Report : Fitch downgrades Bristol-Myers over debt

Fitch Ratings downgraded Bristol-Myers Squibb Co. by one notch, highlighting concerns about the pharmaceutical company's recent spending plans for acquisitions and share buybacks, which could increase the company's borrowing
Bristol-Myers's investment-grade rating was lowered to A from A-plus, placing it five notches above junk-level territory
The outlook is negative
Earlier this week, Bristol-Myers agreed to buy diabetes-drug maker Amylin Pharmaceuticals Inc. (AMLN) for $5.3 billion, giving Bristol more heft in a fast-growing market
Last week, Bristol's board added $3 billion to its share-repurchase program
The company last authorized a $3 billion buyback program in May 2010, of which about $340 million is untapped
Fitch said it expects aggressive share-repurchase activity that, when coupled with recent acquisition costs, should drive up the company's debt load
Adding to Fitch's concerns, the rating company said patents on Bristol's two top-selling drugs--Plavix and Avapro--recently expired, with the loss of sales to new generic equivalents likely to weaken sales for this and next year
Fitch added that Bristol still maintains strong liquidity, which should provide flexibility for the company
Bristol's research-and-development efforts have been relatively productive in recent years, including last year's launch of skin-cancer drug Yervoy. Bristol hopes to keep the momentum going this year, as it works on Eliquis, a proposed new treatment co-developed with Pfizer Inc. (PFE) to prevent strokes in people with a heart-rhythm disorder that analysts believe has multi-billion-dollar sales potential
Bristol also is developing potential new treatments for hepatitis C that have shown promise in clinical testing
The company in April said its first-quarter profit improved, as rising sales of cancer drugs helped offset a decline in Plavix, an anti-clogging drug