S&P revises ANI outlook to positive

S&P said it revised its outlook for ANI Pharmaceuticals Inc. to positive from stable and affirmed its B+ ratings.

ANI Pharmaceuticals is scoring stronger-than-expected sales growth in 2023, from both its purified cotrophin gel and its generics pharmaceuticals business. “This is compounded by substantial margin expansion, related to operating leverage improvements following the launch, leading to rapid deleveraging to 3.4x for the last 12 months through June 30, 2023, from 7.8x (gross leverage) in 2022. This level of leverage is strong for the rating,” S&P said in a press release.

The improved outlook reflects the company’s low leverage. “We see the potential for an upgrade if the company demonstrates a commitment to sustaining S&P Global Ratings-adjusted debt leverage below 3.5x. We estimate the company has capacity for about $200 million for merger and acquisition (M&A) spending (consisting of $50 million of incremental debt and $150 million of balance sheet cash, ignoring any acquired EBITDA) at the BB- rating and about $400 million at the B+ rating,” S&P noted.

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