HIKMA PHARMACEUTICALS (HIK) SHARES: 2025 PERFORMANCE IN UK, KEY DRIVERS, MILESTONES AND RISKS —'26 OUTLOOK

How did Hikma Pharmaceuticals (HIK) perform in 2025?

Hikma Pharmaceuticals (LSE: HIK), a FTSE 250-listed multinational generics and branded pharmaceutical company, witnessed a dynamic share performance in 2025, influenced by a mix of macroeconomic pressures, strong operational results, and strategic highlights. The company, which operates across three main segments—Injectables, Generics, and Branded—navigated 2025 with a renewed focus on margin improvement and portfolio expansion.

Stock market performance overview

Hikma’s share price began 2025 at approximately 1,650p and closed the year near 1,880p, representing a 14% annual increase. This modest upward trend contrasted with broader market volatility. The FTSE 250 Index, to which Hikma belongs, posted more subdued returns amid ongoing interest rate concerns and global geopolitical uncertainty.

Strong interim results drive investor confidence

One of the key turning points for HIK shares was its robust interim results in August 2025. The company recorded a 9% increase in group revenue, driven by a significant recovery in the Injectables division, which posted double-digit growth. Operating profit rose by 11% year-on-year. Management cited strong North American demand and improved cost control as major contributors to the results.

The EBITDA margin lifted to 26.5%, up from 24.1% in 2024. Investors responded positively, and shares climbed by 7% in August alone. The results also prompted several broker upgrades, with Barclays and Jefferies raising their target prices to over 2,000p, citing improved earnings visibility and a healthy balance sheet.

Recovery in US generics market

A notable theme in 2025 was the recovery in Hikma’s Generics business in the United States. After multiple years of pricing pressure, the segment returned to growth due to product launches including a high-demand asthma inhaler and a biosimilar launch. The improvement in gross margins due to operational efficiencies at its Columbus, Ohio facility proved instrumental in boosting segment profitability.

The rebound not only helped offset Branded segment softness in MENA markets—which faced local currency pressures—but also restored investor confidence in Hikma’s long-term strategy in the US generics sphere.

Dividend hike reflects operational strength

Hikma increased its full-year dividend by 5%, offering a yield of 2.8% by year-end. The dividend hike was perceived as a signal of management’s confidence in sustainable earnings growth. This supported share price resilience in Q4 despite a general pullback in pharma stocks due to sector rotation.

Analyst sentiment in 2025

By December 2025, several analysts maintained a “Buy” or “Outperform” rating on HIK, noting the defensiveness of its Injectables portfolio and favourable demographic trends supporting long-term pharmaceutical demand. The consensus price target settled around 1,950p, suggesting further upside into early 2026.

Main factors supporting Hikma’s growth in 2025

Hikma Pharmaceuticals achieved a commendable turnaround in 2025, supported by operational improvements, regulatory tailwinds, and portfolio diversification. While some macro challenges persisted, several internal and external drivers propelled the company’s growth trajectory.

Strong performance of Injectables

The Injectables division was the standout contributor again in 2025, with revenue increasing by over 12% year-on-year. The business benefited from demand spikes in antibiotics and anaesthetics, particularly in the US and Europe. Amid ongoing global supply chain issues, Hikma’s vertical integration in sterile injectable manufacturing offered it a significant competitive advantage.

Additionally, the company rolled out 14 new injectable products across existing markets, strengthening its portfolio and improving plant utilisation rates across its UK, Portugal, and US sites.

Strategic product launches in Generics

New product introductions within the Generics division marked a turning point for Hikma’s US business. Products such as generic Flovent (a steroid inhaler) and a biosimilar for cancer treatment secured valuable market share. These launches were not only accretive in terms of revenue but also restored confidence in Hikma’s R&D pipeline.

Furthermore, cost rationalisations at the Columbus manufacturing site contributed to improved gross margins. Overheads were reduced by 6% compared to 2024 levels due to restructuring and automation initiatives implemented in late 2024.

