Biocon Biologics Limited, a global biosimilars company and a subsidiary of Biocon Limited (BSE: 532523, NSE: BIOCON), announced that S&P Global Ratings has upgraded its long-term issuer credit rating to ‘BB+’ from ‘BB’ and revised the outlook to “Stable.” S&P has also upgraded the rating on the senior secured notes issued by Biocon Biologics Global PLC to ‘BB+.’ The upgrade follows Biocon’s recent equity issuance undertaken to settle compulsorily convertible preference shares (CCPS) issued to Viatris Inc S&P noted that the transaction has contributed to a cleaner and more straightforward capital structure and improved overall credit strength.
In its rating rationale, S&P highlighted that Biocon has reduced structured debt liabilities and removed the US$1 billion CCPS through a combination of equity share swaps and cash consideration. The company funded the cash component by raising fresh equity of approximately US$460 million earlier this month.
S&P also cited expectations of continued earnings improvement, supported by new product introductions and favourable pharmaceutical sector trends. The agency noted that industry growth is expected to remain healthy through 2027, particularly in segments such as GLP-1 therapies as well as treatments for oncology and rare diseases.
The ratings firm further pointed to Biocon’s stated financial policy, noting management’s continued focus on restoring leverage levels to the period prior to its acquisition of Viatris’ biosimilars portfolio. In November 2022, Biocon acquired the biosimilars business of Viatris for US$3.3 billion, which raised the group’s debt-to-EBITDA ratio to around 7x in fiscal 2024 from approximately 2x in fiscal 2022.
S&P stated that the stable outlook reflects its assessment that Biocon’s earnings will grow steadily over the next 12 to 24 months, supported by continued international demand for generics and biosimilars as well as planned launches. This performance is expected to allow Biocon to maintain its improved financial profile.
Biocon Biologics is a fully integrated biosimilars company focused on expanding access to quality biological therapies. It serves over 6.3 million patients across more than 120 countries and has commercialised 10 biosimilars globally. The company has a pipeline of over 20 biosimilar assets across key therapy areas including diabetology, oncology, immunology, ophthalmology and bone health, and continues to advance ESG-focused initiatives aligned with the UN Sustainable Development Goals.
