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Hikma Searches For New CEO As Olafsson Resigns

Said Darwazah Steps In For Now, As Company Looks To Identify A New Leader

Executive Summary

Hikma is looking for a new CEO after announcing that chief executive Siggi Olafsson will be leaving the company “to pursue other opportunities” on 24 June. In the meantime, executive chairman and former CEO Said Darwazah will take on his leadership responsibilities.

Hikma has begun searching for a new chief executive in the wake of announcing that current CEO Siggi Olafsson has resigned and will be leaving the company “to pursue other opportunities” on 24 June.

Olafsson’s next role is not yet clear, but Hikma confirmed that “Siggi will remain available to the group until he departs on 24 June 2022.” Following his resignation, the company indicated, “Hikma’s board has initiated an externally facilitated process to identify a new CEO.”

In the meantime, executive chairman and former CEO Said Darwazah will “assume all CEO responsibilities, enabling Hikma to continue delivering its strategy.”

“Said will continue to work closely with the executive committee, including Hikma’s three divisional presidents, benefiting from their significant experience and strong management teams,” the company elaborated.

Former Teva and Actavis generics chief Olafsson has led Hikma since 2018. (Also see "Olafsson appointed Hikma chief" - Generics Bulletin, 23 Feb, 2018.) Praising Olafsson for his tenure as CEO, Darwazah said that “on behalf of Hikma’s board and the entire group, I would like to thank Siggi for his leadership over the past four years.”

“Together with the executive committee, he has worked tirelessly to drive strategic momentum across all three businesses, especially during the challenging days of the pandemic,” Darwazah commented. “Hikma is on a strong footing and well positioned for future growth, and we wish Siggi well for the future”.

Meanwhile, Olafsson said it had been “a privilege to work for Hikma, and I am proud of what the entire team has achieved during my tenure. I would like to thank the board for their confidence in me throughout the past four years.”

“I would also like to thank my colleagues around the world for their exceptional hard work and commitment. I believe that Hikma has an exciting future and I look forward to seeing the business go from strength to strength.”

News ‘A Surprise’; Follows Recent Cut In Generics Guidance

In a 24 May note, Jefferies acknowledged that news of Olafsson’s resignation “comes as a surprise to us.”

It follows an announcement by Hikma at the start of May that the firm was significantly reducing its annual forecasts for its generics segment this year, following a delay to a key product (see sidebar).

This had followed fairly healthy forecasts for the overall Hikma business – including also its injectables and branded divisions – a few days earlier. (Also see "Hikma Outlines Injectables Growth Amid Slow Start For Generics" - Generics Bulletin, 3 May, 2022.)

Notwithstanding the cut to its generics guidance for 2022, Hikma has in recent years enjoyed a period of healthy growth. Not only had the firm recently claimed second place in the US injectables market by volume – overtaking rival Fresenius Kabi (Also see "Hikma Overtakes Fresenius In US Injectables" - Generics Bulletin, 2 Mar, 2022.) – but it has also been capitalizing on recent launches in non-injectable generics such as its rivals to Advair Diskus (fluticasone/salmeterol) and Vascepa (icosapent ethyl) in the US. (Also see "Hikma Still Sees Value In Generic Advair Despite Teva’s US Approval" - Generics Bulletin, 20 Jan, 2022.)

While the impact of Olafsson’s departure on Hikma and its strategic direction remains to be seen, the change in leadership comes at a time of renewed pricing pressures for generics, particularly in the US. (Also see "Hikma Warns Of Renewed Pricing Pressure On US Generics" - Generics Bulletin, 3 Mar, 2022.) (Also see "Generics Industry Braces For New Wave Of Price Pressure" - Generics Bulletin, 25 Apr, 2022.)

Nevertheless, the Hikma CEO had recently told Generics Bulletin that the company was prepared to face these pressures, emphasizing a focus on profitability over top-line growth. (Also see "Hikma Is Prepared For Tougher Pricing Environment In 2022" - Generics Bulletin, 10 Mar, 2022.)

Olafsson had also earlier this year outlined Hikma’s appetite for more major deals, following the recent completion of its acquisition of Custopharm in the US (Also see "Hikma’s Injectables Business Expands As It Completes Custopharm Acquisition" - Generics Bulletin, 22 Apr, 2022.) along with other partnerships that would allow the firm to take its first steps into the US biosimilars arena. (Also see "Hikma Has An Appetite For More Deals As It Builds On Acquisitions" - Generics Bulletin, 10 Mar, 2022.)

 

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