S&P ups BioMarin outlook to stable, rates convertibles CCC

Standard & Poor's said it revised its outlook for BioMarin Pharmaceutical Inc. to stable from negative.

At the same time, S&P said it affirmed its B- corporate credit rating on BioMarin and assigned its CCC rating to the company's $325 million senior subordinated convertible notes due 2017.

"The action reflects the company's improving operating performance due to growing sales of Naglazyme and its much-strengthened liquidity position following the recent issuance of its senior subordinated convertible notes," explained S&P credit analyst Arthur Wong.

The speculative-grade rating on BioMarin reflects the company's expected continuing operating losses and significant cash consumption over the intermediate term, primarily due to increasing R&D expenditures and marketing costs and its narrow product portfolio, the agency said, adding that partially offsetting the impact of increased operating expenses are growing sales of its major products, Aldurazyme and Naglazyme, as well as the company's more-than-adequate liquidity provided by its significant on-hand cash.

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