Good day, ladies and gentlemen, and welcome to Hikma Pharmaceuticals November 2026 Trading Update Conference Call. At this time, all participants are in listen-only mode. At the end, there will be a question-and-answer session through the phone lines, and instruction will follow at that time. I will now hand over to Guy Featherstone, Investor Relations. Please go ahead. Thank you, operator. Yes, I am Guy Featherstone, Director, Investor Relations. And on the call today, we have Said Darwazah, CEO, and Areb Kurdi, Acting CFO. We also have Susan Ringdal, EVP, Strategic Planning and Global Affairs. We 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 some opening remarks. Thank you. Thank you, Guy. Good morning, everyone. We reiterated the group guidance this morning, slightly narrowing the range given the stage of the year we are in, and I am very pleased we are delivering on what we committed to. The business is in very good shape. Branded continues to outperform and is having an extremely strong year. Hikma Rx is improving its profitability, and Injectables is on a steady footing and well-positioned for future growth as we focus on building key products and investing into the pipeline. We are maintaining group revenue guidance of 2%-4% growth and lowering our operating profit range to $740 million-$760 million, which we see as a real positive given the low end of the previous range was $720 million. When I returned to lead Hikma, I set out clear goals to bring stability to Hikma, to build a more agile company, to expand our portfolio, and invest in R&D for the long-term growth. We are delivering on all of these. Let me take each business in turn and then say a few words on the next phase. Branded. It has been an exceptionally strong year, and I am really proud of what the teams are delivering in this business. We have good demand across our markets, and we have continued to expand our portfolio, focusing on chronic therapeutic areas. I do not need to remind you that we are the largest pharmaceutical company in MENA, but this is very important to our ongoing success. Our scale, our local presence, and our focus on first-to-market and first generic launches drives our success. As a result, we now expect Branded revenue to grow by around 10% this year, up from 6%-8%, with a core operating margin of close to 27%, up from 25%, even after stepping up our sales and marketing investment in the second half. We have had good product mix this year, and that has been important for the margin. Over time, we see Branded as a high-quality business growing in the mid to high single digits, and we will keep investing in launches and local capabilities to sustain its growth. Injectables. In our Injectables business, we have been focusing on building our R&D capabilities and pipeline to maximize our broad product portfolio. We have also been streamlining our operations. To complement our in-house R&D, our business development team has signed multiple deals in the year to date, expanding our pipeline of complex products and new technologies. We have tweaked our growth expectations for this segment in today's update, but it's not a concern for us. In the U.S., demand for our base business and the gradual progress in Tyzavan are mostly offsetting the normal price erosion we're seeing from competition on some of our products. Crucially, the trend in Tyzavan sales is good, and the product is building momentum as we convert more customers. I am really pleased with how Europe and Canada are performing. Europe is an exciting opportunity for us, and we continue to build share and respond to critical shortages, which is offsetting the expected decline in contract manufacturing. MENA is also seeing good demand, and the underlying business is doing very well. But this has unfortunately been offset this year by the disruption from one of our suppliers and the subsequent failure to supply penalties. This should not take away from the excellent work our teams have been doing in growing the business. Looking to the full year guidance, we remain very confident with the core operating margin expectations, which is unchanged at 27%-28%. Hikma Rx. Again, we are having a good year with significant improvement in profitability as anticipated. We have been launching products, gradually growing CMO, and demand for sodium oxybate has remained strong. There is competition on parts of the base business, including generic ADVAIR, but the business has been offsetting that. We also had good news on our pipeline in September when the FDA accepted our filing for our epinephrine nasal spray, an important milestone for our nasal and respiratory portfolio. We have filed the product in multiple other markets too, and we will update you on the outcomes in 2027. Looking ahead, as we have said throughout the year, 2026 is an investment, transition, and stabilization year. We have deliberately stepped up our spending on R&D and sales and marketing. Because we are investing for the future growth of the group. This is the right decision. These investments are building our pipeline and strengthening our commercial capabilities, as they underpin our longer-term growth. We expect growth to build progressively as returns on our investment comes through in the coming years. To conclude, Hikma is a strong, well-diversified company with three attractive, diverse businesses, clear strategic priorities, and a long track record of delivery. We are focused on building a more agile Hikma, broadening our portfolio, and investing in R&D, and we are confident in delivering our 2026 guidance. Thank you. I will now hand over to the operator to open the floor for questions. Thank you. We will shortly begin the question-and-answer session. If you would like to ask a question, just press star followed by the number 1 on your telephone keypad. Please