Shares in pharma giant Perrigo rose more than 10 per cent at one point in New York on Wednesday, just ahead of the deadline for appealing its €1.64 billion Irish tax assessment.
The company’s stock has been under pressure since it emerged that Revenue here was pursuing it for back taxes relating to the sale in 2013 of rights to the company’s blockbuster multiple sclerosis drug Tysabri.
The shares lost nearly 30 per cent of their value in on Tuesday in Tel Aviv, where the stock is also listed. This followed a similar drop in New York last week.
But the shares rallied in New York on Wednesday, opening up 2 per cent in early trading and were up more than 10 per cent at $40 by midday.
Perrigo, which acquired Irish pharma group Elan in late 2013, has signalled its intention to appeal the decision to the Tax Appeals Commission, the deadline for which falls on December 28th.
“Perrigo will timely appeal the NoA [notice of amended assessment] and will pursue all available administrative and judicial avenues as may be necessary or appropriate,” it said in a filing to the stock market last week.
Exploiting
The Perrigo filing to the US regulator – the Securities and Exchange Commission – said its treatment of the transaction in the 2013 tax return was “consistent with Elan Pharma’s activities for two decades relating to the active management of intellectual property rights, which includes acquiring, developing, holding, exploiting, dealing in and disposing of intellectual property rights for use in the pharmaceutical industry”.
Redomiciled
It added that Revenue had, until now, never questioned this interpretation. The €1.64 billion figure does not include any interest or penalties that Revenue may add to the original bill. The company redomiciled in Ireland as part of a tax inversion move, a corporate restructuring in which it relocated its headquarters to Ireland from the US.
The move was part of its acquisition of Irish company Elan, which had originally developed Tysabri.
Perrigo told investors at the time that the redomiciling would reduce its tax bill. The Perrigo dispute comes in the wake of the European Commission's ruling that Apple owes Ireland €13 billion in back taxes.
