Said Darwazah - Chairman & CEO Khalid Nabilsi - CFO Mike Raya - President & CEO, USA Brian Hoffmann - President, West-Ward Pharmaceuticals

Yulia Gerasimova - Goldman Sachs James Vane-Tempest - Jefferies Stephen McGarry - HSBC Global Research James Quigley - JPMorgan Jo Walton - Credit Suisse

Good morning, everybody. Thank you for being here. Today, in addition to myself and Khalid, we also have the U.S. team on the phone, so we can ask them -- if you want to ask them some questions later on, we can do that. Very happy to be here this morning to present our results for 2015 and to talk a little bit about moving forward. So 2015 was a very exciting year for us. We successfully executed our growth strategy across our core business segments. Bedford has been swiftly integrated into our global injectables business. We launched three products in 2015 and have already received one approval this year so far. We remain very confident that we can launch a steady stream of differentiated products over the next couple of years. We also received, I think, about five ANDA approvals for our Portuguese plant from our own submissions in the first two months of this year, so obviously the FDA is happy with what we're doing and is accelerating our approvals. The main highlight was our agreement to acquire Roxane, which we announced in July 2015. And as you all know, we have been working hard on this transaction, which we closed on February 29 of this year. In the MENA we acquired EUP in Egypt. This is a key growth market for us and allowing our strategy to continue to strengthen our position through bolt-on value-added acquisitions. We strengthened our balance sheet by raising $500 million in the bond market with our inaugural issue, and added a revolving credit line of $1.2 billion, helping us to refinance existing debt and providing considerable financial flexibility for the future. We started expanding our injectable facility in Portugal, increasing our scale and production capacity in support of our long-term focus on future growth for the Group. In 2015, we launched a total of 92 products and received 220 approvals across all our markets, enhancing our product portfolio with higher value and more differentiated products. As you can see, these strategic initiatives have rebalanced the Group. We have transformed the future growth profile of Hikma. I will give more detail on these strategic items shortly. However, we will now listen to Khalid go through the financial performance of the Company.

