IRS Notice Pushes Perrigo's Potential Tax Debt From Move To Ireland Close To $3bn
IRS tax assessment for 2013, the year Perrigo acquired Dublin-based Elan, adds another cloud to OTC private label giant's outlook as it prepares to present plans for accelerating growth for its long-slumping consumer health business in the US and Europe at a March 9 investor day conference. Perrigo shares dropped more than 9% in early trading after IRS notice became known to investors before inching upward and ending at $47.92, down 6.8% from the previous day's close.
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Perrigo "walked away a little bit" from "a model that worked beautifully," says CEO Murray Kessler at investor conference, "In essence, all we've done over the last year is to put back in place the model that worked so well."
Even though consumer health products and Rx generics manufacturer reported $92.2m net Q3 income after losing $67.5m a year ago, investors apparently reacted more strongly to its latest tax dispute. Its share price closed down 6.7% at $50.51 on trading at twice the stock's average volume.
"A foundation of this business has been," says Perrigo's Americas consumer business chief, Jeffrey Needham, "we are a fast follower. That's been our traditional model. We can't afford to do that going forward." In addition to initiating moving ingredients from Rx to OTC, firm is developing "national better brand" versions of drugs already available OTC.