Amgen Sued For Concealing $10.7-B Tax Bill From Investors
Amgen Inc. has been sued in a proposed class action accusing the drugmaker of waiting too long to tell investors it might owe the Internal Revenue Service $10.7 billion in taxes and penalties.
Photo Insert: The IRS has accused Amgen of underreporting taxes from 2010 to 2015.
In a complaint filed in Manhattan federal court, a Detroit-based pension fund said Amgen artificially inflated its stock price by concealing the dispute over its international tax strategy between July 2020 and April 2022.
The IRS has accused Amgen of underreporting taxes from 2010 to 2015, mainly for attributing what should have been US taxable income to a Puerto Rico unit that houses its main manufacturing business and produces many of its drugs.
Though Puerto Rico is a U.S. territory, it is considered a foreign country for corporate tax purposes. Amgen's top-selling product is the arthritis drug Enbrel, Jonathan Stempel reported for Reuters.
The plaintiff, Roofers Local No. 149 Pension Fund, said Amgen's share price fell 6.5% on Aug. 4, 2021, and 4.3% on April 28, 2022, because the company waited until those dates to disclose its potential liabilities.
"Defendants failed to take any meaningful accrual or otherwise reveal the staggering amount of back taxes and penalties claimed by the US government," causing shareholder losses when the truth was revealed, the fund said.