(Reuters) - Allergan Plc (AGN.N) Chief Executive Brent Saunders said on Wednesday he does not anticipate U.S. tax reforms this year and that an import tax could hurt the Dublin-based drugmaker.
President Donald Trump and the Republicans are pushing for a tax reform that will likely reduce tax rates and could include a border-adjustment measure that could satisfy Trump’s interest in promoting U.S. manufacturing by taxing imports while exempting export revenues from corporate taxation.
“There’s no real plan yet for what tax reform will look like nor when it will appear,” Saunders said on call with analysts after the company reported a strong fourth quarter and forecast an upbeat 2017, helped by key products and new launches.
House Speaker Paul Ryan said last week that House Republicans are unlikely to begin tackling tax reform legislation until the summer, focusing first on revamping the healthcare system.
But even if tax reforms are implemented, they will not adversely impact Allergan’s dealmaking, executives said, adding that a tax overhaul could actually benefit the company’s large U.S. business.
The Botox-maker’s shares rose as much as 2.6 percent to $238.74 in morning trading.
Saunders, one of the first pharma leaders to oppose Trump’s immigration ban, also said on Wednesday that he was optimistic that the new administration was against over-regulation.
He has also spearheaded efforts toward drug pricing transparency, pledging in September to limit Allergan’s increases to 10 percent annually, amid intensifying political and regulatory scrutiny into sharp price increases.
Allergan said on Wednesday it raised the price of certain U.S. branded products by an average 6.7 percent, effective January.
Since Allergan’s $160 billion merger with Pfizer Inc (PFE.N) collapsed in April, Saunders has orchestrated a flurry of “stepping-stone” deals, including the recent $2.9 billion purchase of regenerative medicine company LifeCell Corp.
Allergan forecast adjusted 2017 revenue well ahead of Street expectations, after saying last month that it was taking “realistic” approach to 2017, in context of disappointing third-quarter performance, largely due to unanticipated declines in sales of older products.
The company’s fourth-quarter profit and revenue both topped estimates.
The “solid” fourth quarter and bright 2017 forecast should allow investors to take a pause and begin to analyze the Allergan growth story in its entirety, Cowen & Co analyst Ken Cacciatore said.
Saunders also highlighted the prospects of Allergan’s six “star” programs, including those for uterine fibroids and migraine, which have either entered late-stage trials or are set to.
These drugs represent a potential $6 billion to $9 billion in future revenue contribution, Cacciatore said.
Reporting by Natalie Grover in Bengaluru; Editing by Sriraj Kalluvila