Thank you, Said. Good morning, everyone. Let me start by a quick review of our 2015 financial highlights. You can see that on constant currency, we have grown over the last year across our different financial metrics. However, clearly on reported basis, we have some tough comparators in this year. This year we had to content with some significant currency fluctuations, which had a meaningful negative impact on our business: around $75 million on Group revenue and $37 million impact on core operating profits. For example, movement in the Algerian dinar, which depreciated by 20% in 2015, had the greatest impact on our results. Overall, we had a solid performance in 2015 across our businesses. And, of course, we made significant strategic progress with the acquisition of Roxane, which will transform the prospects for the generic business in the coming years. Group revenue in 2015 was $1.4 billion, $49 million below 2014 when we had more than $100 million in doxycycline sales and 33% growth in our injectable business. Group core operating profit was $409 million, compared with $427 million in 2014. A strong performance in our branded and injectable businesses was offset by the expected decline in specific market opportunities in the U.S. generics. Core basic EPS was $1.437 per share, compared to $1.51 per share in 2014. The Board is recommending a full-year dividend of $0.32 per share, in line with the total dividend paid in 2014. Moving to the branded business, as you can see, the branded business delivered a very strong underlying performance in 2015. Revenue grew by 13% in constant currency, or 3% on a reported basis. This was a reflection of the excellent recovery we had in Algeria, and double-digit growth in Saudi and the other Gulf countries, Egypt and Morocco. In the Saudi and the other Gulf countries we are benefiting from actions we have implemented to strengthen our position in the market, enhancing our distribution channels and promotional activities. In Algeria, we have seen an excellent recovery with revenue growth of over 50% in constant currency. This is the result of the actions we took in 2014 to restructure the business, as well as the benefit of recent product launches. Core operating profit increased by 34% in constant currency, 6% on a reported basis. We did an excellent job controlling costs, which helped to absorb the impact of currency. The core operating margin was 20.7%, slightly ahead of our expectations. Excluding the impact of currency, core operating margin expanded by nearly 400 basis points to 24%. Injectables. Injectables revenue was broadly flat in 2015, in line with the guidance we gave at the beginning of the year, and an excellent result when you take into consideration the extremely strong performance we had in 2014 when revenue grew by 33% and in constant currency we grew 3%. We achieved excellent growth in MENA; up 14% in constant currency, benefiting from the actions we have taken to strengthen our sales and marketing activities. In the U.S., we saw good demand across our portfolio, despite increased competition on certain higher value products, and continue to be successful in capturing specific market opportunities. In Europe, revenue grew 15% in constant currency, reflecting strong growth in contract manufacturing sales as well as good demand from recent product launches. Injectables' core operating profit grew 18%, with core operating margin of 43.9%. Operating margin above 40% is extremely rare for this kind of business, and certainly amongst our peers. It reflects good control of costs and the maintenance of a very favorable product mix, including the persistence of certain market opportunities. R&D expenses were also lower. Approximately $23 million in R&D expenses related to the tech transfer of Bedford products were capitalized on the balance sheet. Going forwards, we expect injectable operating margin to return to more normalized level of around 36%, which clearly is still very high for the industry. Generics. As expected, the specific market opportunities that drove the very strong performance of the generic business in 2014 declined during 2015. As a result, revenue decreased from $216 million in 2014 to $151 million in 2015. This reduction in sales impacted profitability with core operating profit decreasing from $113 million to $46 million. The core operating margin was 30.5% in 2015. If we look at this business excluding certain market opportunities, and what we mean here, doxy and colchicine, the underling portfolio did extremely well, with strong growth of 39%. Cash flows. Group operating cash flow was $366 million in 2015, compared with $425 million in 2014. This reflects the lower contribution from specific market opportunities for the generic business this year. The primary uses of cash have been CapEx and product-related investments. Cash conversion for the Group was 25%, in line with our target ratio. Capital expenditure. The capital expenditure in 2015 amounted to $82 million, compared to $91 million in the same period of the prior year. Around half of the Group CapEx was in the MENA region, maintaining and expanding our facilities across the MENA, including Jordan, Egypt and Sudan; integrating Bedford and expanding capacity in Europe including a new injectable plant in Portugal; and expanding capacity in the U.S., maintaining and installing new machinery as well as implementing certain upgrades, including IT in preparation for the integration of Roxane. Product-related investments. In 2015, we continued to invest in R&D across our three businesses, to drive future growth. Our product-related investments, including R&D expenses, were $71 million, around 5% of Group revenue. Half of that amount was expense. And the other half relating to the tech transfer of Bedford products, as well as other product acquisitions, was capitalized on the balance sheet. In 2016, we expect Group R&D expenditure will increase significantly, due to the consolidation of Roxane and its high level of R&D spend. The balance sheet at December 2015 remains very strong. Net debt was $135 million, and net debt to EBITDA was 0.3 times. In April 2015, we strengthened our financing capabilities with the issuance of a $500 million 4.25% Eurobond, which is due in April 2020. The proceeds were used to refinance existing debt facilities, including the bridge loan of $225 million used to finance the Bedford acquisition in 2014. On February 29, 2016, the acquisition of Roxane closed and the net cash consideration of $575 million, net of certain working capital and other adjustments, was paid to Boehringer. This was funded through a combination of cash and the utilization of the Group's existing debt facilities. Before going through the outlook for 2016, I would like to highlight some key figures related to the Roxane acquisition, which we are expecting to impact our reported numbers. With the acquisition of Roxane, our reported operating profit and net income figure will be impacted by certain adjustments related to the acquisition cost accounting, such as amortization charges, inventory step-up, acquisition and integration cost, and the proceeds from the divestiture of products. There will also be additional non-cash expenses related to the revaluation of the fair value of royalty and contingent liability payments. It's still quite early to give precise guidance on these costs, but we've tried to guide as best as we can at this stage, and we will update these figures over the course of the year. At this stage, we expect around $115 million of exceptional and other expenses will hit both reported operating profit and net income. So this is just the operating profit and net income. What we have previously called adjusted is now going to be called core. We feel it simply better reflects what it really represents, our core business. Finally, the outlook for 2016. We are expecting Group revenue to exceed $2 billion. This is including sales of 10 months of Roxane. For our branded business, we expect to perform in line with historical trends in constant currency, and we are targeting continued improvement in core operating margin. Our injectables business is expected to grow in the mid to high single digits, with core operating margin of around 36%. For our generic business, we are expecting revenue in the range of $640 million to $670 million, including 10 months of Roxane, and core operating margin in the low double digits. We are expecting net financing expenses to be around $62 million; CapEx, including the Roxane business, to be around $200 million; and effective tax rate of around 25% in 2016, expecting it to return to our 2014 level in the medium term. Thank you very much for your attention, and I will hand back now to Said.

