Good morning everyone. I'm Guy Featherstone, Investor Relations.

Before we start, I'd 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 annual report.

Thank you for joining this Q&A meeting for Hikma's 2025 full year results. Our pre-recorded presentation is available on our website and this will be a Q&A session.

We're joined today by Said Darwazah, CEO; Mazen Darwazah, Executive Vice Chairman and Deputy CEO; Khalid Nabilsi, Deputy CEO North America and Europe; Hafrún Friðriksdóttir, President US and Global Head of R&D. We're also joined by John Kafer, who heads up the US Injectables Commercial business; and we have Areb Kurdi, recently appointed acting CFO, and Susan Ringdal, Investor Relations, also in the room.

With that, I will hand over to Said.

Thank you very much, and good morning everybody, and to my old friends, hello again. The decision for me to take over as CEO again was not really a very easy decision.

Giving up the beach and the sun and the good life was difficult, but I really felt very strongly compelled to do this. Okay.

I remember before we IPO'd, we were discussing the ideas of IPOing and not IPOing and my father saying, "My worry is that one day the team will lose sight of the long term and start looking at short term and short-term wins. This is the only thing that I'm worried about."

Frankly, in many ways, this is what happened. I think the company had sort of started looking at short-term wins and fixation on margins of the Injectables and so on, and really lost track.

That's why I felt very, very strongly about coming back again. As you know also, I decided to give up the chair position to concentrate 100% for the next 2 years on the CEO role.

I want also to remind you that last time when I came in, we had a similar situation with the Rx business. The Generics business was also doing not very well when I had to step in back again, and for a period of a year or so, everybody was on us saying, "Get rid of this division.

It's weighing you down. Why are you keeping it?"

We said we will do what's required. We set reasonable targets of $100 to $130 in EBIT, and we said we'll fix it.

Here we are a few years later. We're looking at that business and it has margins of close to 20% and EBIT of $200 $200 million or so.

We've done this before, and we feel that we know exactly what needs to be done. It really is not a complicated formula.

It's a simple formula. You need to do the right investments, you need to get the right people, the right talent, and take quick decisions.

As I've said this morning, my focus is very clear. Number one, we want stability.

We want these 2 years where people can relax and focus on what is required for them rather than worry who's going to come in and what's going to happen. We're reassuring our people, our stakeholders, our investors.

Hikma is a very, very strong company, and we have a slide that shows the CAGR of the last 5-year growth. This company has consistently delivered growth and quite good growth.

Also, I'd like to remind you all that we have EBITDA margins of 25% while many of our competitors are striving to get to 22%. Second thing is agility.

We want to implement a structure of quick decision-making and to allow people across the board to take these decisions. We don't want the decision-making to be centralized with one or a few people or the executive committee.

Rather, we need to empower people across the board to take decisions. I've always said companies that empower their youngsters, their under-40 crowd, are the ones that will be here tomorrow.

Those that do not will disappear. We'll be focusing on empowering everybody across the business so that we take these decisions.

Investment, we have to accelerate investment. We have to take the investments that we need to do.

One of the first things we've done is we've taken the R&D budget out of the segments. The segment heads cannot play with R&D budget to achieve their targets.

It's now a corporate decision. We have a budget for it, which is an aggressive budget.

We have spent last year building the team. As you remember, we acquired a great team in Croatia.

Hafrún joined the company what, 2 years ago now, and Hafrún has a long, long track record in R&D and she is directly in charge of the R&D team. The other things we need to do is hire the right people.

Again, John took over as commercial head of North America or US Injectables and immediately said, "We need to hire so many people. What are you doing?

We need to do this." We said, "John, go ahead and do it."

He's already hired so many people and added to the team. We also hired supply chain.

We have now a fantastic supply chain team in place that will be working to make sure that we don't have bottlenecks across the group. We are still looking to hire some more people like head of CMO.

We are interviewing now. We want to hire somebody that has a lot of experience in CMO because we feel very strongly that Hikma is well primed to be a major CMO supplier.

Finally, what I started by saying, the fear of my father when we went IPO'd, long-term growth, focus on the long term, and that's what we are doing now. We are focused on the long term.

We are doing the right investments. We are adding, as we said, the R&D budget is much higher than it was before.

I think we're targeting 5% to 6% now to spend on R&D, hiring the right people, giving the plant managers the decision to buy the right equipment when they need it, not waiting for central engineering to come before they can buy that. All these changes that we are taking, all these changes we are implementing, I think will be excellent for the future.

