S&P puts Barr Pharmaceuticals on credit watchlist

S&P placed the company's 'BBB-' corporate credit rating on its watchlist "with negative implications" and described its first-quarter earnings and lowered 2008 outlook as "disappointing". The lower medium grade rating is just one notch above junk status.

The ratings agency noted that Barr had lower sales and pricing in both its oral and non-oral contraceptive drug lines. Excess inventory also affected sales of its 'Plan B' product.

Standard & Poor's credit analyst Arthur Wong said there is a chance the company will return to stronger sales and earnings in the second half of 2008 with new product launches and the possibility of Plan B sales rebounding.

Shares of Montvale, N.J.-based Barr rose 97 cents, or 2.6 percent, to $39.07 in afternoon trading. They have traded in the last year between $37.40 and $58.38.