IRS seeks more than $7B in back tax­es and penal­ties from Am­gen for shift­ing prof­its to Puer­to Ri­co

The IRS is now go­ing af­ter both Bris­tol My­ers Squibb and Am­gen for dodg­ing bil­lions of dol­lars in tax­es by shift­ing cer­tain prof­its to Ire­land and Puer­to Ri­co, re­spec­tive­ly.

Am­gen re­vealed Wednes­day as part of its first quar­ter earn­ings re­port that ear­li­er this month the com­pa­ny re­ceived a no­tice from the IRS ques­tion­ing its al­lo­ca­tion of prof­its in the US and Puer­to Ri­co be­tween 2010 and 2015, po­ten­tial­ly short-chang­ing Un­cle Sam by more than $7 bil­lion.

“This [IRS] no­tice seeks to in­crease Am­gen’s U.S. tax­able in­come for the 2013-2015 pe­ri­od by an amount that would re­sult in ad­di­tion­al fed­er­al tax of ap­prox­i­mate­ly $5.1 bil­lion, plus in­ter­est. In ad­di­tion, the no­tice pro­pos­es penal­ties of ap­prox­i­mate­ly $2 bil­lion,” the com­pa­ny said in a state­ment, call­ing the penal­ties “whol­ly un­war­rant­ed.”

Ex­ecs said dur­ing Wednes­day’s in­vestor call that the com­pa­ny will vig­or­ous­ly con­test these IRS ad­just­ments in court.

Am­gen al­so said it thinks the to­tal owed is ex­ag­ger­at­ed, ex­plain­ing in a state­ment:

Am­gen be­lieves, based up­on the po­si­tions ad­vanced by the IRS, that the IRS ad­just­ments for the 2010-2015 pe­ri­od are over­stat­ed by ap­prox­i­mate­ly $2 bil­lion due to the IRS fail­ure to ac­count for cer­tain in­come and ex­pens­es. Am­gen has re­port­ed its in­come and ex­pens­es in a con­sis­tent man­ner for many years and the IRS has ap­pro­pri­ate­ly ac­count­ed for the Com­pa­ny’s in­come and ex­pens­es in all pri­or au­dits.

The com­pa­ny al­so said that it “firm­ly be­lieves” that the ad­just­ments and penal­ties pro­posed “are with­out mer­it,” par­tic­u­lar­ly as Puer­to Ri­co is the site of the com­pa­ny’s flag­ship man­u­fac­tur­ing com­plex re­spon­si­ble for the ma­jor­i­ty of Am­gen’s glob­al man­u­fac­tur­ing. And ad­di­tion­al tax­es that could be im­posed for the 2010-2015 pe­ri­od would be re­duced by up to about $3.1 bil­lion of repa­tri­a­tion tax pre­vi­ous­ly ac­crued with re­spect to the com­pa­ny’s Puer­to Ri­co earn­ings, Am­gen said.

The IRS is al­so cur­rent­ly au­dit­ing the 2016-2018 pe­ri­od, and Am­gen said it ex­pects the au­dit to con­tin­ue for sev­er­al years, pos­si­bly for even longer than a res­o­lu­tion is reached on this 2010-2015 dis­pute.

Pre­vi­ous­ly, the IRS went af­ter Bris­tol My­ers for mov­ing prof­its through a sub­sidiary in Ire­land. Ac­cord­ing to a New York Times re­port, BMS al­so con­test­ed the IRS claims, which amount­ed to al­le­ga­tions of cheat­ing the US out of about $1.4 bil­lion in tax­es.

Vas Narasimhan (Photographer: Jason Alden/Bloomberg via Getty Images)

No­var­tis de­tails plans to axe 8,000 staffers as Narasimhan be­gins sec­ond phase of a glob­al re­org

We now know the number of jobs coming under the axe at Novartis, and it isn’t small.

The pharma giant is confirming a report from Swiss newspaper Tages-Anzeiger that it is chopping 8,000 jobs out of its 108,000 global staffers. A large segment will hit right at company headquarters in Basel, as CEO Vas Narasimhan axes some 1,400 of a little more than 11,000  jobs in Switzerland.

The first phase of the work is almost done, the company says in a statement to Endpoints News. Now it’s on to phase two. In the statement, Novartis says:

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Sanofi to cut in­sulin prices for unin­sured from $99 to $35, match­ing the in­sulin cap com­ing through Con­gress

As the House-passed bill to cap the monthly price of insulin at $35 nationwide makes its way for a Senate vote soon, Sanofi announced Wednesday morning that beginning next month it will cut the monthly price of its insulins for uninsured Americans to $35, down from $99 previously.

