Pozen will buy Canada’s Tribute Pharmaceuticals for US$146 million, reports indicate. The US-based specialty drug manufacturer Pozen announced on Monday, June 8 that it has reached an agreement with the Canadian-based Tribute Pharmaceuticals in a deal that could cost Pozan about US$146 million.
This is a big move for Pozen and one that is expected to further enhance the company’s global image. The deal is expected to be completed in the fourth quarter.
Soon after the deal is finalized, Pozen is expected to change its name to Aralez Pharmaceuticals PLC. Interestingly, the company even plans to move its headquarters from the United States to Ireland. Apparently, Ireland has much lower corporate tax rates compared to the U.S. which could benefit the company going forward.
Asked whether such a move was feasible and how it would affect Aralez, experts explained that it is indeed a very shrewd move. The tactic is referred to as corporate inversion and has been exercised by several large corporates in the past to lower tax rates.
However, the U.S. government and other affected parties aren’t very happy. The Obama administration, in particular, has come out criticizing the move. Congress too has expressed its disappointment. In a bid to stop or discourage other companies from following in the footprints of the big companies that have turned to corporate inversion to escape the high tax rates in the U.S., the Treasury is expected to move swiftly to enact rules to limit potential benefits of such moves.
Meanwhile, Pozen, currently based in Chapel Hill, N.C., insists that the company will proceed with its plans without delay. The company also plans to pursue further acquisitions after receiving more than $350 million from a group of investors. The investment groups include Deerfield Management and QLT Inc. among others.
Pozen recently struggled to get its cardiovascular drug approved but has since been busy on the financial front. The two companies (Pozen and Tribute) reported about US$50 million in combined revenue for the 2014 financial year from several products including the cardiovascular drug Fibricor, pain drugs Vimovo and Treximet, and migraine and tension headache drug Cambia.
We can only wait to see what happens and how the proposed merger turns out. For pharmaceutical merchants, you can even prepare for bigger business by getting a pharmacy merchant account from emerchantbroker.com because if the new company can get a tax relief as mooted, then probably the cost of some drugs may reduce leading to more sales.