collect the question. We will pause for a moment to assemble the queue. Our first question comes from the line of Zain Ebrahim with J.P. Morgan. Zain, please go ahead. Hello. Zain Ebrahim, J.P. Morgan. Thanks for taking the questions. My first question is on the Branded business, where I think you said in the opening remarks that you expect mid-to-high single-digit growth from here, but you are delivering 10% growth this year. As you consolidate your share leadership in MENA and you add new launches in MENA, including semaglutide, I think, in Saudi Arabia, why would that business not continue to grow maybe at the upper level of the mid-to-high single-digit range that you are indicating? That is the first question. Second question is on Injectables and how we should think about the top-line development from here. I think you are going to be flat this year, but how should we think about Injectables in the coming years? What price erosion are you seeing at the moment, and what are the key drivers for growth from here? Is it mainly Tyzavan, or are there other launches that you would point to as well? For the branded, we said the growth for this year was how much? 10%? For the future, we said we will be looking at mid-teens long-term growth. No, no. Mid-single digit. I mean, mid-20s. 6%-8% top line, but margins of mid-20s. It has performed very well, but as we said, we are ramping up our R&D, we are ramping up our marketing and sales expenses. All these things, of course, are contributing to future growth, but are also helping us deliver this year. For the injectables, we are not guiding for 2027, but we are seeing, and I think you can see it in the IQVIA, we are seeing that Tyzavan is picking up the last few months rather very nicely, and we hope that this will continue in 2027 to help the Tyzavan story and to help the injectable story. Do you want to add anything? No. On the Injectables, as Said said, the TYZAVAN is performing well. It is slower than what we anticipated in the beginning, but we see a good momentum in the product growth. We converted the previous customers of the VANCO READY. Going forward, especially for 2027, we expect modest growth on the top and bottom line for the Injectables business. On the Branded, this year was more or less, I would say, exceptional in terms of the growth and the margins. Going forward also, we expect growth to be within the mid-single-digit parameters. The upper mid-single digits. Upper mid-single digits. On the margins, we expect it to be a bit north of 25%. Yeah, we are very happy with the MENA, with the Branded business. It is growing very, very nicely. We are growing much faster, much, much faster than the market itself. The teams are doing extremely well. As we said, we continue to keep an eye for the future, so we invest today to keep growing the future. As we have said, we have signed quite a large number of new products and new technologies that we will be launching in the future. We will push for stronger growth, of course. We will push for stronger growth. For now, this is the kind of visibility that we have. Very clear. Thanks very much. Thank you. Your next question comes from the line of Giang Nguyen with Citi. Giang, please go ahead. Hello. Good morning. Thanks for taking my questions. Giang Nguyen from Citi. I would also like to start with Branded, and maybe a slightly different angle on the margin piece. Are there any one-offs benefiting margins this year such that we end the year with such great margins? I know we talked about ramping up cost in R&D and marketing, et cetera, but what are the other moving parts that we should consider when we are thinking about margin in this segment in 2027? That was my first question. My second question is also on margin, but in Injectables. Can you talk about your level of confidence around the full margin range of 27%-28% for Injectables this year, despite lower top line now? Thank you. Yes, I'll start with the Injectables margins. As we said, 27%-28%, and we actually have to keep in mind that this year, because of the penalties that the MENA Injectables team suffered, because of the non-supply of one of our CMOs, the MENA margin is quite low. Actually, if you will look at just Europe and U.S.A. margins combined, they are over 30%. We are comfortable that this is something that next year, of course, we hope there will be no penalties in the MENA, and MENA margins will improve. We'll continue helping the overall Injectables margins to stay in this range. On the Branded segment, we saw really a nice strong growth this year. Remember, MENA is a mix of so many markets, and also the product mix has helped this year. I wouldn't say there was a particular one-off here, but it depends on the tenders, sometimes some oncology sales, some high-margin products. But we saw a strong product mix, strong market mix this year. We continue to investing also in the R&D and also in the sales and marketing, which will help the growth trajectory in the coming years. Thank you. Your next question comes from the line of Victor Floc'h with BNP Paribas. Victor, please go ahead. Then, maybe just one, a couple actually, on the Hikma Rx CMO contract. I appreciate the contribution will depend on demand for your partner's product, but could you help us understand where things stand? Has the product already been approved, and when might you be able to quantify the contribution, even without naming the partner? As a quick follow-up, as preparation revenues give way to commercial sales, should we expect the contract profit contribution to increase in 2027, and how do the margin compare between the two phases? Are there minimum volume commitments or capacity payments, or does it all depend on demand? Thank you very much. For the CMO, obviously, as we said for the Hikma Rx CMO, we are very excited about that