Moody's trims Emergent BioSolutions

Moody's Investors Service said it downgraded the ratings of Emergent BioSolutions Inc., including the corporate family rating to B2 from B1 and the senior unsecured rating to Caa1 from B3. The speculative grade liquidity rating remains unchanged at SGL-4.

“The ratings downgrade reflects a delay relative to Moody's prior expectations of a U.S. government purchase order for ACAM2000, Emergent's smallpox vaccine supplied to the strategic national stockpile. The delay exacerbates the pressures in Emergent's contract development and manufacturing organization (CDMO), which remains unprofitable due to a high-cost structure including ongoing costs to improve compliance standards. In turn, the ACAM2000 delay will result in delayed profitability and cash flow, impeding deleveraging following the recent debt-financed acquisition of Tembexa,” the agency said in a press release.

Moody’s noted it does not know of any change in the U.S. government’s demand for ACAM2000 and the U.S. government’s purchases of Emergent’s other products have continued at the forecasted pace.

The outlook remains negative.

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