S&P bumps up Bausch Health Cos.

S&P said it raised Bausch Health Cos. Inc.’s issuer rating to CCC+ from CCC, its senior secured debt rating to B- from CCC+ and the ratings on the second-lien and senior unsecured notes to CCC from CCC-.

On April 11, the U.S. Court of Appeals for the Federal Circuit upheld a previous court decision that bars the Food and Drug Administration from approving the abbreviated new drug application submitted by Alvogen Pharma US Inc. subsidiary Norwich Pharmaceuticals for a general alternative to Bausch Health’s Xifaxan.

“We view this as significantly credit positive for Bausch because we do not believe there are sufficient candidates in the development pipeline to cover the material loss of Xifaxan sales from a near-term generic launch,” the agency said in a press release. S&P estimates the earliest a generic competitor could come to market would be late 2026.

“Furthermore, we believe that this court decision makes the separation of subsidiary Bausch + Lomb Corp. (B+L) more likely. The company appears committed to completing the spin-off as soon as possible, which we view as a credit negative given our expectation for a pro forma increase in leverage and reduction in scale and diversity. We continue to believe Bausch Health could have trouble refinancing its sizable debt maturities as they come due, especially if it completes the spin-off,” S&P added.

The outlook is negative.

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