U.S. Pharmaceutical Company to Move HQ to Ireland

Horizon Pharma Inc. will acquire Vidara Therapeutics for a "tax-efficient corporate structure."
3:00 | 03/19/14

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Transcript for U.S. Pharmaceutical Company to Move HQ to Ireland
And then -- -- new York and as my focus Wednesday march 19 this is story stuck in one stock with the story today. Rising pharma the maker of arthritis pain inflammatory disease treatments -- by Ireland's the -- therapeutics. For price tag of 660 million dollars headquarters of the company will now based in Ireland why they say quote. For a tax efficient corporate structure. So break it down by -- -- finance mr. task good afternoon to you. So how was the horizon farmers are doing today after the business acquisitions. And -- I -- it's doing incredibly well I mean this the stock jumps. -- -- point that he was up more than 15% it ended a little bit off its highs of the day but still up sharply. In otherwise dull and down mark did. And you said it all right there they're they're buying a company in instead of being punished for spending a lot of money as is typically the case and acquisition. They're rallying sharply because they're gonna get a better tax environment in Ireland they have currently. So here's a cut here's the back story -- company had reported losses in 2011 what's it gonna do than to its share books what's -- acquisition Coastr. -- other predicting revenue -- -- fifty through 65 million dollars for the current year after the acquisition gets done there are also taking on. 250 million dollars and a bridge loans -- -- -- mean dollars in debt so it's really kind of watch. On the revenue side but again it's all about the tax benefit that they're getting -- being Greece and Ireland. That's he's an analyst predictions that there are effective tax rate will go from the low 30% range to the -- 20% range. And when your corporation -- you you know in an individual. When you cut your -- by 10% you feel it. On the bottom line in a very beneficial way you're seeing stock market reward them for that today he and. Obviously investors like to see that as -- -- the savings that's potentially more money and their pocket. The other companies apple in particular have been accused of sort of exploiting any kind of tax loopholes because of re relocating kind of operations -- headquarters or anything overseas. Is this a bit -- Trenton reading to you see that a specialists as some of these lesser known companies. I think so we've actually artists and a couple of other deals. Ironically maybe Jack was -- enough in the health -- space repair go by Elan pharmaceutical that was a very big deal several billion dollars and -- health but -- So -- -- Irish -- companies being acquired by one Canadian and one American based company. In large part because again Ireland is -- tax. Some tax haven there -- taxes there but it's -- benefits it's designed to attract businesses with a lower corporate tax structure. And so I do think. Unless and until the US tax policy changes. You're gonna see more of this kind of activity -- and again this Ireland has set themselves up. To be and it you know attractive to corporations. In large part because of the -- tax rate to have there certainly Texas. In America in America saying hey our tax rates are learning Californians -- move your business here on a global in -- global economy corporations can theoretically move anywhere. A lot and are looking at. Taxes as a mean driver where they're going to be estimate tech industry -- -- were moving down as well because -- Little else does he let us a pharmaceutical though as an umbrella is an overall stock in this market isn't -- good -- is their movement in that direction. It's not a great that really -- a lot of the big pharmaceutical companies have become kind -- public utilities you want to own them. For the dividends they're paying in kind of the steady growth but the a lot of their blockbuster drugs are coming off patent. If it's a lot of competition from generic drug makers and when you're a farm she's -- Pfizer or Merck. And it takes a huge drug you know multi billion dollar drug to really move the needle. And they've only they've kind of gotten very big and lumbering and so. Most of the action. For the stock market -- in the -- attacks in the smaller companies where there's been tremendous gains. In the past years and he would say there's even if there is a bubble going on a Biotech stocks but for the big pharma stocks. It's been kind sleepy. Aren't errant astronaut who financed with today's story stock horizon Sparky and I -- -- much appreciate it thanks -- and of course you've been watching store stocks with abcnews.com. Headlines. And on -- Cutler New York.

This transcript has been automatically generated and may not be 100% accurate.

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