Then I think we have to look at the structure that we are saying. Why this new structure?

Some people have said it looks too complex. In my opinion, for me at least and for the team, it's a very simple structure.

The MENA team is a fantastic team, strong team that has been doing an excellent job for the last 40 years. Hikma this year was number one company in MENA among all companies.

This is a big deal, and it's the MENA team that has delivered this. Mazen and his team have been doing this.

It was a no-brainer that the Injectables in the MENA report to them instead of being a distraction for the whole team. Then Europe and, let's say, North America or USA, they share many plants and they share the products.

Although doing business in Europe is different, but it's the same products and the same manufacturing teams. Khalid has been with us for quite some time now and he has shown to be doing a great job, he understands this business, and we believe that it was time for him to step up and take a strong P&L position.

I am very comfortable that he will do a great job. Hafrún, since she's joined the company, has just wowed us all.

She has done such an incredible job with Rx, such an incredible job with the R&D team and hiring the right people and getting the right things in place, and at some point, we will be sharing a clear R&D strategy for everybody. We are more than comfortable that with the help of John and his team and the Rx team that has already proven to be an extremely effective team, we are very confident that this is the right way to go.

We believe it's an extremely good company. We're in a very good position.

We have a strong track record, a very strong track record of growth. We will be investing heavily in the next 2 years.

Moving forward, we will go back to much stronger growth than what we have shown, although what we have done is still quite good, we believe that we will do much better than that.

Thank you. Thanks.

It's James Gordon from Barclays. Maybe first question just on the organizational structure you mentioned, and I do follow the logic about having people in each geography running the geography, but then at least your reporting, I believe, is still Injectables, Rx, and Branded.

Might you actually just change the company and make it by the three geographies rather than the three types of division? Because ultimately who is ultimately responsible for Injectables now?

Because it seems like lots of people have got responsibilities, is the first question, maybe before I break them up.

We said that for this year and maybe for the foreseeable future, we will continue to report the Injectable results because we didn't want to say, why are you running away from that? Reality from a management point of view, when you look at Europe and the USA, it's 90% of the Injectable business.

As I said, it is very different from the MENA Injectables. The MENA Injectables, there's a lot of products that are in-licensed and brought up from outside, while the US is much more focused, the Europe, on manufacturing.

Khalid, Hafrún obviously, but ultimately Khalid is in charge of the US and Europe and will be in charge, and of course myself, I will be working very, very closely with them. I think this gives us opportunity to really focus on the business rather than, I think just forget the tail end, which is the MENA Injectables, and, as I said, I'm very comfortable that the MENA team will do a much better job than before.

The bulk of the business now, there is a clear focus on it, and we will be reporting geographically as well as segmentally for the foreseeable future.

Thank you. Maybe just the second question would be, what is the outlook now for Injectables as in what's going to make it grow faster, and is the idea that now you've reset the margin to the level of this year, but you'd have a similar growth rate on the top line as you were previously hoping for?

As you said, the budget for the R&D is much bigger than it was the year before, actually if R&D growth was similar to the years before, then the results will be much better. We said no, we have to do this, we have to take this decision now, we have to invest.

Again, it's investing. You have to invest in the right people, and as I said, we have hired many, many people and there's still more to come, the R&D team, and we will be sharing more about the R&D moving forward.

We believe that Hikma is extremely well positioned for CMO business, and we are in the process of recruiting a head of CMO in addition to the CMO team we have. All these things will be working together to achieve, let we say, growth in the mid term to long term for the Injectables business.

James, just on the outlook for the Injectable business. We know that this is not something that we would like to be growing.

We have challenges in '25, and this is something that we know that, and '26. There are different reasons for this.

It's as I said in my presentation, is reduced CMO. One of our main customers want to do a domestic manufacturing in the US, we have a reduced contribution from that.

This is something that we cannot offer till we have Xellia up and running in 2028. We are less optimistic on, let's say, the biosimilar that we have, although it's a very small part of our business, and the liraglutide, and one of the main product launches has been pushed.

Of course, the going forward is we are going to return to very good growth for Injectable on top line and in terms of the EBIT. Any company, any business goes into challenges.

'25, '26 was a challenging year. I think from here, from 20 '27, we are going to see a different outlook for the Injectable business as we used to see in the past.

Just some examples. Of course, Tyzavan is an important product for us.

That will drive some of the growth that we achieve this year, but we expect that to do even better in 2027, so that will be an important growth driver. Some of the products that we expected to launch this year pushed to next year, so that will be again another growth driver for '27.

