S&P downgrades Almirall

S&P said it lowered the long-term corporate credit rating on Almirall SA to BB- from BB.

The outlook is negative.

The downgrades follow the rapid decline of earnings in Almirall's U.S. dermatology franchise in the first half of the year and the group's earlier revision of its forecast earnings for 2017, S&P said.

Because of the challenging operating environment in the U.S. dermatology market, Almirall anticipates its total profits for the full year will drop by one-third, the agency said.

This is considered a sharp decrease in profitability, which will markedly constrain credit metrics, leading to a forecasted deterioration in Almirall's leverage to more than 3x in the next 18 to 24 months, S&P said.

Despite expectations of lower profitability and operating cash flow generation in 2017 and 2018, the agency said it believes the group will continue to seek acquisitions and contract further in-licensing agreements to replenish its pipeline, the agency said.

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