S&P cuts Arbor Pharmaceuticals

S&P said it lowered its corporate credit rating on Arbor Pharmaceuticals Inc. to B+ from BB-. The outlook is negative.

At the same time, S&P lowered its senior secured issue-level rating on Arbor's revolving credit facility and term loan to B+ from BB and revised the recovery rating on this debt to 3 from 2, reflecting an expectation for meaningful (50%-70%; rounded estimate: 65%) recovery in the event of a payment default.

“The downgrade reflects earlier-than-expected generic competition in its legacy antibiotic products causing a steep decline in revenue and EBITDA in 2018. In addition, Arbor has seen other negative operational developments including a warning letter that delayed the launch of its generic business (suspension has since been lifted) and slightly lower-than-expected sales in key products like Sklice and Horizant,” S&P said in a news release.

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