Thank you, Khalid. We'll start with the branded business. So again, 2015 was an excellent year for us in the branded business. We delivered strong growth in key markets such as Saudi Arabia, Egypt, Algeria and Morocco. Our focus on high-value products and sales force productivity is showing great results. We also did a great job containing costs during the year, as Khalid pointed out earlier. In addition to that, we made good strategic progress. The acquisition of EUP will help us launch our oral oncology portfolio in Egypt. We have an impressive pipeline of oncology products and we expect to be a market leader with these products across the MENA region. This should be supported by our oral oncology facility in Jordan which was approved this year by the FDA. We successfully launched 54 products and received 139 approvals across all our MENA markets, positioning us well for future growth. We remain focused on our higher-value products and driving operating efficiencies. We are expecting 2016 to be a good year for the branded business. We still see good opportunities to strengthen and grow our businesses, and we will continue to target investment opportunities, both on acquisitions in our core markets and potential new market-entry opportunities to extend geographic reach and replicate our business model in other emerging markets. New products are, of course, a key driver for growth. We will continue to be pursuing partnership with key licenses, establishing long-term relationships across all our markets in the MENA. Okay. Next slide. Across all our markets in the MENA, A key growth driver will be new launches. We launched a total of 54 products across all markets in 2015, including 15 products in Saudi Arabia and 14 products in Egypt; most notably, the leading oral oncology product, Imatinib, as well as Asenapine, products for which we are currently the sole supplier in the Egyptian market. Many of the launches this year were for products in our targeted therapeutic areas, primarily CNS, diabetes and oncology. Moving on the injectables business. Our global footprint remains a key differentiator in our injectables business. We have achieved a lot in 2015 across our three main geographies, and we have clear objectives for 2016 that we ensure we continue to deliver future growth and profitability. Importantly, in 2015, we returned our Portuguese facility to full compliance with the FDA since the lifting of the warning letter in November. We've already had six products approved from this facility so far. During 2015, we successfully launched three of the Bedford products. This was ahead of target and reflects the excellent job combined Bedford and Hikma R&D teams have done in transferring the products to our facilities. The Hikma and Bedford teams have also done a fantastic job in leveraging the machinery and equipment acquired from the Ben Venue facility. An enormous amount of equipment has been moved to our Cherry Hill and Portuguese facilities, including nine lyophilisers that were moved to Portugal. We have also been making good progress in the commercial front in Europe. We are looking to penetrate new European markets and have submitted over 200 files across Europe. Looking forward, we have a fantastic pipeline of products that we expect to launch in the coming years. Of course, these are the Bedford products, but also products we developed in-house and through external partnerships. At the same time, the Bedford R&D team will be increasing their focus on new development projects, as significant progress has been made on the tech transfers. Of course, quality will remain a key focus this year in order to ensure all our facilities remain in good standing with the FDA and other regulators. We've shown you a variation of this slide the last few years. This year, we are focusing on how far we've come since we acquired the MSI business from Baxter in 2011. Our strategy since then has been to shift our portfolio to higher-value products in order to increase our overall market share by value while maintaining our position as a top-three player by volume. You can see from the slide that we have achieved our goals. We remain the third largest supplier by volume and now are the fifth largest by value, just a fraction behind the fourth largest. And we have gained meaningful share since 2012. With our strong differentiated pipeline, we believe we are well positioned to continue to grow our market share by value. The process of transferring the Bedford products to our facilities in the U.S., Germany and Portugal has gone smoothly, in addition to the three formal Bedford products launched in 2015. We have also had one approval so far this year. You can see from this chart we are aiming to launch 17 products over the next two years, with an expected revenue contribution of around $150 million by 2017, in line with the guidance we originally gave when we announced the acquisition. Generics. Following an exceptional 2014 when we benefited from certain market opportunities, in 2015 we have done a great job in growing our legacy business, maximizing the potential of our existing portfolio. We have also launched our first branded product in the U.S. and our first authorized generic, and put in place a new branded sales force. Our highlight in 2015 has been the acquisition of Roxane, which will transform our generic business in the U.S. In 2016, our priority is to integrate Roxane. This business has an excellent team that we are integrating into our business in the U.S. and into the wider Hikma Group. They have a fantastic pipeline that, in combination with our own pipeline, should deliver great results in the coming years. There's a lot of work to be done to integrate all functions, but we have an experienced team in the U.S. and a good track record for delivering results. We will be targeting cost synergies and we'll take you through the integration priorities in the coming slides. Roxane has a great team of people. They will be led by Randy Wilson, President of Roxane, who will be joining the U.S. executive management team. The quality, operations and R&D units will continue to report directly into him. Roxane marketing, supply chain, IT, and all legal units, will report into the other Hikma functional heads, as you can see from this chart. These teams have been working together through the integration planning process and built up good rapport. The chemistry is great and we are ready to work together as one team from day one. Roxane's differentiated pipeline was a key driver of value for us when we were evaluating the business, and a critical part of the integration will be making sure our R&D and regulatory teams are working well together to ensure the successful execution of that pipeline. Roxane has a large R&D team with impressive capabilities. Their expertise in regulatory and product development has enabled them to file an average of eight products since 2010. For Roxane, we are expecting eight launches this year and close to 20 by the end of 2017. Like their marketed products, their pipeline products are highly specialized with multiple levels of differentiation. Our teams have worked hard to develop an integration plan with a disciplined approach to creating value and capturing synergies across different areas in the Roxane business. A comprehensive roadmap and timeline has been put in place, and we see a lot of scope for improvement. We are targeting annual savings between $35 million and $45 million by 2017. 2016 will clearly be a transitional year for Roxane as we focus on integrating the teams and extracting synergies. Looking further ahead, once the integration is complete and we are benefiting from the new product launches, we expect the profile of the business to change considerably. While we expect price erosions on the currently marketed portfolio and the decline in revenues from the supply of BI products, this should be more than compensated by the launch of new high-value products, enabling us to achieve our guidance of $700 million to $750 million in 2017. On top of this, the cost synergies will enable us to achieve our medium term margin guidance of around 35%. In addition to Roxane's exciting pipeline, we have a number of products pending approval that have been developed through our own R&D and external partnerships. Combining these with the Roxane pipeline should deliver significant value over time. We continue to invest in developing our pipeline with more differentiated products in niche market segments. In summary, the outlook for the Group for 2016 and even more so for 2017 and beyond is extremely positive. Roxane transforms the prospects of the generics business in the U.S. This combined with the strength of our business in the MENA region, our leadership in global injectables position, are strongly for continued growth. Thank you very much and now we will be happy to take your questions. Wow, it was that clear? No questions. Q - Unidentified Analyst: Thanks, Said. I've got two unrelated questions and the first one's a pure financial one. You talked about cost control measures in the MENA to try and offset the currency devaluation. Are those permanent cost reductions or are those more a case of deferring costs into the current year?

