By Jonathan Stempel
NEW YORK, July 21 (Reuters) – Amgen reached a $74 million settlement of a lawsuit accusing the biotechnology company of waiting too long to disclose that it might owe the Internal Revenue Service $10.7 billion for underreporting six years of taxes.
A preliminary settlement of the proposed class action was filed late Monday in Manhattan federal court and requires a judge’s approval.
Amgen denied wrongdoing, and on Tuesday said it still believed the claims lacked merit.
The IRS accused Amgen of underpaying taxes between 2010 and 2015, mainly for improperly shifting profits to a Puerto Rico unit that made many of its drugs. Puerto Rico is considered a foreign country for corporate tax purposes, despite being a U.S. territory.
The IRS sought $8.7 billion in back taxes plus interest, as well as $2 billion of penalties, stemming from Amgen’s so-called transfer pricing practices.
Amgen has said that a decision from the U.S. Tax Court could come this year.
Shareholders led by the Asbestos Workers Philadelphia Pension Fund said Amgen’s share price fell 6.5% on August 4, 2021, and 4.3% on April 28, 2022, because the Thousand Oaks, California-based company waited until then to disclose its tax risks.
The settlement covers Amgen shareholders between July 29, 2020, and April 27, 2022.
A federal judge rejected Amgen’s bid to dismiss the case in September 2024.
Amgen’s top-selling products include the osteoporosis treatment Prolia and the drug Repatha for cardiovascular events and hyperlipidemia.
(Reporting by Jonathan Stempel in New York; Editing by Mark Porter)
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