Perrigo Company plc PRGO announced that the Irish Office of the Revenue Commissioners has issued a Notice of Amended Assessment for a tax liability of $1.9 billion (€1.636 billion) related to Elan Pharma, the entity which Perrigo acquired in 2013.
Shares of the company plunged almost 30% on Dec 21, following the news of such huge tax liability. Perrigo’s shares are down 57.5% so far this year compared with the industry’s decline of 9.2%.
The company is planning to file an appeal with the Irish revenue department. Perrigo strongly disagrees with the assessment and stated that no payment is required until all proceedings are complete. The proceedings are expected to take a few years to complete.
The notice from the Irish government stated that Elan Pharma is liable to pay the said tax amount related to the sale of Tysabri intellectual property and related assets to Biogen BIIB in 2013. Elan was eligible to receive an upfront payment and future contingent payments from Biogen, which were recognized as trading income attracting a taxrate of 12.5%.
However, the Irish revenue department stated in the notice that the sale related to Tysabri should be considered as chargeable gains subject to ahigher tax rate of 33%. This led to a massive tax bill for Perrigo.
Perrigo has asked the Irish revenue department for clarification and additional documents in support of the bill. However, the authority has communicated to Perrigo thatno further information will be provided related to this tax bill and the latter should file an appeal by Dec 28, 2018.
Perrigo Company plc Price
Perrigo Company plc Price | Perrigo Company plc Quote
Zacks Ranks & Stocks to Consider
Perrigo is a Zacks Rank #5 (Strong Sell) stock.
Some better-ranked stocks from the pharma space are Haemonetics Corporation HAE and AtriCure, Inc. ATRC, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .
Haemonetics’ earnings per share estimates have moved up from $2.28 to $2.33 for 2018 and from $2.96 to $3.04 for 2019 over the past 60 days. The company delivered a positive earnings surprise in three of the trailing four quarters, with the average beat being 21.27%.
AtriCure’s loss estimates have narrowed from 88 cents per share to 87 cents per share for 2018 and from 64 cents to 56 cents for 2019 over the past 60 days. The company delivered a positive earnings surprise in two of the trailing four quarters, with the average beat being 11.81%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
AtriCure, Inc. (ATRC) : Free Stock Analysis Report
Perrigo Company plc (PRGO) : Free Stock Analysis Report
Haemonetics Corporation (HAE) : Free Stock Analysis Report
Biogen Inc. (BIIB) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research