By Brazil Stock Guide – Hypera S.A. (HYPE3) lowered its 2025 growth projections and chose to prioritize cash generation and deleveraging, amid Brazil’s high borrowing costs and weaker-than-expected performance in key segments. The drugmaker now forecasts sales growth of 7% to 8% in the second half, implying mid-single-digit growth for the year, below its initial full-year target of 8%, according to a BTG Pactual report.
The revision follows the completion of a working capital optimization program, which cut its receivables cycle from 120 to 60 days. Still, pressure in the painkiller market — about 20% of sales — and stagnation in institutional sales, which account for 5% of revenue, weighed on the outlook. At an investor event in Santiago, Hypera’s management said it now expects EBITDA-to-cash conversion of 90%, up from 70% previously, reinforcing its focus on financial discipline.
“Until leverage falls below two times net debt to EBITDA, acquisitions are not a priority,” the company said. Currently, leverage stands at 2.5 times annualized second-quarter EBITDA, or roughly six times over the last 12 months.
What’s at Stake
The company faces a turning point: maintaining margins of around 33% while preparing for entry into Brazil’s generic market for semaglutide — the active ingredient in Novo Nordisk’s Ozempic. The drug, which gained global attention for treating diabetes and driving weight loss, will lose patent protection in Brazil in 2026. BTG estimates the local market could exceed R$6 billion ($1.1 billion) annually, and Hypera was among the first to file for regulatory approval with Anvisa, the Brazilian health authority.
Guidance and Valuation
BTG trimmed its revenue forecasts for 2025 and 2026 by 5%, while keeping EBITDA projections largely unchanged. Net income estimates were cut due to higher average debt levels. The bank maintained a neutral rating, despite what it views as attractive valuation: a price-to-earnings multiple of 12.8x in 2025 and 7.9x in 2026; EV/EBITDA of 10.7x in 2025, falling to 6.9x in 2026. The new year-end 2026 price target was raised to R$29 per share from R$26.
If it captures part of the Ozempic generic market, Hypera could become one of Novo Nordisk’s top local competitors. Shareholders, however, who have seen the stock drop 23% in the past 12 months, are still waiting for clearer signs of growth and deleveraging. In the near term, higher freight costs and weak painkiller dynamics may cap earnings.
Outlook
A mix of falling interest rates, stable margins and new product launches could allow Hypera to reduce leverage and boost payouts in the coming years. The decisive catalyst remains semaglutide: if approved and launched on schedule, it could reshape the company’s growth profile and strengthen its position in Brazil’s pharmaceutical market.