Biotechnology company Amgen has agreed to a $74 million settlement to resolve a shareholder lawsuit that accused the firm of taking too long to reveal it could owe the Internal Revenue Service $10.7 billion in unpaid taxes.
Court documents filed late Monday in Manhattan federal court show the preliminary settlement is part of a proposed class action case and still needs a judge’s approval before it takes effect.
Despite agreeing to the settlement, Amgen denied any wrongdoing. The company said Tuesday that it continues to believe the claims brought against it lack merit.
At the heart of the dispute, the IRS alleged that Amgen underpaid its federal taxes from 2010 through 2015. Regulators say the company improperly routed profits to a Puerto Rico division that manufactured many of its pharmaceutical products. For corporate tax purposes, Puerto Rico is treated as a foreign country, even though it is a U.S. territory.
The IRS is seeking $8.7 billion in back taxes and interest, along with an additional $2 billion in penalties. Those demands stem from what tax authorities describe as improper transfer pricing practices by the company.
Amgen has indicated that a ruling from the U.S. Tax Court could arrive sometime this year.
The shareholder lawsuit was led by the Asbestos Workers Philadelphia Pension Fund. The plaintiffs argued that Amgen’s stock dropped 6.5% on August 4, 2021, and another 4.3% on April 28, 2022, because the Thousand Oaks, California-based company waited until those dates to publicly disclose the extent of its tax exposure.
The settlement applies to Amgen shareholders who held stock between July 29, 2020, and April 27, 2022.
A federal judge had previously denied Amgen’s attempt to have the case thrown out in September 2024.
Among Amgen’s best-selling medications are Prolia, used to treat osteoporosis, and Repatha, prescribed for cardiovascular conditions and high cholesterol.