We've got, of course, continued expansion in Europe. That's been an important growth driver for us.

That will continue. MENA has been also a good business.

We signed six new biosimilars in MENA. There are a lot of opportunities to grow, but, I think as Khalid said, this is sort of a reset year.

Though the challenge is obviously as you rightly point out with the Injectables and what we're doing with it, but I also like to remind everybody this is a much bigger company than just the Injectables, right? We have three very strong divisions, two of them that are doing extremely well.

The MENA is growing at a very fast rate with very good margins. The Rx, as I said, has done much better than anybody anticipated 2 years ago.

If I told you we'd be doing 20% margins and doing this kind of EBITDA, people, why did we keep on pushing you to sell it? There will be a lot of focus, there will be a lot of investment, and we feel very, very strongly that in the medium to long term, this business will It is already, in my opinion, one of the best businesses.

If you compare our margins to our competitors yesterday who upgraded from 18% to 19%, we're way ahead of them. Again, other competitors saying we want to be at 22% EBITDA, we are at 25% EBITDA.

This is a very good business. It's driven by three engines, and as we said, the focus is on long-term growth and total profitability, growth in earnings per share rather than keep on focusing, and I think this is what really hurt us the last 2 years, the over-focus on the margins of the Injectables, where people start saying, "Don't sell anything less than 32, don't accept anything."

If I can get $300 million worth of orders at 28%, I shouldn't take them? Of course we need.

That's why the focus will be on top-line growth and bottom-line growth rather than margins.

If I may add a little bit about how we are going to grow the Injectables business moving forward. I don't know if you had the opportunity to listen to our presentation this morning, but I at least talked a lot about the ready-to-use platform.

Even though, of course, the first product is Tyzavan, as Susan mentioned, but we have multiple others in the pipeline. Those products, they will be launched probably in early '28, you will not see short-term growth because of those products.

We have a multiple products in the pipeline, and I talked about I think 15 ready-to-use products in our pipeline. Of course, moving forward, we will see the revenue and we will see the growth from this platform, which I'm very excited about.

Just to repeat Said, I think it's a really good business, so.

Let's take another question, please.

Zayn Ebrahim, J.P. Morgan.

Thanks for taking the questions. The first question would just be a follow-up on the previous answer in terms of what you described on the CMO challenges from one of your customers wanting to switch the manufacturing from Europe to the US.

How do you see that risk going forward for the rest of the Injectables CMO business? Just broadly, how do you see the outlook for CMO overall from here?

There's the small molecule contract in Rx contributing this year and ramping next year. Just to remind us how you're seeing that outlook.

The first thing we did, we looked at our plants in the USA, for instance, we looked at the Cherry Hill plant, and see so what were the bottlenecks, what was needed. Many times it's a small thing that you need to do to increase capacity.

Working on increasing capacity significantly at Cherry Hill, and that will help us with the CMO business as more and more companies want to manufacture in the USA. Of course, we'll talk about the Rx later CMO because they already have a lot of orders and business.

Then we acquired the Bedford site specifically for this, and it's a big site. It has a lot of equipment in it.

It needs to be re-engineered in a more modern way. We're working on that diligently.

Sometimes new lines take a bit long to get. You need to order them.

Takes a year and a half to 2 years for the lines to begin. After they come in, you have to install, qualify, and get FDA approval.

It's a bit of a long process, long-winded. That's why we're guiding to '28.

With most of the CMO, the big business, you get the order and expectation is you deliver 2 to 3 years down the road. They don't expect to deliver tomorrow because it's a process of moving products in and so on.

That's why we feel very strongly about hiring a head of CMO, somebody that has already strong experience, has good knowledge of the industry, and has good contacts with the companies that want to have CMO business. We're very confident in '28 and forward, for the Injectables, we'll have a very strong CMO business.

For now, we will be showing that the Rx already has very strong CMO business. Overall, it will become a quite significant part of our business, let's say, 3 years down the road.

Helpful. Second question is on R&D.

Increase to 5% to 6% of group sales. Are you now comfortable with that as a ratio in terms of thinking about that level going forward?

As

You ask me or you ask her? If you ask her, she says, "No, we need more."

If you ask me, it's enough.

When do we say payoff from those investments? Because I know you mentioned '28 for the ready-to-use,

but you started

some of the increase in R&D last year, just to

Of course we slightly increased the investment in R&D last year, but that was really a slight increase. We also reorganized the R&D organization, now we have a global R&D organization.

