S&P Global upgrades Biocon Biologics credit rating to BB+

New Delhi: Biocon Biologics Limited, a fully integrated global biosimilars company and a subsidiary of Biocon Ltd., has announced that S&P Global Ratings has upgraded its long-term issuer credit rating to ‘BB+’ from ‘BB’, while revising 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 the compulsorily convertible preference shares (CCPS) issued to Viatris Inc.

In its rating action rationale, S&P Global noted that Biocon has significantly simplified its capital structure by reducing outstanding structured debt liabilities. The US$1 billion CCPS issued to Viatris has been eliminated through a combination of equity share swaps and cash consideration, with the cash component funded through a fresh equity raise of about US$460 million earlier this month.

S&P further highlighted that new product launches, along with favourable industry trends, are expected to support Biocon’s earnings. The pharmaceutical sector is projected to register healthy growth through 2027, driven particularly by GLP-1 therapies as well as treatments for oncology and rare diseases.

The rating agency also underscored that Biocon’s financial policy continues to underpin its credit strength. Management remains focused on restoring the balance sheet to levels seen prior to the acquisition of Viatris’ biosimilars portfolio in November 2022. That US$3.3 billion acquisition had increased the group’s debt-to-EBITDA ratio to around 7x in fiscal 2024 from about 2x in fiscal 2022.

According to S&P, the stable outlook reflects its expectation that Biocon’s earnings will grow steadily over the next 12 to 24 months, supported by rising demand for generics and biosimilars in key international markets and continued new product launches, enabling the company to sustain its improved financial position.