We actually, it's not just the MENA; actually our overheads for the total injectable group have gone down in real numbers. So clearly the cost controls that we have been putting through are working very well. So that obviously is permanent and we are very happy with the business growing like it is and yet having lower overheads, I think is a tribute to our operational team. In the MENA, the same thing with the plants, we have been doing a great job in controlling costs permanent costs and we are now also in marketing, we are starting to use digital marketing a lot more. So we will try to control the number of medical reps we have and reach doctors through new social media and digital marketing. So again, all of these controls are they fit in not to save this year and then expense next year, no. These are permanent controls in place that we believe we will be able to do even better cost control as we move forward.

So it's more focused on efficiencies rather than just a one-off cost saving. So it's more focusing on how we are going to be more efficient, how we are going to deliver the same output with less numbers, let's say, of employees or less cost.

Thanks. Okay, and then the other question was on the U.S. business. I was just wondering to what extent has the consolidation in the buyers now in the U.S., which obviously has become really extreme, affected the way in which you predict your likely sales of new product. Obviously you mention in the text that colchicine hasn't got quite as well as you'd hoped and I must say there are a number of companies, I think, that are finding that new launches aren't going the way they would have expected because, with the buyer concentration, the innovators find it much easier to hold on to market share if they want to. So I just -- do you think there is any connection there between your own performance and the buyer landscape and does it have any impact on how you're going to look at -- how you're going to predict your own sales of the new products that you are going to launch?

Yes, there was a report yesterday in the Financial Times about the U.S. market that showed that actually branded products are, the prices are growing significantly while there was a 20% drop in generic prices over the last few years. This I think is in some ways good news because there has been all this publicity about generic prices going up and price gouging and so on. So clearly that's not the case. The consolidation is there; it has affected the market. I don't think it had that significant effect on us last year. Colchicine is a question of -- it was our first branded product so you have to put in place a team to do the detailing and so on. So it wasn't really a question of because of that. It was our first branded product so we're learning. It's a learning cycle. We had to put in place -- a team in place, a branded team, and I think we will be seeing the business growing as we move forward. Obviously you have to be prepared. The market dynamics are changing, the buyers' teams are changing and you have to -- there could be opportunities as well as there are price pressures. So we believe the idea of acquiring a company like Roxane is because we wanted to get differentiated products, products that would not have the amount of competition some other products would be. So we're very comfortable, we're very excited about the pipeline that we have both in Roxane and of the products that we have been working on over the last few years.

Yulia Gerasimova, Goldman Sachs. I have questions mostly on generic business. I'll start with the Roxane pipeline, which you several times repeated it's fantastic, but you didn't disclose so far any much details on the Roxane pipeline because I presume you were binded with agreement with BI on not disclosing this stuff. But right now could we expect any more clarity on what exactly is in the pipeline and maybe at least about products which we already know that Roxane has been developing like VR3 and V15, or Xyrem, or any other which basically was in the news? I think that start with this question.

Okay. Well, like we did when we acquired MSI, we had a day that -- what do you call it, Investor Day. So obviously we are planning to do another one and take it to Columbus, Ohio hopefully when it is very, very cold. So you suffer like we do. Do you want to answer the...

Yes, I think in terms of the pipeline maybe you are referring to [indiscernible] currently we, as part of the deal, once we get the file accepted we will inform the markets and we can't disclose more information at the moment. Of course there are other products in the pipeline which seems very interesting. We've got questions. We need to get a hold on the portfolio and then maybe towards mid-year results we'll be able to give more clarity on our pipeline.

And regarding your guide was submitted to the LDA, was it submitted to the LDA or not?

Once we get the file approved we will tell you that it's submitted and approved.

I think another question is on the legacy portfolio, which has been growing really well in 2015, but what's your expectations on the growth of this portfolio in 2016? And the margins which you indicated the guided margins for 2016 for generic's business has slowed up low double digits. Obviously, they are affected by the consolidation of the Roxane but on a standalone basis your core Hikma portfolio, what kind of margin do you expect on the U.S. generics business and how affected they could be by what was discussed about the pricing pressure in the U.S. generic market?

