As of March 24, international drug manufacturer Hikma Pharmaceuticals will appear on the London Stock Exchange’s FTSE 100. The Jordan-based company’s market capitalization has recently grown to nearly £4.9 billion, allowing it to displace Tullow Oil on the index. Having already gained spots on the FTSE 250 and NASDAQ Dubai, Hikma now stands alongside a number of other FTSE 100 global pharmaceuticals firms, including GlaxoSmithKline, Shire, and AstraZeneca.
Samih Darwazah founded Hikma in 1978 in Amman, Jordan. With the acquisition of pharmaceuticals businesses in the United States and Portugal in the 1990s, the company expanded beyond the Middle East-North Africa (MENA) region. The drug-maker has since grown into one of the leading generic drug manufacturers in the world. Most recently, Hikma bought Bedford Laboratories from Boehringer Ingelheim (a German firm) for approximately £225 million. The company now maintains a commanding presence worldwide, with over 7,000 employees and 27 manufacturing plants located in over four dozen countries.
Although Hikma is listed with pharmaceutical industry heavy-hitters on the FTSE 100, the drug-maker does not necessarily compete directly with them. Companies like AstraZeneca and GalxoSmithKline follow a high-risk/high-return route that relies upon developing brand new drugs at the cutting-edge of modern medical technology—an expensive and time-consuming process. Hikma, on the other hand, specializes in cheaply producing and distributing out-of-patent drugs. This approach offers lower margins, but very solid ones. Coupled with the company’s decentralized management structure, this business model has allowed Hikma to rapidly expand into new and emerging markets around the globe.
In recent years, large pharma companies have been steadily purchasing injectable generics manufacturers. Hikma, in fact, is now one of the last independent companies in this field. Given its cash-reserves, recent forays into the biosimilars market, and its well-established infrastructure in the MENA region, the company is an attractive potential acquisition. While officials with the company haven’t indicated any plans to sell in the near future, Hikma clearly has a bright and profitable future ahead of it.