S&P downgrades Nabi Biopharmaceuticals

Standard & Poor's said it lowered Nabi Biopharmaceuticals' corporate credit and senior unsecured debt ratings to B- from B. The outlook is negative.

The downgrade reflects S&P's belief that despite the company's recent announcement that it is resuming development of its previously derailed lead pipeline product, staph infection vaccine StaphVAX, Nabi continues to face a number of major uncertainties and has very limited cash flow generating prospects. In addition, Nabi's senior vice president of global sales and marketing was recently terminated, and the chief financial officer also resigned.

The low ratings reflect the company's narrow business focus, lack of sales diversity, uncertain product prospects and expected negative free cash flows over the intermediate term, the agency said. Nabi is cutting costs, including the closure of its European operations.

More positively, S&P said it believes that sales growth of PhosLo, the company's phosphate binder used to treat elevated phosphate levels in patients undergoing dialysis, will resume in 2006, as dialysis is a very expensive treatment and Nabi holds a marketing advantage because PhosLo is much less expensive than category leader Renagel, made by Genzyme Corp.

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