Hikma Pharmaceuticals Plc (>> Hikma Pharmaceuticals) is in dispute with the Food and Drug Administration over plans to launch a generic copy of GlaxoSmithKline's (>> GlaxoSmithKline) popular lung drug Advair in the U.S, the drugmaker said on Thursday, when trimming 2017 revenue guidance for its generics business for a third time.
The dispute between the Jordan-based firm, its partner Vectura (>> Vectura Group PLC) and the U.S FDA delays any eventual approval of the generic version of the drug.
Shares of Hikma were down 5.5 percent at market open, while Vectura shares were down about 10 percent.
Hikma, which makes and markets branded and non-branded generic and injectable drugs, said it expected revenue of around $600 million and a core operating margin in the low single-digits from its generics business.
In August it had lowered its generics revenue guidance by $50 million to about $620 million citing higher pricing pressures in the industry, having slashed it to $670 million from an initial $800 million last November.
The company, that has been hit by higher price erosion levels than the rest of the industry, has been re-negotiating its contracts with suppliers and third-party vendors to cut costs to try to boost profitability.
"We expect these market conditions to persist in 2018 and are actively pursuing new commercial opportunities and focussing on the execution of our pipeline to help offset continuing price erosion across the industry," it said in a statement.
The company, which cut its full-year guidance in May to the range of $2 billion-$2.1 billion from $2.2 billion, said in August that it expected 2017 revenue to be at the lower end of the range at $2 billion.
Hikma reiterated its 2017 revenue expectations on Thursday.
Earlier this month, Israeli-based Teva Pharmaceutical (>> Teva Pharmaceutical Industries Limited), the world's biggest generics drugmaker, said it would miss 2017 profit forecasts citing falling prices of generics in the U.S. market and weakening sales of its multiple sclerosis drug.
Hikma's lower guidance in May followed a decision by U.S. regulators not to approve its generic version of GlaxoSmithKline Plc's blockbuster lung drug Advair, citing "major" issues with the application.
Hikma said it expected the dispute process with the FDA to be completed in the first quarter of 2018.
(Reporting by Justin George Varghese in Bengaluru and Ben Hirschler in London; editing by Jason Neely and Keith Weir)