I also moved activity from US into Croatia, of course that is clearly helping significantly on the Injectable business. We also have a very strong team focusing on inhalations, semi-solid, and liquids in Columbus in Ohio, and then of course our team in Jordan is focusing on solid orals.

I strongly believe that we have the right team in place. Would I always like more money for R&D?

Yes, of course I would. Said is correct there, but I feel very confident with 5% to 6% of the revenue being spent on R&D.

I think that's just in line with what our competitors are doing,

so.

We are going to see these returns coming into the coming years. Some of it will come in '27, some of it will come in '28, '29 onwards.

Yeah. Yep.

Of course. R&D takes time, just so everyone knows that.

Thank you. Hi, Beatrice Fairbairn at Berenberg.

Thank you for taking my questions. You discussed the focus on long-term growth.

One of the targets out there is this kind of $5 billion 2030 revenue target. My question really was does this still stand, and would you be able to give some color in terms of what is needed to get there and how that looks like over the coming years?

Then just on your delay to sort of the timing of some of the product launches in Injectables, do you feel like the new timelines that you've got are realistic, and kind of how confident are you that you're going to be able to launch these products on time?

I take this first part about the $5 billion.

$5 billion. The $5 billion when we set the $5 billion target, we said that it was an aspirational target, but we felt that it was very achievable with the business plan that we had and our business model, which has been to do bolt-on acquisitions as a matter of course.

We still do feel comfortable that $5 billion is within reach.

It's very achievable, yes.

We definitely see an acceleration of growth after 2026. I think today it would require a bit of inorganic growth, but yeah, it is very much within reach.

A small inorganic growth, it's not like we are talking about a transformational, more of a product acquisition. We are very close to the aspirational target of $5 billion.

If you look into the three businesses, the Branded is delivering very good growth. If you look into in the past was 5%, 6%, today we are guiding more, 7% to 8%.

This is driving growth, high-value products that we are getting into the MENA region. If you look into the number of licensing deals that we've been signing over the past 5 years, it increased significantly, and now we are becoming more and more the partner of choice.

This is going to be a key driver. Rx is growing, the CMO business, we are going to see more contribution coming in '27, '28, '29.

This is as well going to drive the growth. Injectables, of course, with all these RTUs and the products that we are working on it's going to accelerate the growth for the Injectable business.

Remember, the Injectable business has a large portfolio, there will be always opportunities, there will always be shortages. Europe, we are seeing a very good growth, very great potential, especially that the market is lacking products.

We are being the,

I would say, most reliable hospital supplier in Europe now. All hospitals are coming to us, and governments coming to us saying, "We want this product."

The agility that we have in Europe, providing the products on time is differentiating us versus others, and this is why we've seen 23% growth this year in the Injectable in Europe. Same for MENA.

It's not just like the six biosimilar, we have many products that we are going to launch in MENA for biosimilar. This is going to be the growth driver, and we are very confident of our ability to continue growing the business.

As said, '25, '26 might look challenging for the business, but this is a business cycle, but from here we are going to continue growing.

The short answer is yes, the $5 billion is very achievable. We are extremely confident in our '26 guidance.

Yes, the Injectable launches that we'll be seeing in '28 and further will deliver the kind of growth that we needs to be done.

Thibault Boutherin from Morgan Stanley. Maybe just one question on Rx.

That one seems to go pretty well, and it looks like you have even some room in terms of margin. You've been investing even more than what you're actually investing for Injectables.

Can you discuss the different moving parts this year? The base business, I think that there might be some competition on certain products.

On the flip side, you have some service payment from your CMO partner, and are you expecting at some point to be able to update the market on who is that CMO, what is the product, and what are the economics behind that? Just a bit more visibility on the CMO because it's a huge moving part for Rx for sure.

This year the revenue from the CMO business will probably be around 10% of our business, but our target in 2030 is up to 20%, at least my target. We are not going to share the name of our customers, but we are though working with not only one big customer, but actually multiple.

Some of them you're talking about contracts which them have not been signed, but are in negotiation phase, and we will be signing within the next let's say few months. That's going very well.

You also asked about the base business. For example, a product like Advair has been doing very well last year, and we expect the same this year.

Fluticasone, we are the biggest volume driver in US for fluticasone as an example, or for nasals. That is a business which continues to do very well.

All our base business has been doing really well last year, and we haven't really seen any change at least for the first 2 months of the year, so. It's more stable than maybe most people believe it is, so.

