Standard & Poor's is not impressed with AstraZeneca's jump-start plan. The ratings agency cut the U.K.-based drugmaker's credit ratings, citing CEO Pascal Soriot's strategy update last month, Reuters reports.
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| AZ CEO Pascal Soriot |
It looks like it could be too little, too late for AstraZeneca ($AZN), the agency said. Standard & Poor's ($SPX) sees AZ's sales continuing to slide, putting a further squeeze on profits--and pressuring the company's debt ratios.
Soriot's revamp won't change AstraZeneca's revenue trajectory very quickly, even if all goes according to plan. The company's near-term pipeline is tissue-thin, key drugs are continuing to fall off patent, and an R&D overhaul will take years to bear Phase III fruit. There's speculation that AZ will do some deals to turn around the short-term outlook, but its recent buys have zeroed in on early-stage companies rather than drugmakers with late-stage or marketed products.
Just in the last couple of weeks, AstraZeneca lost Crestor patent protection in Australia and lost a patent fight over its asthma treatment Pulmicort Respules, both of which will take their toll on sales, Leerink Swann says. Plus, the company's rheumatoid arthritis drug, which it's developing with Rigel Pharma ($RIGL), fell short of expectations in a recent study, calling the program into question. Some analysts had pegged peak sales of that drug at $1.1 billion.
S&P figures revenue will drop 9% this year, and there's danger that sales could drop for several years to come.
- read the Reuters news
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