Moody's affirms AstraZeneca

Moody's Investors Service said it affirmed AstraZeneca plc's Aa2 long-term senior unsecured debt ratings and Prime-1 short-term rating. The outlook remains stable.

The agency said the rating affirmation reflects the very strong financial profile of AstraZeneca and the favorable cash flow growth prospects from its key products, tempered by a potential deterioration of the drug portfolio and pipeline due to weak late-stage pipeline and patent challenges by generic companies. At this juncture, however, Moody's predicts that AstraZeneca's management should be able to strengthen the pipeline over the next three years before critical patent challenges arise, in particular on Nexium and Seroquel.

The stable outlook reflects the agency's expectation that AstraZeneca should be able to keep a satisfactory level of cash-flow generation over the period beyond 2008 even if generic versions of Seroquel or Nexium are launched, given the time-line for the company to improve its pipeline and its currently very strong credit metrics.

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