3: And how should we expect that to develop going forward?

Speaker #2: For the injectables, I think it was relatively yeah, it was relatively I think the I think the FDA is being a lot tougher. They are really ramping up their inspections and they are sort of enforcing new regulations and new requirements that is forcing everybody to be level headed when it comes to pricing.

Said Darwazah: For the Injectables, I think the FDA is being a lot tougher. They are really ramping up their inspections, and they are sort of enforcing new regulations and new requirements that is forcing everybody to be level-headed when it comes to pricing. We haven't seen significant price erosion. I think for us, it's a question of ramping up our production capabilities. As I said, the demand is there. For the last few months, we really missed out on the opportunities, the shortage, and so on, because we didn't have. By doing that, the safety stocks will help us tremendously because they open opportunity, and it will open up the opportunity for us to do more CMO. Again, there is a lot of demand to do CMO in the United States, obviously, but also in Portugal, there's demand.

Speaker #2: So we haven't seen significant price erosion. I think for us, it's a question of ramping up our production capabilities. As I said, the demand is there.

Speaker #2: And we really, for the last few months, we really missed out on the opportunities—the shortage and so on—because we didn't have. So by doing that, you know, the safety stocks will help us tremendously because they open opportunity.

Speaker #2: And it will open up the opportunity for us to do more CMO. Again, there is a lot of demand to do CMO, obviously in the United States, but also in Portugal there's demand.

Speaker #2: So buy free, you know, by increasing capacity, it will help us. For the RX, the oral part of the RX, I think everybody's suffering.

Said Darwazah: By increasing capacity, it will help us. For the oral part of the Rx, I think everybody's suffering. There is still erosion. Yeah.

Speaker #2: There is, you know, there is still, you know, erosion.

Speaker #6: It's probably mid-single digits, which is what we usually expect.

Susan Ringdal: It's probably mid-single digits, which is what we usually expect.

Speaker #2: But we are pushing; our sales are becoming more and more inhalation, nasals, and so on, which are suffering much less than the solid dosage.

Said Darwazah: Our sales are becoming more and more inhalation, nasals, and so on, which are suffering much less than the solid dosage.

Speaker #3: Makes sense. And then the other question was a follow-up on CMO. So you said that, obviously, RX—I think there's going to be quite a significant contribution next year from the contract.

Zain Ebrahim: Makes sense. The other question was a follow-up on CMO. You said that for CRx, I think there's going to be quite a significant contribution next year from the contract that you have, which sounds like is ramping up well. How should we think about injectables CMO next year, given that you had the headwind from losing one of the big contracts at the end of last year. Now you have that capacity available, and you mentioned the strong demand. Could we see you potentially backfill some of that capacity as early as next year, or it might take a bit longer, depending on tech transfer times?

Speaker #3: So you have, which sounds like, is ramping up well. But how should we think about Injectables CMO next year, given that you had the headwind from losing one of the big contracts at the end of last year?

Speaker #3: And now you have that capacity available. You mentioned the strong demand—could we see you potentially backfill some of that capacity as early as next year, or might it take a bit longer depending on tech transfer times?

Speaker #2: I think we'll be seeing some increase in CMO next year, but obviously, the major increase will come when we have the Bedford plant operation, which will be in 2028.

Said Darwazah: I think we'll be seeing some increase in CMO next year, but obviously, the major increase will come when we have the Bedford plant operation, which will be in 2028.

Speaker #3: Thank you.

Zain Ebrahim: Thank you.

Speaker #1: One last question.

Guy Featherstone: One last question.

Said Darwazah: Yeah. Go for it.

Speaker #3: Chris, with Steve. Thanks for the follow-up. Maybe just check in on that large RX CMO contract— in terms of the status of that product, if you can say— and also a bit more sense for the 2027 potential tailwind or benefit from it. If you can articulate that a little bit more, that would be helpful.

Chris Miller: Hey, Chris Miller with Stifel. Thanks for the follow-up. Maybe just check in on that large Rx CMO contract in terms of the status of that product, if you can say, and also a bit more sense for the 2027 potential tailwind or benefit from it, if you can articulate that a little bit more, that'd be helpful.

Speaker #6: So, things are on track. We have done a lot of work in terms of the preparation for 2026 and, as a result, we've generated good service revenues for that contract.

Susan Ringdal: The things are on track. We have done a lot of work in terms of the preparation in 2026, and as a result, we've generated good service revenues for that contract, and that meant that we, as expected, we're seeing a step-up from 2025 in terms of the contribution from that contract. We do expect that in 2027, we'll have a full year of commercial production from that contract. Yeah, I would say it's going well.

Speaker #6: And that, you know, meant that we, as expected, we're seeing a step up from 2025 in terms of the contribution from that contract. We do expect that in 2027, we'll have a full year of commercial production from that contract.

Speaker #6: So yeah, I would say it's going well.

Areb Kurdi: I'd like to come to the others. Again, sorry to your question, Chris. We guided towards a break even, and we still expect it to break even. The 503B was really a small contributor there.

Speaker #2: I'd like to come to the others again. Sorry, to your question: we guided towards break-even and we still expect it to break even.

Speaker #2: The 503B was really a small, small contributor to that.

Speaker #1: Okay. Thank you very much.

Guy Featherstone: Okay. Thank you very much.

Speaker #2: Thank you. Thank you, everybody.

Said Darwazah: Thank you. Thank you, everybody.

Areb Kurdi: Thank you.