Pharmaceutical giant Elan received further bad news this morning when Standard & Poor (S&P) downgraded its credit rating as well all other ratings on the company and its affiliates.
This follows yesterday’s announcement Elan was to lay off 1,000 employees worldwide, including 330 in Ireland.
Elan's ratings had been placed on CreditWatch on July 2nd followed the filing of Elan's 2001 financial report. The report detailed previously undisclosed risk-sharing arrangements on a number of Elan's drugs and implied potentially substantial near-term cash outflows by the company for the repurchase of these rights, S&P said.
S&P said the new low speculative grade rating on the Irish-based company reflects the group's declining pharmaceutical sales prospects, significant upcoming debt maturities and other funding needs, as well as the uncertain value of its investment portfolio.
However, these fears are somewhat mitigated by Elan's still substantial cash position, S&P said.
It was announced yesterday Elan had net losses in the last quarter of $802 million compared to net income of $134.3 million for the second quarter of 2001.
The publication of its recovery plan, which followed the release of yesterday’s figures appears to have had little effect on the company’s position in the markets Elan is trading at 2.35, up 0.35.