Inversion pushback won't scare Horizon Pharma out of Ireland move

Who's afraid of a tax-inversion crackdown? Not Illinois-based Horizon Pharma ($HZNP), which plans to move its corporate address to Ireland today.

If legislation submitted recently by congressional Democrats becomes law, Horizon will be forced to remain a U.S. corporation for tax purposes--despite its $660 million buyout of tax-advantaged Vidara Therapeutics.

But as Horizon's chief business officer, Robert Carey, told Bloomberg, the probability of that legislation being enacted to affect inversions is "pretty close to zero."

"You've got a divided Congress," he said. "The legislation that's being proposed right now is simply campaigning for the midterm elections.

Other pharma execs have expressed similar views--including Endo ($ENDP) CEO Rajiv De Silva, whose company in February completed its own tax move with a buyout of Dublin-based Paladin Labs. "Our belief is that ultimately the thing that would resolve this current conundrum is comprehensive U.S. tax reform," he said last month on a call with analysts. "We continue to believe that this is a very complex matter and will likely take time to implement."

Unlike Endo and the other 12 U.S. companies that have inverted since Jan. 1, 2012, Horizon would be threatened by the bill from Representative Sander Levin (D-MI) were it to become law; it affects only companies that have inverted after May 8.

But Democrats are hoping their inversion pushback will also stem the tide of tax-centered acquisitions from here on out--and so far, it may be working in some cases. As Reuters reported earlier this month, Illinois-based Hospira's ($HSP) talks to buy the medical nutrition unit of French company Danone have stalled, and pressure from Dick Durbin, a senior senator from the company's home state, may have something to do with it.

Other potential dealmakers, however, appear undeterred; last week, Pfizer ($PFE) execs told Bernstein Research analyst Tim Anderson that the drug giant was pushing full steam ahead to snag a tax break--whether or not rumored target AstraZeneca ($AZN) is willing to play ball.

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