...Multi-Factor Rating Approach: Fitch Ratings view s R&D pipeline and leverage as the main differentiating business and financial risk factors for European Big Pharma and Biotech issuers, attaching the highest importance to these tw o sub-factors in the Fitch Ratings Navigator for Pharmaceuticals. The R&D pipeline captures the need for innovation and the importance of R&D productivity in the pharma industry to develop a robust business risk profile and to compensate for the constant loss of patent protection in older drugs; leverage reflects the issuer's capital allocation, w here recently w e have seen significant corporate activity to support evolving business models, w hich have been mostly debt-funded, in addition to traditionally high shareholder returns. Recent Dow ngrades Widened Sector Rating Distribution: We view rating headroom across the sector as more comfortable follow ing a series of recent dow ngrades, w hich have spread the distribution of European pharma ratings: Roche Holding...
