Hikma Pharmaceuticals is considering the future of its Generics business as its Eatontown facility in New Jersey continues to be dogged by compliance issues.

The group has opted to halt commercial production of generic drugs at Eatontown facility in the US until mid-January while it gets to grips with compliance issues raised by the Food & Drug Administration (FDA).

"We will continue to supply our customers to the best of our ability through existing inventory and from our FDA approved manufacturing facilities in the Middle East and North Africa region," the company said.

The group now expects the Generics division to deliver revenue of around $105m and a loss of around $15m, compared to our previous guidance of break-even. This includes around $5m of non-recurring costs related to remediation and restructuring. The group is reviewing this business and is considering all strategic options.

Things are going a lot better elsewhere in the group, with the Branded division performing well and the Injectables business performing ahead of expectations.

The group continues to expect around 20% Branded revenue growth for the full year. Excluding adverse currency movements, which are likely to have a small negative impact on margins, Hikma expects Branded gross margin and adjusted operating margin to be broadly in line with 2011.

The strong showing by the global Injectables business has been driven by new product launches, increased tender sales, better portfolio management and increased demand owing to continuing product shortages in the US market, Hikma said.

Over the full year, Hikma now expects to exceed its previous guidance, with revenue of around $460m and adjusted earnings before interest and tax (EBIT) margin above 22%.

"We are committed to bringing our Eatontown facility back into full compliance as quickly as possible. More broadly, we are continuing to benefit from the strength of our diversified business model - our Branded business is performing well and our Injectables business is exceeding our expectations," said Said Darwazah, Chief Executive Officer of Hikma.

"We are pleased to maintain our guidance for 2012 of around 20% group revenue growth," the statement added.

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