Research Update: Alkermes PLC Outlook Revised To Stable From Negative; Ratings Affirmed

Ireland-based biopharmaceutical company Alkermes PLC is refinancing its term loan due in 2023 ($275 million outstanding) with a new $300 million senior secured term loan maturing in 2026. Operating performance during fiscal 2020 exceeded our previous expectation, despite COVID-19-related headwinds, contributing to positive free operating cash flow (FOCF) of about $40 million. We now expect adjusted leverage of about 4x and FOCF of about $30 million for 2021, which compares favorably to our previous forecast, reducing the likelihood of a downgrade. As a result, we are affirming our 'BB-' issuer credit rating on Alkermes and revising the outlook to stable from negative. At the same time, we are assigning our 'BB' issue-level rating and '2' recovery rating to the proposed

... PLC is refinancing its term loan due in 2023 ($275 million outstanding) with a new $300 million senior secured term loan maturing in 2026. - Operating performance during fiscal 2020 exceeded our previous expectation, despite COVID-19-related headwinds, contributing to positive free operating cash flow (FOCF) of about $40 million. - We now expect adjusted leverage of about 4x and FOCF of about $30 million for 2021, which compares favorably to our previous forecast, reducing the likelihood of a downgrade. - As a result, we are affirming our '##-' issuer credit rating on Alkermes and revising the outlook to stable from negative. At the same time, we are assigning our '##' issue-level rating and '2' recovery rating to the proposed $300 million term loan B. - The stable outlook reflects our expectation for mid- to high-single-digit percent revenue growth and continued cost management, supporting adjusted FOCF to debt of at least 5% over the...

Research Update