VALEANT PHARMACEUTICALS INTL INC T.VRX

moody's

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---------------- Moody's affirms Valeant's Ba3 ratings - The rating outlook remains stable - New York,

---------------- Moody's affirms Valeant's Ba3 ratings - The rating outlook remains stable
The rating outlook is stable, reflecting Moody's expectations for solid earnings growth and steady deleveraging absent any large acquisitions.

Valeant's Ba3 Corporate Family Rating reflects its good scale in the global pharmaceutical industry with annual revenue above $10 billion, its strong diversity, its high profit margins, and its good cash flow. The ratings are also supported by low exposure to patent cliffs, good near-term organic growth, and a successful acquisition track record. Recent product launches like Jublia (antifungal), Xifaxan for irritable bowel syndrome, and Addyi for female sexual dysfunction will drive incremental growth. However, the rating also reflects the risks associated with an aggressive acquisition strategy, including moderately high financial leverage (Moody's estimates pro forma gross debt/EBITDA of 5.5x as of September 30, 2015), integration risks, rapid capital structure changes, and reliance on cost synergies. In addition, Valeant is confronting significant scrutiny on its pricing practices, including those on products acquired through acquisitions, new scrutiny on its dealings with specialty pharmaceutical distributors, as well as government investigations. While volume growth heading into 2016 looks solid, strong organic growth over a multi-year period is less certain given moderating price increases in the US market and any potential changes in product distribution practices-