Biotechs Giving Uncle Sam the Shaft

As they say in real estate: location, location, location.

Biotechs have been acquiring companies in large part for their address. Specifically, they're buying so they can move to places like Ireland, where taxes are substantially lower than in the U.S.

This month Horizon Pharma (NASDAQ: HZNP  ) bought privately held Vidara Therapeutics in a $600 million stock and cash deal. Last year, Actavis (NYSE: ACT  ) bought Warner Chilcott for $5 billion in an all-stock deal. Elan managed to use its address to attract two companies to its Irish homeland. Alkermes (NASDAQ: ALKS  ) bought Elan's drug delivery segment, while Perrigo (NYSE: PRGO  ) bought the rest, which included royalties from the sales of Biogen Idec's Tysabri, which it helped develop.

In the following video, Fool contributor Brian Orelli and health-care bureau chief Max Macaluso discuss the strategy and highlight a couple of potential takeout targets, including Alkermes and Jazz Pharmaceuticals (NASDAQ: JAZZ  ) .

Here's a tax advantage for you
Recent tax increases have affected nearly every American taxpayer. But with the right planning, you can take steps to take control of your taxes and potentially even lower your tax bill. In our brand-new special report "The IRS Is Daring You to Make This Investment Now!," you'll learn about the simple strategy to take advantage of a little-known IRS rule. Don't miss out on advice that could help you cut taxes for decades to come. Click here to learn more.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2897544, ~/Articles/ArticleHandler.aspx, 9/1/2014 5:44:04 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement