Amgen has agreed to a $74 million settlement with investors who allege that the company hid a massive U.S. tax bill from the public.
Failure to disclose the bill, which comes to $10.7 billion in unpaid taxes and potential penalties to the U.S. Internal Revenue Service, kept Amgen’s share price artificially high between July 29, 2020, and April 27, 2022, the investors claimed.
The motion for approval of the settlement was filed Monday night with Judge John Cronin in federal court in the Southern District of New York. In October of 2024, Cronin denied a bid by Amgen to dismiss the case, writing that because of the “sheer size of the potential liability,” investors deserved a “greater degree of clarity.”
“We continue to believe that the claims in this case are without merit and the settlement includes no admission of liability or wrongdoing,” a company spokesperson wrote in an email. “We agreed to settle the case because we believe it is in the best interests of Amgen and our shareholders. Continuing the litigation would have been time-consuming, costly and distracting to our mission to serve patients.”
Amgen still faces the consequences of the related tax fight that is working its way through the courts. It revolves around a dispute over costs and profits tied to the company’s Puerto Rico manufacturing outfit. The IRS argues that Amgen offloaded tens of billions of dollars in profits to its Puerto Rico subsidiary over the years, in turn dodging billions in taxes.
In April of 2022, Amgen revealed in a financial disclosure that it received a notice of deficiency from the IRS centered on the 2013 to 2015 period. The agency sought to increase Amgen's taxable income for the period to an amount that would leave the company with a $5.1 billion bill, plus interest. On top of that, the IRS proposed penalties of approximately $2 billion.
This news came on top of a similar notification Amgen received from the IRS for the 2010 to 2012 period. In that case, the IRS handed Amgen a $3.6 billion bill. The IRS also is auditing Amgen’s tax records from the period of 2016 to 2018.
Amgen has said that the IRS position “fails to adequately account for the importance” of its large Puerto Rico manufacturing unit and that the proposed IRS adjustments are overstated by approximately $2 billion.