In 2015, drugmaker Hikma invested over $80m (€71m) into its global manufacturing network in order to help bring its injectables sector back to growth, and for the first six months of 2016 the firm has continued to spend.
“Capital expenditures was $55m in H1 2016, up from $37m [on the same period 2015],” said CFO Khalid Nabilsi during a conference call to discuss results last week.
Over half of this was invested in the US, he said, “maintaining and expanding our injectable and non-injectable manufacturing facilities,” while in Europe the firm is expanding its injectable manufacturing capacity for lyophilised and oncology products.
“We also made investments to maintain our facilities across MENA including Jordan, Saudi Arabia, Egypt and Sudan,” he continued, adding the firm’s CapEx is likely to be around $150m for the full year.
CEO Said Darwazah gave some more focus on the call:
“We look to build new capabilities including delivery systems such as pre-filled syringes and complementary products like opthalmics. And we'll be looking for new markets where we can leverage our portfolio.”
Ben Venue Labs acquisition
Hikma stripped the assets from the regulatory-problematic problematic Ben Venue injectables facility in Ohio, acquired as part of its $300m Bedford Labs purchase in 2014.
Manufacturing equipment was transferred to injectable facilities in Cherry Hill, New Jersey, a site in Germany, and a facility in Portugal – the subject of a now closed-out 2014 US Food and Drug Administration warning letter – which saw the addition of nine lyophilisers.
“Our broad product portfolio and large manufacturing capacity across Cherry Hill, Portugal and Germany allow us to be one of the largest volume suppliers in the market,” said Darwazah.
With its intent to grow its network and a general lack of capacity for sterile injectables manufacturing in North America and Europe, Hikma was asked whether it would be looking to operate production space as a third party manufacturer.
The firm is obliged to make products for clients of Roxane Laboratories which it acquired for $2.6bn from Boehringer Ingelheim in July 2015, and while Nabilsi said these would be honoured, he added there would be further opportunity to contract manufacture from the site in Columbus, Ohio.
“We are taking a look at what agreements we do have and new contract manufacturing coming through the plants. But we are also optimizing our portfolio there as well to have additional capacity for contract manufacturing, so it doesn’t have a negative impact on the business moving forward.”