Can I just remind people that we have John, who's the commercial head of Injectables on the line, and Mazen, deputy CEO for MENA, don't hesitate to address questions to them as well.

It's early for John, you should really ask him questions now because he woke up very early for you guys.

Thanks. Christian Glennie with Stifel.

Again, not to belabor the point, but on Injectables and the margin, just to be clear around, it's been quite a dramatic shift, right? From mid-30s to high-20s now.

Combination of things. One is you talk about extra investments needed.

Implication potentially maybe that you were under-invested before to some extent, the margin was sort of where it was, or is that fair? Then the second part is is there something more structural around the market from a sort of pricing and competition issue that means margin has that structure, travelers gone?

Okay. First one, as I said, clearly we said we're taking the R&D budgets out of the divisions and putting as a corporate.

Clearly indicating that at some point division heads were sort of reducing R&D expenditure to give higher margin. By taking that out and having it as a corporate with a fixed number that we agree on, I think there will be lower margins a little bit to start with, but we are very confident that with the investments that we are making in R&D, the new pipeline, the expansion in the manufacturing, and the CMO, that we will be achieving higher margins mid to long term.

Okay? The second question was

Structural or something in the market, because you describe things

There's always competition, there is always people coming in. You lose a few products.

We lost two or three products that were not lost, we have competition coming in, two or three products that were doing extremely well, and that's why when you have such a well-diversified portfolio and you have so many products, other products can pick up and the new launches can pick up. The market's always been competitive, it's always been, competition is coming in.

Do we feel that there's more competition? In some areas yes, in some areas no, but we're confident that with all the changes we're making, we are fine.

It's not structural change in the market. The pricing is around let's say if we exclude the two top products that we have, it's 4% or almost.

Low to mid single-digit price erosion that we've seen in this business, nothing is abnormal.

Maybe if I may add, I think over the last few years, then the supply from third party has increased significantly, and third party of course is not as profitable as if you're making the product internally. I think it has been going from 20% to 30% over the last few years, so that's of course affecting the profitability.

Also, there are different parts of the business which has higher profit than other parts. Of course, while you are building the business, Injectables business in MENA, which is less profitable than the business in US and in Europe, of course that will affect the overall Injectable profitability, and that business has clearly been growing as well.

Those are at least two two reasons in addition to

If you exclude the MENA margins, both for the Europe and the North America Injectable business, the margin is north of 30%.

Thanks. Maybe the natural follow-up is, I know you're probably reluctant to guide beyond kind of '26, but just to get a sense for that margin and is '27 to '28 the floor and then maybe that's similar until you really get into Xellia and then margins should improve or is this Again,

we're saying we're very comfortable that '28 and further margins improve. I think once we assess everything and we have the right plan in place, are we going to be giving

May I take this? In a way we'll be guided to '27, '28, and I said in my presentation this morning, you can assume this is for the coming few years.

It's not like if we have an opportunity that is sub-30, we are going to say no to it, we don't want to be strictly held on these margins because we are going to focus on growing the profits and the EPS rather than just focusing on the margin as Said mentioned. You can consider this '27 for '28 for the next 3 years.

What has changed, just repeating to what I said earlier this morning, from the November when we said the floor is 30% is literally increased investments in R&D. We are increasing $15 million this year versus last year in Injectable.

You look into the investments that we are having as Said mentioned, fitting in sales and marketing. The CMO, this is why we are going down 2 to 3 percentage points.

It's not something structural in the business, but it's more investing for the future.

Just going to jump to the line for a call quickly now, for a question.

Thank you. Thanks a lot.

Morning, guys. Could you just clarify I missed the last point on the higher R&D in Injectables, but could you just sort of clarify sort of lower guide, sort of those moving factors between higher R&D versus the lower CMO work, in terms of which has moved the needle more there?

I assume it's the R&D, but if you could just clarify that. Then just you're obviously spending some time doing the strategic review.

I'm just wondering at what point do you think you will be able to sort of reinstate a mid-term or new mid-term guide? Then just finally on the buyback, just I guess, why has it sort of taken so long to do it?

Could we see a more permanent feature going forward if shares sort of remain where they are? Thank you.

I think I can maybe take the R&D question if I could hear him correctly. I think it was asking about the spending for R&D.

The overall increase in the spending for R&D this year compared to last year is around $45 million year-over-year. I think that was your question, but I'm not really

Kane, could you just repeat the first question? Thanks.