First thing has been stable for us so we have not seen major change to our pricing especially for our products. We've seen some growth in volumes, and this is why we've delivered some growth in 2015, excluding the colchicine and the doxycycline. Now going forward, 2016, we expect that the performance will continue the same. We see some growth. Margins are not going to be high on these products because of the leverage, because the facilities. We have small legacy portfolio. At the same time, the consolidation between the generic and -- between Roxane and our legacy generic business is going to impact the margin. This is why we guided towards low double-digit margin. There are many opportunities where we can leverage or have some synergies between the two facilities. Of course, we cannot disclose at the moment what are our plans but there will be some cost synergies. There will be as well other synergies that will improve the margin. And this is why we are confident of our margin for 2017 and the strength of our performance for the generic business in 2017.

I would assume the margin -- the synergies that you mentioned are included in the $35 million, $40 million guidance annually which you expect to achieve, right?

Yes.

My final question would be colchicine. Can we get an update how it is going right now? What the news you hear about other challengers for the Takeda patent and what market share you plan to achieve this year, given that you established a med reps and sales force last year.

You want me to handle that, Khalid?

Colchicine is a new drug for us, a new branded drug. It's taking time to gain momentum in the market. We have a marketing campaign. We have now a sales force nationwide. Our teams -- there are contracts that we've signed.

Yes, that is important; we signed some important contracts.

Contracts that will come through over the years, so our team are confident that -- in our ability to deliver strong growth for the colchicine for 2016 and beyond in 2017 in terms of Takeda settlement, we can't disclose much information at this stage. This is where we are. James Vane-Tempest: James Vane-Tempest, Jefferies. I just have two questions on guidance, please. Firstly, your U.S. generic sales guidance slide for 2016 had including product divestitures. I was just wondering what the magnitude of those sales are. Secondly, your high single-digit growth in injectables, with nine Bedford approvals expected for this year, what are your expectations for the legacy business, please, excluding Bedford? Thank you.

So in terms of the injectables, we are expecting, as I said, mid to high single digit this assumes that specific market opportunities that we have, which we refer to as glyco, is going to decline over time. And this will be offset by the Bedford product launches. This is why it's more of a balanced portfolio now, rather than being just focused on certain market opportunities. So we will continue to see high margins, as I highlighted, around 36%, which is relatively high. This is driven by the launches coming from Bedford.

As I said a little while ago, this year already the first two months, we have achieved -- we have got five approvals for our own products that we submitted from our own submissions. Yesterday we even got an award from the FDA. They're giving out what's the award called the Supply Shortage Award. We received a letter thanking us because we had alleviated that problem. Clearly, getting five approvals in two months, the first two months, is clearly an indication that from a regulatory point of view our submissions and our regulatory track record is obviously in very good standing. So we hope to continue to see more products being approved this year. And of course, that should help the business grow further. As Khalid said, we are assuming that glyco will have competition coming in, although so far we haven't seen anything yet. But in our predictions, we are taking into account that there will be more suppliers coming into the market, so that could also be a good answer.

What's your first question, sorry, James. Can you repeat the first question? James Vane-Tempest: Yes, just on your U.S. generics guidance slide and product divestitures, just wondering the magnitude of that.

Yes, it's around $20 million, $20-plus million.

[Indiscernible] from Citi. Just three areas to touch on, maybe the first two are just updates and maybe Khalid just spent a lot of time on the last point. For Said, just on biosimilars in MENA, obviously it's a long-term opportunity but just can you give us an update. Has anything really changed, either you're more excited you're less excited in terms of what opportunity really looks like? That's question number one.

We are moving ahead with our original plan. The plan that we put, we're moving ahead with it, with the milestone payments and introducing new products and working closer with Celltrion. There could also be opportunities with Celltrion not just in the Middle East. We're seeing if we can do some other business with them outside the Middle East. So obviously, we are excited about the possibilities there, and as I said, we are moving ahead full steam with the payments and getting the products.

As we highlighted in the past, we launched Nazima [ph] in Jordan and it's going to be launched and approved in Saudi Arabia, Morocco and Egypt. So, we'll see more sales coming through in 2016 for the biosimilar. And then we are going to, as you know, we have an agreement for nine products. So now once the third product comes in, we'll be working with them in order to have full regulatory team looking into it and submitted to the different markets that we are in.

All right. Then the second and third question, on Vitabiotics, I know you signed the deal last year. When is that really going to be meaningful to the branded business? Is that something for a few years down the line or are you going to see some meaningful revenues this year?

As any other branded products, although this is more of an OTC it's going to be a gradual increase in sales. Because it's coming through our sales and marketing team, so we are leveraging on that. We're starting to see some sales and we are going to see more sales coming through in the coming few years. It's a build-up, acceleration of sales over the next two to three years.

And then just the question I'm most interested in hearing your answers to are, just generally we're seeing investor sentiment towards U.S. generics, spec pharma, sour aggressively, big concerns about accounting for rebates etc., etc. Could you just address what is clearly the key bear concern on Hikma that there is something in that accounting for U.S. generics that could come back to haunt you? Make sure that why you're different to the other players that have encountered problems?

