S&P ups Watson outlook to stable

Standard & Poor's said it revised its outlook on Watson Pharmaceuticals Inc. to stable from negative, including the BBB- corporate credit rating.

At the same time, the agency said that it affirmed the ratings on Watson, adding that the actions reflect Watson's solid position in the growing generic drug industry, an improving product pipeline and strengthening financial profile.

According to S&P, the low investment-grade rating on Watson reflects its solid position in the highly competitive generic industry, diverse portfolio of high-margin franchises and moderate financial policies while these factors are partially offset by the continued high level of competition in the generics industry, challenges faced in resolving non-compliance issues at its acquired Andrx manufacturing site and potential competition to its high-margin iron replacement therapy franchise.

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