Moody’s reviews Astellas Pharma for downgrade

Moody’s Investors Service said it placed Astellas Pharma Inc.’s A1 issuer ratings under review for downgrade. The outlook was changed to rating under review from stable.

The rating action follows Astellas’ announcement on Dec. 3 that it entered a definitive agreement to acquire the entire stock of Audentes Therapeutics, Inc. for about $3 billion.

“This acquisition indicates an urgency for Astellas to feed its long-term product pipeline after a wave of patent expiries this year, and signals a rise in acquisition event risk,” said Akifumi Fukushi, a Moody’s vice president and senior analyst, in a press release.

The transaction values Audentes at eight times book equity. It is the largest acquisition in recent memory for Astellas, and the first in recent years in which the company is using debt financing rather than cash on hand and internal cash flow, Moody’s said.

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