The announcement from Sanofi, which allows the uninsured to buy one or multiple Sanofi insulins (Lantus, Insulin Glargine U-100, Toujeo, Admelog, and Apidra) at $35 for a 30-day supply effective July 1, follows House passage (232-193) of the monthly cap in March, with just 12 Republicans voting in favor of the measure.

How pre­pared is bio­phar­ma for the cy­ber dooms­day?

One of the largest cyberattacks in history happened on a Friday, Eric Perakslis distinctly remembers.

Perakslis, who was head of Takeda’s R&D Data Sciences Institute and visiting faculty at Harvard Medical School at the time, had spent that morning completing a review on cybersecurity for the British Medical Journal. Moments after he turned it in, he heard back from the editor: “Have you heard what’s going on right now?”

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Bob Nelsen (Lyell)

As bear mar­ket con­tin­ues to beat down biotech, ARCH clos­es a $3B ear­ly-stage fund

One of the biggest names in biotech investing has a whole lot of new money to spend.

ARCH Venture Partners closed its 12th venture fund early Wednesday morning, the firm said, bringing in almost $3 billion to invest in early-stage biotechs. The move comes about a year and a half after ARCH announced its previous fund, for almost $2 billion back in January 2021.

In a statement, ARCH managing director and co-founder Bob Nelsen appeared to brush off concerns about the broader market troubles, alluding to the downturn that’s seen several biotechs downsize and the XBI fall back to almost pre-pandemic levels.

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Lina Gugucheva, NewAmsterdam Pharma CBO

Phar­ma group bets up to $1B-plus on the PhI­II res­ur­rec­tion of a once dead-and-buried LDL drug

Close to 5 years after then-Amgen R&D chief Sean Harper tamped the last spade of dirt on the last broadly focused CETP cholesterol drug — burying their $300 million upfront and the few remaining hopes for the class with it — the therapy has been fully resurrected. And today, the NewAmsterdam Pharma crew that did the Lazarus treatment on obicetrapib is taking another big step on the comeback trail with a €1 billion-plus regional licensing deal, complete with close to $150 million in upfront cash.

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(AP Photo/Gemunu Amarasinghe)

Some phar­ma com­pa­nies promise to cov­er abor­tion-re­lat­ed trav­el costs — while oth­ers won't go that far yet

As the US Department of Health and Human Services promises to support the millions of women who would now need to cross state lines to receive a legal abortion, a handful of pharma companies have said they will pick up employees’ travel expenses.

GSK, Sanofi, Johnson & Johnson, BeiGene, Alnylam and Gilead have all committed to covering abortion-related travel expenses just four days after the Supreme Court overturned Roe v. Wade and revoked women’s constitutional right to an abortion.

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Aurobindo Pharma co-founders P. V. Ram Prasad Reddy (L) and K. Nityananda Reddy

Au­robindo Phar­ma re­ceives warn­ing let­ter from In­di­a's SEC fol­low­ing more FDA ques­tion marks

Indian-based generics manufacturer Aurobindo Pharma has been in the crosshairs of the FDA for several years now, but the company is also attracting attention from regulators within the subcontinent.

According to the Indian business news site Business Standard, a warning letter was sent to the company from the Securities Exchange Board of India, or SEBI.

The letter is related to disclosures made by the company on an ongoing FDA audit of the company’s Unit-1 API facility in Hyderabad, India as well as observations made by the US regulator between 2019 and 2022.

Bristol Myers Squibb (Alamy)

CVS re­sumes cov­er­age of block­buster blood thin­ner af­ter price drop fol­lows Jan­u­ary ex­clu­sion

Following some backlash from the American College of Cardiology and patients, Bristol Myers Squibb and Pfizer lowered the price of their blockbuster blood thinner Eliquis, thus ensuring that CVS Caremark would cover the drug after 6 months of it being off the major PBM’s formulary.

“Because we secured lower net costs for patients from negotiations with the drug manufacturer, Eliquis will be added back to our template formularies for the commercial segment effective July 1, 2022, and patient choices will be expanded,” CVS Health said in an emailed statement. “Anti-coagulant therapies are among the non-specialty products where we are seeing the fastest cost increases from drug manufacturers and we will continue to push back on unwarranted price increases.”

#Can­nes­Lions2022: Con­sumer health ex­ecs call on agen­cies to in­volve pa­tients in cre­ative process

CANNES — When Tamara Rogers joined GSK back in 2018, “science was king and R&D were the gods.” Now the global chief marketing officer of consumer healthcare wants to make room for another supreme being: the consumer.

As health and wellness becomes more relevant to consumers amid the pandemic, four health-focused executives called on marketers to involve patients in their creative process in a panel discussion at the Cannes Lions advertising creativity festival.

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