business. We identified that we are looking at multiple partners in addition to the one large partner that we have. That business has started to come in. We expect it to continue, maybe a little bit slower 2027 than in original budget, but still, it will give good growth. We feel that obviously the years after that, it will continue to get traction and grow, thereby expanding our CMO business. We expect other, as we said, other customers to sign deals with us. So we are very optimistic about that business for the CMO. That is it. Perfect. Thank you very much. Thank you. Your next question comes from the line of Beatrice Fairbairn with Berenberg. Beatrice, please go ahead. Hi. Thanks for taking my questions. I had a couple, please. Just to clarify on an earlier remark on Tyzavan, can I check in on how the conversion of the Vanco Ready customers is progressing versus the 80% called out at H1? Then on Hikma Rx, you've noted improving profitability. I suppose, could you just break down the drivers of this and how sustainable you view this to be looking into 2027? Thank you. The Tyzavan, let's say in the beginning, we thought was the simple idea of removing the black box and continuing with the same product, but obviously we found out this is a totally new, different product. For the hospitals, it's a new product that they have to add to their formularies. So it's like you're introducing really a brand new product to the buyer groups and to the hospitals. So it's taken a little bit longer to get that product onto their formularies, but now most of them have it, or a big chunk of them have it, and we can see that on a monthly basis. You can see it on IQVIA, there are significant jumps in the sales of that product. So we remain very confident that it is a very good product, that it will continue to grow significantly in 2027 and beyond. For Rx? I can take this. Okay. On the Hikma Rx margin next year. As we said, sodium oxybate has been really showing really good momentum so far, but we always expected sodium oxybate and the generic ADVAIR to have competition. We also expected some offsets from the CMO business, which, as Said said previously, it depends on our partner's demand of this product. Going forward, expect Hikma Rx profitability within the range of this year. Your next question comes from the line of Kane Slutzkin with Deutsche Bank. Cain, please go ahead. Morning, guys. Could I just clarify a few things? I missed a couple points. On injectable growth, did you say you're planning for modest growth next year? Is that you're saying you're exiting this year with some momentum to return that division to growth? Then on branded, just to clarify there too, the step-up in the investment that you spoke about, has any of that shifted into 2027, or is it a continuous thing, or is it back-end or front-end loaded? Just to get a sense of is that playing a role in margins coming back, or is it more just top line going from 10% to back to normal? Thanks. Thank you. For the injectables, it's a continuation of where we are today. These are stabilization years of high investment in R&D. We are really ramping up the number of scientists that we have, the kind of investments that we're doing in R&D. At the same time, as we said, we have signed significant BD deals to help also the growth story. We also said that the MENA margins should recover next year, thereby helping the continued margin stay up in the upper 20s for the injectables moving forward. Europe, we're seeing also very, very good growth. All in all, obviously, we are looking at growth, but we are still saying it will continue to be modest growth for now. Anyway, we are not guiding till February. We will have a much better picture. We would not expect a hockey stick soon, but obviously, we are working towards getting there at some time. Let's go with modest growth for 2027. Zain, would you mind Sorry, Cain, would you mind just repeating the second question, please? Yeah. I was just wondering sort of the planned investment you were talking about in Branded, and you've done pretty well despite doing that on the margin side. I'm just wondering, is there a lot to come in 2027, or is it an ongoing kind of spend for now? Or I'm just trying to get a sense for is there any portion that's kind of shifted into the new year? Yeah. Again, we said this was an exceptional year. At the beginning of the year, we won a lot of governmental tenders that were quite high for oncology, good margins, and so on. Obviously, we hope to continue there. The investment for Branded will continue. We will continue to build factories to continue the localization of the business in different parts of the world. We still have some way to go in Saudi Arabia. We're looking at new markets like Iraq for potential investment there. So, there will be a continuous investment policy. But it is a business that is very comfortable. We see the growth. It's really the pipeline we have, the products that we have been launching. Most of them have been hitting the first in their category with good market shares. It's that shift we've been talking about from lower-end products and infectious disease products towards very high-end products and chronic diseases and going really upscale in the portfolio we have, in addition to oncology. I think we are the leaders of oncology in the MENA. At least in units, we definitely are. We're manufacturing locally in several markets. The localization and the investment in local markets is obviously a strategy that has been paying very well for us. Yeah. Maybe I could just add. Yeah. Yeah. I was just going to say, I think we feel very comfortable. Obviously, we're going to have a tougher comp this year given how well the business has done, but we feel very comfortable in the mid to high single-digit growth for the business. In the end, here it's