Biocon Biologics Credit Rating Upgraded to BB+ by S&P

Biocon Biologics, the fully integrated global biosimilars arm of Biocon, has received a credit rating upgrade from S&P Global Ratings, marking a key milestone in its balance sheet reset.

S&P has raised the company’s long-term issuer credit rating to ‘BB+’ from ‘BB’ and revised the outlook to “Stable.” The rating on senior secured notes issued by Biocon Biologics Global PLC has also been upgraded to ‘BB+.’

The upgrade follows Biocon’s recent equity issuance to settle compulsorily convertible preference shares (CCPS) issued to Viatris Inc. According to S&P, the move has helped simplify the company’s capital structure. “The company reduced its outstanding structured debt liabilities, and a US$1 billion CCPS issued to Viatris has now been removed through a mix of equity share swaps and cash consideration. Biocon funded the cash payout through fresh equity of about US$460 million that it raised earlier this month.”

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S&P also highlighted strong growth prospects for Biocon Biologics, citing new product launches and supportive industry trends. “New product launches and favorable industry trends will support Biocon's earnings. Pharmaceutical sector will continue to register healthy growth through 2027, especially for GLP-1s and treatment for oncology and rare diseases.”

Another key factor was financial discipline. “Biocon's management remains committed to reverting its balance sheet position to levels before its acquisition of Viatris' biosimilars portfolio.”

The Viatris acquisition, completed in November 2022 for US$3.3 billion, had pushed Biocon’s debt-to-EBITDA ratio to about 7x in fiscal 2024, compared with around 2x in fiscal 2022. The stable outlook reflects S&P’s expectation of steady earnings growth over the next 12 to 24 months, driven by rising global demand for generics and biosimilars and continued product launches.