And this boosts Actavis in different ways, starting with cash flow, according to analysts.
FORBES: Actavis Execs May Love NJ, But Ireland Has Lower Taxes
Actavis, Inc ( NYSE: ACT) saw new options begin trading today, for the July expiration.
AstraZeneca settled a lawsuit that claimed Actavis violated the patent on its best-selling Crestor cholesterol pill.
FORBES: AstraZeneca & A Pay-To-Delay Deal The FTC Would Not Like
The FTC called the deal anticompetitive and sued Watson, now called Actavis Inc.
Sigurdur Olafsson, chief executive of Actavis, an Icelandic generics firm, says that as a former Pfizer man he remains sceptical.
As such, by acquiring Warner Chilcott, Actavis has voted with its feet and enhanced its own ambitions of diversification away from the generics market.
"By doing what the FTC wants, you're going to hurt consumers rather than help them, " said Paul Bisaro, CEO of Actavis of Parsippany, N.
Actavis executives, however, will likely continue paying some US income taxes.
FORBES: Actavis Execs May Love NJ, But Ireland Has Lower Taxes
Actavis leadership, including CEO Paul Bisaro, will lead the larger company.
FORBES: Actavis Uses Surging Stock To Snap Up Warner-Chilcott For $5B Plus Debt
The deal requires approval from a three-fourths majority of Warner Chilcott shareholders and the Irish High Court, as well as clearance from a majority of Actavis shareholders.
FORBES: Actavis Uses Surging Stock To Snap Up Warner-Chilcott For $5B Plus Debt
There was some excitement that Actavis could be acquired by either Valeant or Mylan and thus trigger a wave of additional larger-scale combinations focused on the generic space.
This year, for instance, Actavis can expect to pay roughly 28 percent in corporate taxes, but by reincorporating in Ireland, its tax rate will drop to about 17 percent.
FORBES: Actavis Execs May Love NJ, But Ireland Has Lower Taxes
Lastly, the leaders of three generic companies, Actavis, Biocon, and Cipla were rewarded for doing what was long dismissed as impossible: building profitable companies by selling medicines at cut-rate prices.
Pfizer reached a settlement that enabled Actavis and a second company to sell slightly cheaper generic versions starting Nov. 30, 2011 and several other generic drugmakers to begin selling generic Lipitor six months later.
The FDA approved generic versions of both dosage strengths from a few generic drug companies: Teva Pharmaceuticals (manufactured by Impax Laboratories and marketed by Teva Pharmaceuticals), Anchen, Actavis, Watson Pharmaceuticals and Mylan Pharmaceuticals.
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Just as the US Supreme Court hears arguments about the veracity of so-called pay-to-delay agreements, a newly inked deal between AstraZeneca and Actavis that could generate regulatory scrutiny, depending, of course, on what the Supreme Court decides.
FORBES: AstraZeneca & A Pay-To-Delay Deal The FTC Would Not Like
Among the largest underlying components of UPRO, in trading today Actavis, Inc ( NYSE: ACT) is up about 0.2%, ADT Corp ( NYSE: ADT) is trading flat, and Advanced Micro Devices, Inc. ( NYSE: AMD) is up by about 0.8%.
Although individual tax strategies were not disclosed, Actavis chief executive Paul Bisaro told analysts during a conference call this morning that the senior management team is not moving to Ireland, because they are content with existing offices in Parsippany, New Jersey.
FORBES: Actavis Execs May Love NJ, But Ireland Has Lower Taxes
If course, a lot of upside could potentially be left on the table if ACT shares really soar, which is why looking at the trailing twelve month trading history for Actavis, Inc, as well as studying the business fundamentals becomes important.
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