Yeah. I was just wondering sort of in that lower guide, how much of it is sort of the lower CMO work you referred to versus R&D in terms of what's impacting the guide down?

The

Injectables margin guide, how much is CMO going versus

I think Kane, it's more evenly split across R&D, sales and marketing, and CMO. I would say those are the three the three biggest factors and they're of more or less the same magnitude.

The buyback, I agree with you, it's taking too long, but we have taken the decision to do the $250 million this year.

In terms of the medium-term guide, I think we'll get back to you on that. We know that it's important for the market.

We want to get it right, and so yeah, I think

we'll come back to you.

All right. Cool.

Thank you.

Julie Simmons, Panmure Liberum. Just on a more product-specific basis, wondering with Tyzavan, clearly you've just launched it.

It feels like the sort of momentum's pushed out a little bit to '27. Are you noticing anything from the first sales in the market there?

Hey,

good morning. This is John.

Maybe I can address that.

You're on mute, John.

No, I am not on mute.

We can hear you now.

Now we can hear you.

Great. Hey, good morning, everybody.

We are in active launch mode for Tyzavan. Let me just frame the market because this is important to understand because the RTU bag platform will follow a similar pattern.

Vancomycin is a widely used product within the US. There's about 41 million g of the product used in multiple forms, from a lyophilized powder to a frozen bag to obviously our ready-to-use bag.

What we are selling is a system and a process change within large hospital systems and large hospital groups that, by default, Tyzavan would become the vancomycin of choice. It is really more of a process change.

Now to put it in perspective, we have already converted 13% of the entire gram market with our existing vanco mycin ready-to-use bag, we have a platform. We will expand that.

Within that network, there's about 22,000 sites of care that use vancomycin within the US, all forms: long-term care, hospitals, and such. Our existing customer base on the existing bag product represents about 15% of those sites.

There's a very large universe of hospitals and health systems that have not used our historical bag, there's a large opportunity there. You have to think in terms of it as a process progression.

We're going to expand our existing base by expanding the usage of the product without restriction, and then we're also penetrating the customer bases that have not used our bag in the past. Yes, this is going to be a progression into the back half of the year, but the momentum that we're seeing right now is very active and very encouraging.

Thank you. Just following up on that from a sort of RTU perspective longer term, do you think once a site has switched over to one RTU, it makes easier to switching to another for a different product?

That's exactly why the way we're approaching this first one is extremely important. We want to make sure we have the processes in place.

Hospitals and groups, they have to reprogram electronic medical record systems, infusion pumps, SOPs, ordering patterns, storage platforms, because you're bringing in a new form. As we work with Tyzavan as the foundational product, we want to make sure we fully integrate it properly, and I do believe that that will help us going forward with the additional bags as they come to market.

Hey. Charlie Heywood, Bank of America.

First one's just in our models, would it be reasonable to assume that I guess at this stage, a 30% mid-term Injectable margin is off the table given focus on profitable growth? Then I'll get to the second one in a sec.

Yes. Okay.

Then

the second one is just on the mid-term guide, which obviously since giving it, we've seen two cuts to. First is, I guess talk me through the decision to issue the mid-term guide if there were some underlying concerns on the spending, the short-term focus to give that.

Then secondly, sort of how can you reassure us and the market that this is sort of the last of the big cuts and we're back to something profitable, we can be return to something growth from here?

Again, as I said before, it's not a complicated formula. You have the right people, you have the right equipment, you have the right facilities, you have the right R&D.

All of these things, when you invest properly, you take timely decisions to move the business forward. This is a formula for success, and we've had this formula for 40 years.

We sort of slowed down decision-making, it became too centralized, we were not investing properly in the right places, and now we're reversing that. That's why we feel very confident that as mid term, we will deliver what we're talking about.

This is why as well, '27 is going to be a year where we '27 is going to be as well a year that will see a growth, it's the bottom on the Injectable, and from here we are going to grow in top line and in bottom line. In addition to the other two businesses, they continue to grow as I said earlier.

Just a side one, if I may. You talked obviously heavy investment the next 2 years.

How confident are you that this is a 2-year journey of heavy investment and that won't spill into three or four as the investments start continuing?

The investment is it's not a short term. It will continue to be, but we'll start seeing the results of what we're doing now 2 years down the road and they further.

When we look at our 5-year CapEx, our 5-year R&D, all this, this will continue to grow.

May I just to add to what Said just mentioned. In terms of the R&D, it takes time to see results as Hafrún said.

