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Fitch affirms Bristol-Myers' long-term issuer default rating; outlook stable

Fitch Ratings affirmed Bristol-Myers Squibb Co.'s long-term issuer default rating of A-.

The rating reflects expectations that the company will continue to generate significant free cash flow, retain its strong balance sheet and enact a conservative capital allocation strategy.

According to Fitch, Bristol-Myers should be able to manage the risk of generic and biosimilar competition over the next three years, during which about 28% of the company's sales will lose market exclusivity.

However, the company's arthritis drug Orencia, which makes up 12% of its total firm sales, is likely to undergo gradual market share losses once a biosimilar product is launched, possibly in 2019.

The rating agency noted the need for the U.S. pharma giant to diversify its product portfolio in terms of sales concentration as well as the establishment of a late-stage research and development pipeline.

The outlook on the rating is stable, meaning Fitch does not expect to take any further action at the time.