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Biocon Biologics Outlook Boosted by Parent's Stronger Finances
7 Feb
Summary
- Fitch Ratings revised Biocon Biologics' outlook to Positive from Stable.
- Parent company Biocon Limited's improving financial metrics drive the upgrade.
- Biocon Biologics holds significant market share in US and European biosimilars.
Fitch Ratings has elevated Biocon Biologics Limited's (BBL) outlook to Positive from Stable, affirming its Long-Term Foreign-Currency Issuer Default Rating at 'BB-'. This revision is primarily driven by the strengthening financial metrics of its parent, Biocon Limited (BL).
The Positive Outlook signifies Fitch's anticipation of a sustained decrease in BL's financial leverage. This is expected following the repayment of liabilities using proceeds from a significant equity issuance completed in January 2026. Fitch forecasts BL's EBITDA net leverage to fall below 4.0 times in FY26, aiming for below 3.0 times.
BBL possesses a competitive standing in the global biosimilars arena, bolstered by robust R&D and in-house manufacturing. The company holds substantial market shares in the US for key products like trastuzumab and insulin glargine, and ranks among top sellers in Europe.
However, Fitch acknowledges regulatory challenges, including potential delays in approvals and the impact of evolving US drug pricing policies. Liquidity remains adequate, though larger debt maturities, like the $800 million bond due in October 2029, will necessitate refinancing.
Fitch's forecast does not incorporate further adverse effects from US tariffs or drug pricing policies. Any sustained negative developments in these areas could impede deleveraging and impact BBL's credit profile.
