News Summary
Celgene Corp. has filed an appeal with the Pennsylvania Commonwealth Court to reassess its corporate net income tax return for 2019, contesting $112.9 million from Otezla sales. The board previously ruled that Celgene could not include these proceeds in its tax calculations, citing insufficient evidence of profit or loss. With increasing competition from Bristol Myers Squibb’s Sotyktu and declining sales, the outcome of this appeal could significantly impact the biopharmaceutical landscape and corporate tax strategies.
Pennsylvania – Celgene Corp. has officially filed an appeal with the Pennsylvania Commonwealth Court to reassess its corporate net income tax return for the year 2019. Central to this appeal is a contested amount of $112.9 million, derived from the sales of its psoriasis and arthritis medication, Otezla. The biopharmaceutical company challenges the state Board of Finance and Revenue’s earlier decision, which denied the inclusion of this substantial figure in their tax calculations.
The Board’s previous ruling concluded that Celgene lacked sufficient evidence to justify that the proceeds from Otezla sales should factor into their total sales for accounting purposes. The board argued that these proceeds did not lead to any measurable profit or loss, thereby disqualifying them from consideration for apportionment in the company’s tax obligations.
Otezla is recognized for its role in treating plaque psoriasis, particularly notable for being an oral treatment in a market where injectable medications predominantly prevail. This distinction positions Otezla as a significant alternative, although it has faced increasing competition, particularly from Bristol Myers Squibb’s innovative TYK2 inhibitor, deucravacitinib, which has performed better in recent head-to-head trials.
Amgen, which acquired Otezla from Celgene for a staggering $13.4 billion in 2019, anticipated robust performance from the drug, drawing from historical sales data. However, Amgen’s recent earnings report has revealed challenges, including a 1% decline in Otezla sales, retreating to $476 million, a stark difference from the $582 million expected by analysts. Overall, Amgen’s financial performance for the first quarter of this year showcased a decline, with total sales at $5.9 billion, marking a 4% decrease compared to the previous year. Additionally, earnings per share dropped 12% to $3.70, falling short of the projected $4.04.
The biopharmaceutical landscape for Otezla is increasingly competitive, with the recent announcement of Bristol Myers’ plans to launch its competing product, Sotyktu, perceived as a direct threat to Otezla’s market share. Other products within Amgen’s portfolio also demonstrated underwhelming sales performance, including 20% declines for Enbrel and 21% for Neulasta.
Despite these struggles, Amgen maintains optimism regarding the potential for Otezla, particularly in its appeal to a broad spectrum of psoriasis patients and its user-friendly administration for dermatologists. The biopharmaceutical sector is concurrently witnessing a consolidation of private biotech investment, with a noticeable shift towards fewer large acquisitions and a preference for funding rounds exceeding $100 million.
The outcome of Celgene’s appeal could have significant implications not only for the company but also for the broader industry landscape, emphasizing the importance of tax policy in corporate strategies within the biopharmaceutical sector. Stakeholders will be closely monitoring developments from the Pennsylvania Commonwealth Court as they may reshape expectations surrounding Otezla’s economic prospects and corporate tax frameworks.
Deeper Dive: News & Info About This Topic
- Bloomberg Tax: Celgene Appeals Pennsylvania Tax
- Wikipedia: Celgene
- Fierce Pharma: Amgen Earnings Report
- Google Search: Amgen earnings report
- BioPharma Dive: Amgen Wins Otezla Patent Appeal
- Encyclopedia Britannica: Otezla
- Business Wire: Celgene Fourth Quarter Results
- Google News: Celgene financial results
- MarketWatch: Amgen Buys Otezla
- Google Scholar: Biopharmaceutical Tax Policy
Author: STAFF HERE PHILADELPHIA WRITER
PHILADELPHIA STAFF WRITER The PHILADELPHIA STAFF WRITER represents the experienced team at HEREPhiladelphia.com, your go-to source for actionable local news and information in Philadelphia, Philadelphia County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Mummers Parade, Philadelphia Flower Show, and Thanksgiving Day Parade. Our coverage extends to key organizations like the Greater Philadelphia Chamber of Commerce and United Way of Greater Philadelphia, plus leading businesses in telecommunications, food services, and healthcare that power the local economy such as Comcast, Aramark, and Children's Hospital of Philadelphia. As part of the broader HERE network, we provide comprehensive, credible insights into Pennsylvania's dynamic landscape.
