Barr Pharmaceuticals' 'BBB-' rating on negative watch after weak results - S&P

MUMBAI (Thomson Financial) - Standard & Poor's Ratings Services said it has placed generic drug maker Barr Pharmaceuticals Inc.'s 'BBB-' corporate credit rating on negative watch, following the company's announcement of disappointing earnings and lowered expectations for 2008.

S&P said the company's continued operating weakness may result in a ratings downgrade.

Barr experienced lower sales and pricing in both its oral contraceptive and non-oral contraceptive generic drug lines. Margins were also affected by lower sales of its high-margin proprietary product, Plan B, because of excess inventory in the wholesaler channel.

S&P said it believe there is a chance the company will return to stronger sales and earnings growth in the second half of 2008, given the fuller new product launch schedule that includes a generic version of the oral contraceptive Yasmin, and the possibility of Plan B sales rebounding once inventory is cleared.

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