Expansion in Branded pharmaceuticals

Hikma’s Branded segment, concentrated predominantly in MENA (Middle East and North Africa) markets, faced currency-related headwinds, especially in Egypt and Sudan. However, overall revenues were stable, and the company managed to introduce 34 new branded products in the region, including treatments for chronic heart and gastrointestinal conditions.

Strategic partnerships with regional distributors also enhanced branding and market penetration, particularly in Gulf states.

Improved financial health and capital allocation

In 2025, Hikma’s net debt-to-EBITDA ratio decreased to 0.9x, down from 1.2x in 2024, highlighting improved cash generation. Free cash flow was deployed towards dividend payments, modest share repurchases, and a bolstered R&D budget.

The robust balance sheet and conservative financial management allowed Hikma to pursue bolt-on acquisitions, including the late-year purchase of a small oncology-focused biotech in Germany to enhance its cancer treatment pipeline.

Regulatory tailwinds

2025 saw easing of regulatory timelines in the US Food and Drug Administration (FDA), allowing Hikma to accelerate product approvals. Additionally, UK and EU regulatory bodies provided faster-than-usual turnaround times on certain drug classes, helping speed-to-market—especially for antibiotics and sterile injectables.

These trends benefited Hikma’s competitive positioning, allowing it to strengthen its portfolio while many peers faced delays or operational disruptions.

What to watch for in 2026: Risks and prospects

As we enter 2026, investors and market analysts will be closely monitoring how Hikma Pharmaceuticals manages an evolving set of challenges and opportunities. While 2025 laid a solid foundation, several variables may dictate the company’s direction over the coming year.

Continued pricing pressures in Generics

Despite the rebound, the US generics market remains price-sensitive and increasingly competitive. Hikma will need to maintain its momentum via innovative formulations and agile pricing strategies. Margin compression is still a risk, particularly if peers undercut prices in crowded therapeutic areas.

Moreover, while Hikma achieved key launches in 2025, the sustainability of their market positions depends on competitive responses and any changes to insurance reimbursement dynamics in the US.

Currency fluctuations in MENA markets

Hikma’s exposure to emerging markets through its Branded business adds an element of currency risk. With ongoing instability in several North African and Middle Eastern economies, local devaluations could weigh on reported revenue and operating margins.

Forward-looking currency hedging and localisation strategies will be key in managing this volatility. Investors should also monitor inflation trends and fiscal policy changes across key MENA economies that could impact product pricing and consumer behaviour.

Regulatory uncertainties

Although 2025 enjoyed regulatory pragmatism, this could change in 2026, especially if there's policy tightening under a new US administration or changing health policy dynamics in the UK and EU. Drug pricing reforms, FDA scrutiny on overseas manufacturing, or new compliance requirements could lead to cost increases or product delays.

Hikma’s diversified global footprint cushions some of this risk, but reliance on a few high-margin products makes the company vulnerable to any single regulatory shock.

R&D pipeline and competition

Future success depends heavily on the strength of Hikma’s R&D strategy. While 2025 saw some successful launches, the pipeline for 2026 appears less assured. Any delays in clinical trials or failed submissions may hurt sentiment, especially if competitors accelerate their own entries into overlapping markets like oncology and respiratory care.

That said, Hikma’s increasing collaboration with biotech firms and a larger allocation to drug development suggest the company is aware of this and is actively refocusing resources.

Opportunities for strategic M&A

There is growing anticipation that Hikma may pursue mid-sized acquisitions in 2026, especially in specialty generics and novel delivery systems. With a strong balance sheet and a history of disciplined acquisition strategy, Hikma could enhance its competitive edge and geographic reach.

Investors should watch for any such announcements, particularly in Q2 and Q3 of 2026, when management is expected to outline its updated corporate strategy.

Market sentiment and valuation

Hikma trades at a forward P/E ratio slightly below the sector average, suggesting valuation upside if 2026 earnings upgrades materialise. Broker sentiment remains generally constructive, though tempered by market-wide concerns over growth plateauing in the sector.

Trading volumes remain stable, and institutional ownership remains high, indicating confidence in the company’s strategic direction. However, any signs of earnings weakness or pipeline stagnation could shift sentiment quickly.

In short, while there are tangible growth opportunities in injectables and biosimilars, execution risk remains a key theme into 2026.