I think that I would say that it's not fair to compare Hikma to others because we are confident in our systems and in our ability to -- and our control environment. We have a robust control environment for gross to net adjustment. We have teams -- different departments talk to each other. We have processes in place. We as well do certain -- we take certain actions that others don't take and that actually we compared our processes versus others. For example, we check the inventory levels at the wholesaler on a monthly basis. We go and have customer reconciliations with our wholesalers on a quarterly basis. So there are many measures that we take to make sure that our systems are strong and we are conservative as well in terms of how we account for the gross to net. So I assure you we have no issues in that area.

Stephen McGarry, HSBC Global Research. Three quick questions, firstly, what is the inventory level at Roxane generally and compared to the rest of the Hikma Group? Will there be any period of inventory adjustment and, if there is, can you indicate how long that would be? And then, secondly, just coming back to disclosure, obviously, if the Company gets bigger and bigger and the individual line items for certain products could become quite meaningful. If you won't, for either commercial or other reasons disclose any of that it's actually incredibly difficult for us to get investors comfortable with what the forecast may be. As a plea more than anything else, could we ask for better disclosure?

I'll answer your first question. In terms of the inventory levels, it's still too early for us as well to see what would be the normal inventory levels. Of course, we are -- our teams they are hands-on. It's something that we are looking at. I think Roxane, they have an efficient, I would say, supply chain department. This is something that day one our team is going to consider. It's considered the distribution it's considered the logistics, so we will come back to the market, giving more clarity, later on. In terms of the product pipeline and the disclosure about the products, as you know, we can't at the moment. It's our policy not to disclose product by product but we are confident in our guidance for 2017 where we said we'd have expected sales of $700 million/$750 million. This includes some sales of high-value products. 2016 is going to be a transition year for us and it's the year that we are going to integrate the business, at the same time prepare ourselves for the future growth, for 2017 and beyond.

In terms of size, this is in sales this is much bigger than MSI, but in terms of size of personnel and so on, it's very similar to the size of what MSI was when we took it over. I think the speed at which we integrated the business and got some efficiencies extracted from it I think should be a comfort about our ability to integrate and get efficiencies out of this. Do you want to -- do you have any questions? The poor guys in the U.S. team, we made them wake up at three in the morning. Do you have any questions for them?

My question is on the branded products, in MENA again. Given your really strong constant currency growth here, is this mainly driven by market conditions or, obviously, it'll also be coming from the new product launches and value products, but are you outgrowing the market? Is this a better funding environment from the government or is it consumer-driven?

I think for us, what we have been doing is the -- prices are fixed by government and as currencies devaluate, that means profitability margins have to go down. And it's really very difficult to get price adjustments from the government, especially in the political environment that we have. So growth depends on how fast you launch new products and what kind of prices you can get for the new products. So this is what we have been focusing on, is launching new products, higher added-value products and more differentiated products. Like we said, our Imatinib that is the only one that is on the market in Egypt. So, that's the focus. We have put a lot of effort on decentralizing R&D and giving -- we have R&D teams in individual countries, like Egypt, Morocco, Algeria and Saudi Arabia, so that has really accelerated our ability to launch newer products. I think the trick moving forward is continued cost control at the manufacturing level; better utilization of our marketing teams; using more social media and digital marketing; I think that's the way forward, not just in the MENA, in all markets that depend on promotion. Physicians are all wired. They all have Internet access and so on. So we are spending more for that. But the trick is quick launches of new products and higher value-added products.

James Quigley, JPMorgan. In the guidance for Roxane, how much is that pipeline-dependent in ‘16 and ‘17? And also on the Roxane pipeline, given its differentiated nature, is there going to be additional cost in terms of pointing out those, the differentiating factors to the payers to support the launch and could that flatten out the margin progression to the medium-term target? And, finally, on M&A strategy, given that you've saved around $500 million on the Boehringer deal, does that alter your M&A strategy? I know you've talked about Turkey as a potential -- or companies in Turkey as a potential target. Is that now broadened, given you have a bit more firepower?

So, I'll answer the M&A and I'll let Khalid answer the other part. Obviously, from a cash point position, we are in a position to do more acquisitions, if we need to. Right now the main focus is going to be on integrating Roxane and how fast we do that and how fast we feel, how comfortable we feel in that happening will determine how fast we move on other M&A. Now having said that we always say that every division in every geographic region has its own M&A and its own BD people, so it doesn't mean that the M&A teams in Europe and in the MENA and emerging markets aren't working. They are working. They are trying to find -- and I think as we have shown, demonstrated to you over the last few years, almost all of our acquisitions are acquisitions that we develop long-term relationships with the seller. They're not like there's something on the market, we bid for it and we take it. You have to work a few years and build relationships and so on. So that's continuously going on. But, again, the major focus right now is integrating Roxane as fast as we can.

But at the same time, in other areas like emerging markets, if we have found small bolt-on acquisitions, of course we will continue to grow.