In terms of sales and marketing, these are quick wins. You invest today, it's not going to take so much time till you get the returns, and this is what John is focusing on.

You will have these investments, and at the same time, give you an example on the supply chain. Having somebody now focusing on the global supply chain would reduce our inventory levels, will reduce the slow-moving items, which it was very big this year.

Failure to supply,

the immediate impact will be significant improvement to margins. This is why we are seeing that we are moving in the right direction, and I think the results of these will come in in the coming years.

We are confident about our medium-term outlook.

Hi, Christopher Richardson from Jefferies. A couple, if I may.

You lowered CMO expectations for the year as some customers require domestic production, which you said you can't offer. I was just wondering if there were any reasons for that.

It's as we said in Zellia, our Bedford acquisition is going to be up and running towards the 2028. It's the same machinery, the same lines.

It's replicate to what we have in Portugal. Now we couldn't offer because we don't have that facility up and running.

Once we have that facility up and running towards the end of '27, early '28, we'll be able to offer for

As I said, the Cherry Hill plant and the other plants, we looked at optimizing the capacity there, looking at the bottlenecks, bringing in the lines that are required to up the manufacturing capacity.

If I can add something about our Rx business because we are only talking about the Injectables, and as I mentioned, we have this huge, of course manufacturing site in Ohio both for solid orals, for nasals, for inhalations. That site has been getting a lot of attraction over the last year or so since all this discussion about domestic manufacturing started to happen in US.

There's a lot of interest in us in producing products for different clients. I think this is going to be a big opportunity for us moving forward both in Rx and also in Injectables business, so.

Many times clients come in, let's say, for the solid oral, then they feel very comfortable with you and they open up and move Injectables and other things for you.

Great. Thank you.

Just the guide cut in November was due to equipment delays. I was just wondering what the situation is now and what caused you to walk away from '27 and whether the timing for Bedford has changed at all.

No change to the guide that we had in 20 in late November. All what we said that we are going to start ramping up towards the end of '27 and the commercialization will start '28.

No change to our plans.

Great. Maybe just a quick final one, I was wondering if you could comment on the oral generics pipeline and the margins in US Rx, excluding any Xyrem impact.

Excluding, sorry?

The impact of

Xyrem.

Sodium oxybate, okay. Last year, sodium oxybate was dragging down our profitability.

The rest of the business was actually compensating for the low profit of that product. We managed to negotiate a better deal at least for this year and for next year, we will have slightly better profit of that product.

It will not be dragging down the overall profit for the Rx business. Is it helping this year?

It potentially will.

Wonderful. Thank you.

James?

Want

some more? I

can have one. Zayn Ebrahim, J.P.

Morgan. Thanks for taking the follow-up.

On CMO, you mentioned you're looking for a new head of CMO.

Yes.

Just the characteristics you're looking for in the head of CMO in terms of the kind of profile that you're looking at and when we could expect the appointment. Does this mark a potential shift to making CMO a fourth division that we sort of talked about in the past in terms of strategically?

Integrating the Rx and Injectables.

Historically, we used to do CMO as a fill-up, we thought this is extra capacity, let's get products to fill it up. Then when we were approached or we found a client to come in and use the Rx site, it was more of a long-term agreement.

Long-term agreements require dedicated facilities, they require dedicated lines, and sometimes dedicated teams, and it's a lot of investment to do that. It takes time to come in and This is what we want to do, not just bringing in short-term fixes.

To do that, you need somebody that has been doing that for a very long time, that knows which companies require CMO business. Also I think more importantly, when you do the contract, when you're looking at, let's say, 5 billion tablets or something, 0.5 cent per tablet extra gives you $50 million in profitability, having the right negotiation skills, the right contract skills, all these things.

This is what we're looking at now. We have this, but we think that getting a very senior person that has done this successfully is the right way to go.

As I said, we are interviewing. There are several people out there that are available with this kind of talent.

Makes sense.

Yes, could be a fourth division, very much so.

Just quickly on the CMO headwind for '26, was that one customer you lost that's gone from Europe to the US? I guess how was that conversation, and how are conversations with the remaining customers to ensure that won't happen with someone else before the '28?

It was one of our customers. It's not like they are shying away completely.

They still have business with us, but they decided to some of the manufacturing for their own benefits, they wanted to have it in the US. It's not like the business is going down.

To replace, it's going to take some time to get a new customer. We are confident of our ability to continue growing the CMO business.

