The tax advantages of doing business in Ireland have been plumbed by a number of drugmakers, some of whom have moved their homes there to cut taxes, and so costs. Alexion ($ALXN), maker of orphan drug Soliris, is bagging some of that benefit by expanding operations there.
The Cheshire, CT-based company last year opened offices and labs in Dublin to expand its supply chain operations in Europe. Now the drugmaker is buying a vial-filling facility there and moving some intellectual property rights for Soliris and other compounds to Ireland. The results of all of this, CFO Vikas Sinha said during its recent earnings call, will be a tax rate that will run 10% to 11% on a non-GAAP basis before rising in 2016 to 16% to 18%.
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| Alexion CEO Leonard Bell--Courtesy of Alexion |
As for the new facilities in that country, Alexion CEO Leonard Bell disclosed its deal to buy a vial-filling facility during the earnings call but didn't say from whom, for how much or where it was. According to a transcript of the call from Seeking Alpha, Bell said only that it "will become Alexion's first company-owned vialing facility for Soliris and our other clinical and commercial products."
It turns out Alexion will buy two buildings that Irish drugmaker Alkermes ($ALKS) got with its 2011 acquisition of Elan's ($ELN) drug-delivery and manufacturing unit, according to Siliconrepublic.com. The buildings at a complex in Athlone have sat unused for a number of years. Alexion will reportedly have 40 people at the facility, adding to the 50 people it has in Dublin doing quality assurance, quality control and logistics for its supply chain expansion.
Ireland's superlow tax rate has attracted a number of drugmakers while also outraging the countries that were the losers in the relocations. Last year New Jersey-based Actavis ($ACT) bought Dublin-based Warner Chilcott ($WCRX), and Allegan, MI-based Perrigo ($PRGO) snapped up Ireland's Elan--taking on an Irish identity in the process. The backlash to some of the deals has been loud enough that Ireland last year indicated it might tighten the tax loophole that so many companies have passed through.
Alkermes made its own move to Ireland from Massachusetts with the Elan deal in 2011. Now it is expanding there. A spokesperson for the Dublin-based company told Siliconrepublic.com that the building sale will boost a €20 million ($27 million) project it has planned in Athlone. It intends to build up its R&D and manufacturing facility over the next three years. It didn't say how many jobs might be added but said it currently has about 400 employees at the facility. The modernization will allow it to produce new, more advanced product lines.
- read the Siliconrepublic.com story
- here's the Seeking Alpha transcript
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