Nothing above the $3 billion acquisition.

In terms of the margin in our guidance for Roxane, we assume that there will be an increased competition on our base product and base business, and this will be offset by product launches. And as we highlighted in sales presentation there will be almost 20 products that will be launched between 2016 and 2017 and this is what's going to drive the improvement in margin, and this is why we are moving from slightly dilutive 2016 to accretive in 2017.

Given we've got Mike on the phone in the U.S., and got U.S. management, maybe just the same question about a candid overview on the U.S. dynamics of the Hikma business in terms of key opportunities as well as key risks. I don't know if Mike wants to expand on that, thanks.

I think that the market in the U.S. continues to be stable in terms of pricing. With respect to the integration of Roxane it happens to be going very, very well. I always comment and compare to the way the integration from MSI went where there was a lot of we and us for approximately a year. That's kind of already disintegrated, and it's mostly us, and the team has been working together for quite some time because of the deal fatigue with this acquisition. But overall it's going very well. We're working together on the synergies. In terms of the facilities in the U.S., again the way that we integrated MSI with utilizing the high speed, high volume production we will see what's the most efficient way to keep all of our facilities running in the United States and evaluate all options. But the overall market, we feel that we're ahead of the game because of the differentiated portfolio of Roxane, and we have the consolidation of the wholesalers and the retailers, but the differentiated portfolio and pipeline of Roxane should help to combat that phenomenon going on. Brian, would you like to add anything regarding the integration of Roxane?

Mike, I think the only thing that I can add is related to some of the earlier comments around synergies. I think we're encouraged of the opportunities that we see where increased scale and volume from the combined business can allow us more leverage with third party suppliers across all areas of the business. So that's an area within the integration that all the functional work streams are focused on in order to achieve our synergy objectives.

Can I also continue with the U.S. team, so speaking broadly about mid-term outlook, we have brand product launch, and Roxane integrated, so what kind of growth of the underlying business you can expect in the mid-term from the U.S. injectables and U.S. generics, so after all integrations are done, and excluding any kind of special opportunities, so underlying growth of both businesses, what is your mid-term outlook on that?

The underlying growth if we look at the legacy business, the legacy business in the injectables continues to be strong. We continue to drive more market penetration as well. But that is going to be -- there's going to be an upside with our pipeline that we're constantly getting approvals from. That's with the internal R&D from Portugal and Cherry Hill, and Bedford, and we also have our business development deals with at least half a dozen partners that are now starting to come to fruition as well. With respect to the non-injectables, the orals, we feel that the market is stable right now for the underlying legacy portfolio. Again, the differentiated pipeline and portfolio for Roxane, well, that's the strategic direction that we went and that's the reason why we acquired Roxane. But we also have many other products in the pipeline in terms of capsules and tablets, and derms, and transdermals, and we're looking at other dosage types. And those are scheduled to come to fruition again from ’17 to ’19. I didn't even introduce Brian Hoffmann who is the President of West-Ward he's on the line as well. Brian, would you like to give a little clarity into the pipeline of the other dosage forms, and the procedures that we've been following.

I guess just further, thank you, Mike, the further explanation that I can give is or further context is that a few years ago we embarked on a strategic initiative to diversify the dosage points where we compete. And we took the view that we didn't necessarily want to restrict ourselves just based on our internal manufacturing capabilities. So as Mike mentioned, we have built a very strong network of very strong development partners, as well as CMOs who can support us on those initiatives including topicals, transdermals, and opthalmics and even some inhalation products. We're very excited about those products. It's of course our strategy of continuing to build a pipeline of differentiated products, and we'll start seeing the benefits from those partnerships over the next several years when we should be getting the first of those products approved.

Thank you very much. Just two more questions, one to Khalid, I just wanted to pick up on the inventories because we've seen the inventories right down in Roxane financials in the last year, 2014 financials, and then you have right now I think some one-off expenses related to the inventory step-up. So could you just explain how does it link together?

Yes. In terms of the writedown of inventories, this is something related to the previous management. So we have different system how we want to control that inventory, and we have more of a rigid control, we monitor the inventory what's going to be expired. So we take actions in order to sell it before it becomes slow moving. However what we are referring here to inventory step-up, it's something according to the new acquisition standards, IFRS standards, where you have to fair value the inventory when you do an acquisition. So as if you’re, as if it's closer to 0.8 you have to fair value it to dollar, but you are selling it for dollar, so as if you don't book any revenues. It's a non-cash item, but this is the accounting standard, so we are expecting this to be $50 million. And these numbers are just for information purposes, just for all the analysts, just to guide them what to include, because the consensus would be if everyone who used different numbers then we can't have a meaningful consensus. We'll come back to the market, guiding towards what would be these inventory step-up, it might be $20 million, it might be $100 million. Amortization charges, still in the process of doing the purchase price allocation valuing the pipeline from an accounting point of view and define when these products are going to be launched, and then amortize. At the same time we'll have more of clarity on the -- if there is anything else, non-cash that will be reflected. So this only affects the reported figures, and we looked into other pharma companies, and they refer to that adjusted to core. And this is how they present, and this year we have a new P&L note, where we show the business, the core business, the exceptional and the statutory. So you will be able to track what is the core business, what's the statutory, what's the exceptional. So this will make our life and your life easier.