It's a matter of time, but when we have the Xellia, of course, up and running, we will have much more clients, much more capacity to offer as well.

There's a lot of demand for US manufacturing. I think the Bedford acquisition and what we're doing now, although it's going to take a little time, but like I said, if you want to get a client that will work with you long term, anyway, it will take 2 years before you can move in the product.

Now is the right time to get the clients and get the orders in so you can put the processes in and do the submissions and all these things, the tech transfers and so on. By '28 and more, you'll be ready to launch.

The demand is there, and we are talking to a lot of companies.

What they are saying is that if we would have had capacity in US to take on those products in US, we could have probably potentially have kept that customer. We didn't have the capacity at that time, But now we are building that, moving forward we will.

If you remember as well, when we did this acquisition and we took the Bedford site on, it was because we were reasonably capacity-constrained in our existing facilities, and so we weren't really very actively selling CMO business at the moment because we don't have a lot of spare capacity for CMO without the Bedford site, so.

Thanks. Christian Glennie.

Thanks for the follow-up. Just maybe on Rx and just a couple ones there I think you've alluded to a couple of the things around the moving the margin to 20% just to clarify the step-up this year to 20, and is the 20 another kind of base for the business going forward, do you think?

Then just finally on nasal epinephrine, what's the update there? Obviously, it's been delayed, what's the expectation around that?

I think it had been seen as potentially quite a significant product for you, just an update there.

Maybe first on the margin. Is 20% the best we can do?

No, I think probably you will probably see some improvement moving forward as in '27, even '28 as well. I'm not going to give you any numbers, but I don't think that's necessarily the top of the pie.

With regards to epinephrine, as I think I talked about last time when we had this conversation, there was some requirements from FDA to run some additional study. That study is ongoing, and we are planning to submit in US in let's say after a few months now, and we did file the product in UK last year.

We will be filing in Europe as well, and we are actively discussing out-licensing the product in Europe. That's yeah, so that's the update.

Because we have been working so closely with FDA over the last year or so on the product, I strongly believe that the review time will potentially be shorter than maybe we thought in the beginning, so. It will be an exciting product for us.

Somebody ask Mazen a question about the MENA. He's bored.

Thank you. James from Barclays again.

Just when we're talking about margins and we're talking about Generic margin and Injectables margin.

Rx. Rx.

Rx, apologies. Then I've also heard effectively you're going to centralize R&D spend and then we could think of the divisions as being a bit ex-R&D.

You're going to think about all their ex-R&D performances. If we're rebuilding our models after today, is that how we should be thinking about Hikma now and are you going to start giving us then what the margins are for these three divisions without R&D and then the central R&D line?

What do we do with our models?

Eventually, eventually. This year we did not want to

Too much change.

Too much changes and

then

changing your model. Eventually, next year, you start seeing the margin without R&D.

With and without.

With and without.

A bridge this year and then we do our rebuild for next year. Thank you.

Mazen, I think one of the strengths for the business in the MENA in the past year has been all of the partnerships that we've signed. We had excellent momentum in terms of signing new partnerships.

Maybe you could just talk a bit about why Hikma seems to be the partner of choice in MENA.

You're on mute. Mazen, mute.

No, he's not. The sound is very low.

No, try again.

He is on mute.

Looks like his M.

Luckily, you didn't ask him many questions.

Okay. Next question till he comes back.

Can Mazen, can you answer via chat and Susan, you can read the remarks?

Sorry?

Closing remarks.

Again, first of all, it's good for me. I'm very happy to be back as CEO.

I'm very happy to give up the chair position to be able to do this. We have an extremely good team.

We work very, very well together. We have, I think, a very, very strong business.

As we said, if you look at the last 5-year CAGRs and the years before, you've seen how this business continues to grow. We will continue to grow it.

We are taking quick decisions. We are implementing a culture of quick decision-making.

I also talked about the younger people in the company. For instance, from now on, the executive committees and the leadership councils and so on, we will mix and match, not only be on seniority, we will be having more younger people join.

There is obviously something we didn't talk about, a lot of focus on AI and seeing how AI can be implemented to move the business forward. All in all, I feel very, very positive about this.

This is a strong company that has been growing for a very long time, has very solid foundation, has a strong leadership team and a lot of talent across the board, and I am very confident that we will be delivering the kind of growth that we expect from ourselves and our shareholders expect from us.

Thank you.

Thank you, everyone. Appreciate you joining us.

Thank you.

Thank you. Thanks, John.

Thank you, Mazen.

Thank you, John.