Moody's Assigns B3 Ratings to Neuraxpharm's New Debt Facility

Strategic Insights -

Neuraxpharm, a pan-European specialist in CNS disorders, has obtained a new EUR668.7 million senior secured term loan and a EUR100 million revolving credit facility from Moody's Investors Service. The ratings agency has assigned B3 ratings to the new debt, citing the company's weak credit metrics and high leverage. However, Moody's expects Neuraxpharm's credit metrics to improve over the next 12-18 months, driven by the successful rollout of its new product Briumvi and a reduction in non-recurring items.

Key Takeaways:

  • Neuraxpharm's B3 rating reflects its weak credit metrics, including high leverage and negative free cash flow, with Moody's-adjusted gross debt/EBITDA projected to remain above 7x in 2025.
  • The company's revenue is expected to grow in the low double-digits in percentage terms over the next 12-18 months, driven by the rollout of Briumvi and its existing product portfolio.
  • Neuraxpharm's liquidity is good, supported by a cash balance of EUR84 million and access to the new EUR100 million RCF due June 2030, which is expected to be undrawn.
  • The company's next significant maturities are the new RCF due in June 2030 and the new term loans due in December 2030.
  • The stable outlook reflects Moody's expectation that Neuraxpharm will execute well on its rollout of Briumvi and technical transfers related to recent acquisitions, which will support earnings growth and organic leverage reduction.
  • Failure to significantly reduce non-recurring items and show evidence of credit metrics improvement already in 2025 would likely result in a change of outlook to negative.
  • Upward rating momentum could develop if Neuraxpharm maintains good operating performance and successfully rolls out its new products, allowing its Moody's-adjusted gross leverage to decline below 5.5x on a sustained basis.

Statistics:

  • Neuraxpharm's Moody's-adjusted gross debt/EBITDA is projected to remain above 7x in 2025.
  • The company's revenue is expected to grow in the low double-digits in percentage terms over the next 12-18 months.
  • Neuraxpharm's cash balance is EUR84 million as of 31 March 2025.
  • The new EUR100 million RCF due June 2030 is expected to be undrawn.
  • The company's next significant maturities are the new RCF due in June 2030 and the new term loans due in December 2030.

Sources:

  • Moody's Investors Service, "Moody's Assigns B3 Ratings to Neuraxpharm's New EUR668.7 Million Senior Secured Term Loan and EUR100 Million Revolving Credit Facility", 2025.
  • Moody's Investors Service, "Pharmaceuticals", November 2021, available at https://ratings.moodys.com/rmc-documents/356413.