Amgen Faces Shareholder Lawsuit Over $10.7 Billion Tax Disclosure Delay
A federal judge ruled that Amgen must face a class action lawsuit for allegedly delaying disclosure of a $10.7 billion potential tax liability. Shareholders claim the biotech giant's omission was "reckless."
Amgen Inc, a leading biotechnology company, is confronting legal challenges as a federal judge determined it must address a proposed class action lawsuit. The litigation stems from allegations that the company delayed informing shareholders about a potential $10.7 billion tax liability to the Internal Revenue Service (IRS).
U.S. District Judge John Cronan, presiding in Manhattan, issued a ruling on September 25, 2023, stating that shareholders had presented plausible claims regarding Amgen's alleged concealment of the true extent of its potential tax obligations. Judge Cronan characterized the company's omission as "reckless" given the circumstances.
This legal development highlights the ongoing scrutiny of corporate communication practices, particularly concerning significant financial risks. Amgen, founded in 1980 and headquartered in Thousand Oaks, California, has established itself as one of the world's largest independent biotechnology firms. The company's journey from its first FDA-approved product, Epogen, in 1989 to its current global presence in over 100 countries underscores its significant role in the biotech industry.
While Amgen has achieved numerous milestones, including the development of successful drugs like Enbrel and strategic acquisitions such as the $13.4 billion purchase of Otezla's global rights in 2019, it has also faced various challenges. The company has been involved in patent disputes, faced criticism over drug pricing, and encountered regulatory scrutiny regarding marketing practices.
The current lawsuit adds to the complex landscape Amgen navigates. As a pioneer in biologic medicines and a substantial investor in research and development, the company's financial disclosures are of paramount importance to shareholders. The alleged delay in communicating the potential $10.7 billion tax liability raises questions about transparency and risk management practices.
It's worth noting that Amgen has been a NASDAQ-listed company since 1983 and a member of the S&P 500 index since 1992, underscoring its significance in the financial markets. The company's extensive operations, including manufacturing facilities in Puerto Rico and a global footprint, contribute to its complex financial structure.
As the legal proceedings unfold, this case may have implications not only for Amgen but also for corporate disclosure practices in the broader biotechnology and pharmaceutical sectors. The outcome could potentially influence how companies communicate significant financial risks to their shareholders in the future.
While Amgen continues to be recognized for its innovative products, corporate practices, and sustainability efforts, this lawsuit serves as a reminder of the ongoing challenges faced by large corporations in balancing growth, innovation, and transparent communication with stakeholders.
