Warner Chilcott Ltd. (NASDAQ:WCRX)

CAPS Rating: 4 out of 5

The Company is a specialty pharmaceutical company that develops, manufactures, markets and sells branded prescription pharmaceutical products focused on two therapeutic categories: women's healthcare and dermatology.

Recs

1
Player Avatar greenwave3 (< 20) Submitted: 8/24/2009 9:16:06 PM : Underperform Start Price: $11.26 WCRX Score: -2.22

I can't imagine how Moody's affirmed WCRX's credit ratings to complete the PG Pharma purchase. They borrowed the entire amount to finance the deal, and it increased the company's debt from $800 million to $3.9 billion. I understand that the acquisition is "accretive", but they are on the clock to deliver new products when their existing patents expire in a few short years. WCRX is going to be busy servicing debt for a long time, and somewhere in their budget they better plan to do the R&D necessary to take their business forward.
I would estimate that they've bitten off more than they can safely chew.

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