Moody's affirms Sanford Burnham Prebys' A1 rating

Conrad Prebys Center for Chemical Genomics with a bronze statue of a scientist in front

Moody's Investors Service has affirmed Sanford Burnham Prebys Medical Discovery Institute's (CA) A1 revenue bond rating. The institute had approximately $44 million of total debt outstanding as of June 30, 2022. The outlook is stable.

Ratings rationale

The affirmation of Sanford Burnham Preby's A1 rating reflects the institute's important role as a premier medical research institution and National Cancer Institute designated cancer center. The institute continues to benefit from strong philanthropic support, a steady grant pipeline, and good industry partnerships that support its research profile.

Updated strategic plans to focus on basic biomedical research strength and a reduced emphasis on late-stage drug discovery will make philanthropic support and healthy grant revenue even more important in the coming years. The recognition of a large gift over the next three fiscal years will provide the institute with the resources for a substantial expansion of its research staff and scale.

A highly competitive environment for research funding and high-quality researchers has contributed to fluctuating operating performance in recent years, but good financial management and planning will continue to support credit quality as it executes on its strategic investments. Most of the institute's reserves are unrestricted, providing excellent liquidity and operational flexibility. Minimal capital needs, no additional borrowing plans, and steady debt amortization will further strengthen the Institute's already low financial leverage.

Rating outlook

The stable outlook incorporates Moody's expectations of positive operating results as gift revenue is released over the next three fiscal years. It also incorporates expectations of continued excellent liquidity and the successful implementation of the strategic plan. 

This post was adapted from a press release published by Moody's Analytics.

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