Fitch revises Novartis to negative

Fitch Ratings said it revised Novartis AG's outlook to negative from stable and affirmed its long-term issuer default rating and senior secured rating at AA and short-term issuer default rating at F1+.

The agency also affirmed the AA unsecured rating of the notes issued by Novartis Finance SA, Novartis Capital Corp. and Novartis Securities Investments Ltd., all guaranteed by Novartis AG.

“The negative outlook assigned to Novartis' AA rating reflects its weakening credit ratios, driven by the recent pressure on sales growth and profitability coupled with investment in restructuring the Alcon division, as well as generous shareholder returns,” Fitch said in a news release.

“In its pharma business, Novartis is currently experiencing a period of falling sales due to patent expiries and increasing pricing pressure, which at present cannot fully be compensated by new product launches.”

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