Horizon Pharma plc. Moves To Ireland As Frustrated Lawmakers Look On
September 19, 2014
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
Democratic lawmakers are watching yet another biotech company’s tax revenues slip through their fingers today, after Horizon Pharma Inc. (HZNP) moved its corporate address to Ireland on Thursday.
Horizon made the move after it was acquired in a $660 million deal by Irish biotech Vidara Therapeutics International Ltd. Vidara is best known for a producing a drug that treats chronic granulomatous disease and severe, malignant osteopetrosis.
The Deerfield, Illinois-based specialty drugmaker’s move stymied efforts by Democrat to undo such moves retroactively, but could face the risk its relocation could be overturned by new legislation if a proposal passes that would overturn moves made for tax reason after May 8.
Horizon remained blase about such a possibility, however. “The probability of legislation being enacted to affect inversions is pretty close to zero, because you’ve got a divided Congress,” Robert Carey, Horizon’s chief business officer, told Bloomberg. “The legislation that’s being proposed right now is simply campaigning for the midterm elections.”
Thirteen large U.S. companies have gone abroad for better tax address since Jan. 1, 2012, in a wave of expatriations President Barack Obama has called an “unpatriotic tax loophole.” Eight more companies are in the pipeline to head abroad.
Democratic chairman of the Senate Finance Committee Ron Wyden (D-Ore.) has been pushing retroactive legislation to unwind such moves while Congress attempts to overhaul the nation’s tax code. The U.S. has the world’s highest income tax rate at 35 percent corporate and also applies that metric to reap gains on the foreign earnings of U.S. corporations.
But lawmakers said Thursday they remain divided on whether such a measure could pass, however.
Democrats had hoped to invert recent big-name moves since 2010 like Endo International Plc. to Ireland, Valeant Pharmaceuticals International Inc.’s flight to Canada and Actavis Plc (ACT)’s relocation to Dublin.