GlaxoSmithKline may owe the IRS nearly $2 billion in back taxes, interest and penalties, the Wall Street Journal reported Friday. The back taxes are a result of “earnings stripping,” a practice multinational companies use to “reduce taxes by claiming interest deductions for payments to a related unit overseas,” the WSJ reported. GSK paid the IRS $3.4 billion in 2006, to end litigation over whether its US operations paid its UK-based parent too much for drugs, which lowered its taxes.
Johnson & Johnson announced that it will acquire Cougar Biotechnology for $893 million, or $43 per share. Based in Los Angeles, Cougar Biotech is primarily focused on oncology products, and is currently developing several products for prostate cancer, breast cancer, and other kinds of cancer. Although Cougar doesn't currently have any products on the market, J&J hopes the company's lead candidate, abiraterone acetate (CB7630), now in phase III trials for prostate cancer – will gain an FDA approval by late 2010. Cougar will become part of J&J's Ortho Biotech Oncology Research & Development division.