Business Corpus: Pharma Stock Rebounds As Deadline To Appeal $1.9 Billion Tax Bill NearsPerrigo stock rebounded Wednesday as the deadline to appeal a $1.86 billion Irish tax bill approached. News of that bill sent Perrigo stock tumbling nearly 30% last Friday and Monday. The post Pharma Stock Rebounds As Deadline To Appeal $1.9 Billion Tax Bill Nears appeared first on Investor's Business Daily.

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Perrigo (PRGO) rebounded Wednesday as the deadline to appeal a $1.86 billion Irish tax bill approached. News of that bill sent Perrigo stock tumbling nearly 30% last week.

On the stock market today, Perrigo stock jumped 11.5% to 40.70 in higher-than-average volume.

The pharmaceutical company has until Friday to appeal the tax bill.

"Perrigo strongly disagrees with this assessment and believes that the (notice of amended assessment) is without merit and incorrect as a matter of law," Perrigo said in a filing last week with the Securities and Exchange Commission.

Tax Bill Stems From 2013 Acquisition, Sale

In April 2013, a company called Elan Pharma sold its multiple sclerosis drug Tysabri to Biogen (BIIB). Biogen made an upfront payment and agreed to future contingent payments. These were listed as trading income in Elan Pharma's tax returns.

Perrigo acquired Elan in December 2013. In October 2018, the Irish government sent an audit letter saying the Elan intellectual property was listed incorrectly in Perrigo's taxes. Therefore, the sales should have been subject to a 33% tax rate, rather than the 12.5% trading income rate.

The pharmaceutical company disagreed with the Irish government's assessment in an SEC filing. Perrigo doesn't expect the tax bill to have a material impact on its financial position or results for the quarter ending Dec. 31.

"However, while Perrigo believes its position to be correct, there can be no assurance of an ultimate favorable outcome, and if the matter is ultimately resolved unfavorably it would have a material adverse impact on Perrigo, including liquidity and capital resources," the firm said.

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