Q3 Earnings Alert! Plan early for this week’s stock reports with all key data in 1 placeSee list

Amgen must face lawsuit claiming it hid $10.7 billion tax bill

Published 09/30/2024, 05:13 PM
Updated 09/30/2024, 05:56 PM
© Reuters. FILE PHOTO: An Amgen sign is seen at the company's headquarters in Thousand Oaks, California, U.S., November 6, 2019. REUTERS/Deena Beasley/File Photo
AMGN
-

By Jonathan Stempel

NEW YORK (Reuters) -A federal judge said Amgen must face a proposed class action accusing the drugmaker of waiting too long to tell shareholders it might owe the Internal Revenue Service $10.7 billion for underreporting six years of taxes.

U.S. District Judge John Cronan in Manhattan ruled on Monday that shareholders plausibly alleged they were misled by Amgen's "reckless" concealing of its "enormous" potential tax liability.

Neither Amgen nor its lawyers immediately responded to requests for comment. Lawyers for shareholders led by the Detroit-based Roofers Local No. 149 Pension Fund did not immediately respond to similar requests.

Amgen's top-selling products include the osteoporosis treatment Prolia and the rheumatoid arthritis drug Enbrel.

The IRS accused Amgen of underreporting taxes from 2010 to 2015, mainly for attributing what should have been U.S. taxable income to a Puerto Rico unit that produces many of its drugs.

Though Puerto Rico is a U.S. territory, it is considered a foreign country for corporate tax purposes.

The roofers fund said Amgen's share price fell 6.5% on Aug. 4, 2021 and 4.3% on April 28, 2022 because the Thousand Oaks, California-based biotech company waited until then to disclose the tax risks.

In seeking a dismissal, Amgen said it "did not hide" the IRS' position, and had warned that the agency was becoming more aggressive in policing how companies allocated income and expenses among tax jurisdictions.

The judge said investors were "left in the dark" about the size of Amgen's potential payout, equal to one-sixth of its assets and more than its cash on hand.

Amgen's disclosures resembled "a child telling his parents that he had 'dessert' when in fact he had eaten the 'whole cake,'" Cronan wrote. "This court does not believe that analogy would have come out differently had the child described his treat as merely 'significant' or 'substantial.'"

© Reuters. FILE PHOTO: An Amgen sign is seen at the company's headquarters in Thousand Oaks, California, U.S., November 6, 2019. REUTERS/Deena Beasley/File Photo

In its latest quarterly report, Amgen maintained that the IRS case had no merit. A trial is scheduled for Nov. 4, court records show.

The case is In re Amgen Inc (NASDAQ:AMGN) Securities Litigation, U.S. District Court, Southern District of New York, No. 23-02138.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.