going to be more the product mix that determines the margin, the split between private and tender, the split between our branded generics and the in-licensed products, depending on how the different countries are doing. There are a lot of moving parts. It's very difficult to say exactly where we will land next year, but we're very comfortable at the mid-20s, so 25%-26% range. All right. Great. Thank you. Again, if you would like to ask a question, just press star followed by the number 1 on your telephone keypad. Your next question comes from the line of Sebastien Jantet with Panmure Liberum. Sebastian, please go ahead. Good morning, and thanks for taking my questions. Two questions. Both on injectables. First of all, just wanted to understand if the change in the revenue guidance for injectables is entirely down to the slightly slower start for Tyzavan, or whether there is some other factors impacting that. The second one is just, I was wondering if you could give us a little bit more detail about the CMO issues you have had in the MENA region in injectables, and maybe quantify for us some of the penalties you have had to kind of wear on those. Yeah. As I explained a little while ago, in the beginning, we thought that it would be a simple process of saying just we remove the black box from the ready-to-use Vanco, and we would continue with that. Then obviously, we found out that this is a totally new product that had to be added to the formularies while we discontinued the Vanco Ready that we used to have. So, it was just a process of going through the buying groups, the hospitals, and getting the product on their formulary, and then getting them to start ordering. So, it took a little bit longer. We are talking about a few million dollars. We are not talking about major amounts of money. It was just a few million dollars, but it took a bit longer to get there. Now, at the ramp-up, we can see it, and we are very comfortable it will continue. So, it is mainly the tazobactam story for the injectables top line. On the Injectables, MENA Injectables partners, we mentioned this before. The majority of this failure to supply has come from one partner, which was Pharmathen, and it is around $15 million in terms of amounts, with some maybe lost sales as well. Okay. Thank you. Your next question comes from the line of Miles Dixon with Peel Hunt. Miles, please go ahead. Thank you. Good morning. Just one question, if I could, on the geopolitical environment in MENA. You had previously explicitly described how you were starting to see government requests and potential stocking orders. Has that now normalized, and what has it looked like over the last 12 months? What is the profile? Many thanks. In the MENA, we are moving ahead as we are, the same amount of stocks. Usually, I think we have three to four months stocking in the market. As we said earlier, governments in the region have contacted especially the local pharmaceutical companies, so they made sure that if we do not have the more finished stock, that we have raw material, and raw material is being delivered on time. We have not seen any serious disruptions. In terms of stockpiling, we have not overdone that. We will continue to maintain the regular normal averages. At the beginning of the war, we saw some pickup in the governmental orders, but we saw this also normalizing over the year. Net-net, the impact is really not material. Thank you. Again, if you would like to ask a question, just press star followed by the number one on your telephone keypad. Your next question comes from the line of Trang Nguyen with Citi. Trang, please go ahead. Hello, and thanks for letting me ask a follow-up question. Said, I think earlier you mentioned that our CMO 2027 would be a bit slower than initially budgeted. Maybe you can elaborate a little bit on what's driving this. Thank you. We prepared for the launch or for the manufacturing of this product, and we see nice revenue this year. Just to elaborate on this product depends on really the demand of our partner. We shall see a ramp-up hopefully next year in the demand, but it really all depends on the From a commercial manufacturing point of view, we're ready to manufacture, but we will depend on the demand from our partner. Yeah. I think we feel very comfortable in that gradual ramp-up in demand from our CMO partner. We've always said that we expected the CMO would broadly offset some of the competition that we expect on the base business, particularly sodium oxybate and ADVAIR. I would say things are very consistent still with that. But it's difficult to say how the timing will work in terms of when we will see an acceleration in competition on some of those bigger products and how soon our partners' demand for our partner's product will ramp up. All in all, we're expecting broadly the two to offset each other, but there could be a bit of a timing issue. Thank you both. There are no further questions on the conference line. I will now hand over to Hikma team for closing remarks. Thank you very much. Again, we are very happy with where we are, and we are very, very optimistic for the future. We believe that our R&D investment should significantly enhance our portfolio in the mid-future, while in the near future, the BD deals that we are signing will also help us continue the growth story. Hopefully, our supply chain, all the changes we have done in supply chain will give better results, so we will have less failure to supply and less slow-moving items. All of these things enhancing the profitability of the business. So, solid year, very happy with the investments that we are doing, with the people that we are adding. We continue to add high, experienced people to the team. So, we are extremely in a good place and happy where we are. Thank you very much, everybody, for joining us this morning.