S&P lowers GlaxoSmithKline to negative

S&P said it revised the outlook on GlaxoSmithKline plc to negative from stable.

The agency also said it affirmed the company's A+ long-term and A-1 short-term issuer credit ratings, along with the ratings on its debt.

The outlook revision follows GlaxoSmithKline's agreement to acquire biopharmaceutical company Tesaro and highlights the negative effect of the acquisition on its leverage, S&P said.

Although the agency said it expects GlaxoSmithKline to de-leverage to less than 3x at year-end 2018, S&P believes the acquisition could push the group's leverage to higher than 3x again in 2019.

The acquisition of Tesaro signals the company's renewed ambitions in the key oncology franchise, which the group had almost exited in 2015 after an asset swap with Novartis AG, the agency explained.

The company's business risk profile is considered excellent with a very strong uptake of the group's shingles vaccines and the continuous expansion of the group's two major HIV drugs, S&P said.

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