Fitch lowers GlaxoSmithKline view to negative

Fitch Ratings said it affirmed GlaxoSmithKline plc’s long-term issuer default rating and senior unsecured rating at A+.

The outlook was revised to negative from stable.

Fitch also said it affirmed the senior unsecured rating of A+ for the debt issued under GlaxoSmithKline Capital plc.

The negative outlook encapsulates an expectation of increasing financial risks as expressed by weakening forward-looking debt protection ratios, partly mitigated by the enhanced business risk profile as the group’s strategy focuses increasingly on consumer health, Fitch said.

Additional concerns stem from near-term pressures on revenues and profitability, driven by competitive pressures affecting its top selling respiratory drug, execution risk around the enlarged consumer health division, some negative pipeline news flow in 2014 and shareholder friendly policies, the agency said.

The ratings also consider the company’s strong market position within the pharmaceutical industry, wide geographical and product diversification, manageable patent expiry profile and a satisfactory research and development pipeline, Fitch said.

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