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Amgen settles lawsuit over alleged $10.7 billion tax risk
The proposed class action settlement requires a judge’s approval and covers shareholders from July 29, 2020 to April 27, 2022.
Amgen reached a $74 million settlement in a lawsuit that accused the biotechnology company of delaying disclosure of a potential $10.7 billion tax bill tied to allegations of underreporting over six years, according to Insurance Journal. A preliminary settlement of the proposed class action was filed in Manhattan federal court and will require judicial approval.
The IRS accused Amgen of underpaying taxes between 2010 and 2015, including claims that profits were improperly shifted to a Puerto Rico unit under transfer pricing practices. Puerto Rico is treated as a foreign jurisdiction for corporate tax purposes despite being a U.S. territory, the article said.
The IRS sought $8.7 billion in back taxes plus interest and $2 billion in penalties. Shareholders led by the Asbestos Workers Philadelphia Pension Fund argued Amgen’s stock declined after the company disclosed its tax risks, with drops cited on August 4, 2021 and April 28, 2022.
Amgen denied wrongdoing and said it still believes the claims lack merit. The settlement covers shareholders from July 29, 2020 through April 27, 2022, the article noted, and the company’s top-selling products include Prolia and Repatha.