And just, Said, on the European injectables business. I think you mentioned during the presentation that some of the Bedford equipment was actually transferred to the European facilities. So could you -- and you also talked previously on a presentation that you plan to focus more on the European business, to turn it around. So how is it going, and can we turn the growth back to the positive territory, on that?

We actually moved significant -- like I said, like for like, there is significant amounts of equipment. Do you quantify them in dollar terms?

We've got over I would say $100 million worth of CapEx that was moved between the different sites that we have and building facility in itself, in Portugal, at a very minimal cost.

So obviously our facilities in Europe, in Portugal and Germany, are geared to export globally, and not just to sell to Europe to actually but to actually probably about 80% of the output goes to the United States. And a big chunk goes to the MENA and the rest to Europe. We still don't think Europe is going to be a big game changer, in terms of sales in Europe is going to be a big game changer. We are looking at acquisition possibilities for technology, for more technology rather than -- but in the meantime we have a team in place, and we are submitting registrations and files and getting there. And there is an increase in sales, but no, compared to the rest of the Group, it's not going to be a game changer.

And I think I asked this question then during your previous presentation, when the Bedford changes, changes of the Bedford conditions, sorry Bedford, Roxane conditions that you announced about the buyback. But maybe you have any update, because the stock went down significantly since then, already. So do you plan to do any buyback, because you can use these shares for the future acquisitions, which you did right now, for that?

I'm going to be buying them, not Hikma.

But Hikma doesn't plan to do any buybacks?

We are evaluating everything, but both Hikma and our holders [ph] are evaluating their opportunities to see and what is being bought back, yes.

And when can we expect any update on that?

I think by -- we have to, once we start, if we start buying we have to update yes we have to tell the market.

Mostly, the cash will be used to for more I would say, opportunity and growth, rather than just by, if it's going to be, it's not going to be like a buyback plan, that will be put, and then there will be a big bulk buyback plan. It's going to be something that’s --.

Speaking for Hikma, of course...

Something that could be used for the incentive plan, but nothing, I would say, of big amounts.

Yes, I've just got a quick follow-up question on the U.S. business. You're, I think, combined, looking to launch 74 products over the next three years. Although the FDAs made some progress with GDUFA fees there's still quite a huge backlog of filings. Just wondering how much of a risk these launch timelines get pushed back, from the FDA's perspective, which is beyond your control, which would then clearly impact your 2017 guidance?

Like I said, as I said just a little while ago, for the first two months of this year, we already had five approvals. So with the injectables, we feel that there is an accelerated effort on behalf of the FDA to get product approvals. In terms of -- Mike, do you want to try to, do you want to?

Yes, sure, sure Said. Yes, whenever we're doing any type of forecasting, especially with the current portfolio or the pipeline, we always take, we always give it some sort of a haircut in terms of timeliness with respect to FDA approval. So we take into consideration what the average approval time is, the difficulty of the manufacture and the approval process of the individual product. And we institute that into the forecast. So we feel we've accounted for that, in a decent, conservative way.

Jo Walton, Credit Suisse. Another question about the U.S., I wonder if you could tell us a little bit more about the colchicine experience given it was your first branded product, and what you've learnt. And going forward, looking at the Roxane portfolio, particularly those that are differentiated, I assume that they would also effectively be brands, and they're ones that you also feel that you would need to support. So am I right? Is there a proportion of the ones that we're looking at here? And what might this mean for your marketing costs, going forward?

So, I'll answer the colchicine question. The colchicine question was definitely an experience. We did a great, great job in the 505b2 filing, and we surprised everybody with the approval. Unfortunately, the judge in the case did not want to make an immediate decision, which everyone saw was kind of obvious. So the temporary restraining order took away our first market-mover advantage, to convert the market from tablet to capsules. So therefore we were not going to sell through the normal channels, and we had to quickly turnaround and organize a 40-person branded sales team. And then we then proceeded on detailing, to doctors, and then we had a full blown marketing effort with advertising, co-pay cards, e-voucher programs, educational materials, Web content and so on. Now we are obviously getting better market penetration, and we see month-to-month improvement on that. It's not the way that we wanted to go, but I also think that it says a lot about the team that we have, that we can actually turn on a dime and organize a branded sales team in three months and get them out on the street and to see some positive movements on that. And so far all the feedback that we have is extremely positive, with respect to our product, moving forward.

Are there any Roxane products, any plans for branding other products in the future Mike?

Right now I don't think that we can make a comment on that. The only thing I can tell you is that we no longer steer away from the branded business. We do have the branded salesforce. We do plan on expanding on that, so if there are products from Roxane that we do plan on branding, we would go through the same channels that we did with the colchicine salesforce.

Okay, thank you.