S&P lowers Auxilium to stable

Standard & Poor's said it affirmed a B- corporate credit rating on Auxilium Pharmaceuticals Inc. and revised the outlook to stable from positive.

The agency also affirmed the B rating on the company's term loan facility, which includes a $50 million add-on. The recovery rating remains at 2, indicating 70% to 90% expected default recovery.

The ratings reflect the company's vulnerable business risk profile and highly leveraged financial risk profile, S&P said.

Key credit factors considered in the business risk assessment include its reliance on Testim for a sizable portion of revenues, limited growth potential and heavy dependence on the testosterone replacement therapy market, which is facing increased competition from major pharmaceutical companies, said John Babcock, an S&P analyst.

"The company's limited product pipeline and low profitability compared with its peers further support the view. Auxilium's financial risk profile predominantly reflects its highly leveraged capital structure," Babcock said in a press release.

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