Tax reforms to drive $2.5bn US expansion for AbbVie
While presenting AbbVie’s end of year results last week, CEO Richard Gonzalez said changes in the US tax landscape give the firm access to overseas funds which it plans to pump into its US network.
“The recent passage of US tax reform enables more efficient access to our foreign cash and the ability to deploy it in the United States,” he told stakeholders.
Gonzalez was referring to the ‘Tax Cuts and Jobs Act,’ signed into law by president Donald Trump on December 22.
“Over the next five years, we plan to invest roughly $2.5bn in capital within the US and are currently evaluating additional expansion of our US facilities.”
A spokesperson from the company could not add any details at this time on AbbVie’s investment plans when contacted by this publication.
Slashed corporate rates and repatriated cash
The Act overhauls the US tax system and is expected to be a boon for industry due in part to the slashing of corporate tax rates from a top level of 35% to 21%.
It also makes it affordable for US firms to repatriate cash held overseas, which in the case of fellow Big Pharma firm Johnson & Johnson could be as much as $16bn.
AbbVie did not reveal a total, but Gonzalez said: “With tax reform, we have access to that cash in a much more efficient way than we did previously. So it gives us more flexibility to be able to deal with that cash appropriately.”
US Manufacturing network
AbbVie has five manufacturing sites in the US and another two in US dependency Puerto Rico. These are: Abbott Park, Illinois; Barceloneta, Puerto Rico; Jayuya, Puerto Rico; North Chicago, Illinois; South San Francisco, California; Worcester, Massachusetts; Wyandotte, Michigan.
The firm also has seven US R&D facilities located in Illinois, California, and Massachusetts, and one distribution centre.
Any large expansions in these facilities would shift a change from recent investments overseas. The firm announced a $139m expansion of its biomanufacturing facility in Sligo, Ireland earlier this month, and opened a $320 site in Singapore in October last year.
For the full year 2017, AbbVie reported sales of $28.2bn up 10% year-on-year, with $18.4bn coming from its top-selling monoclonal antibody Humira (adalimumab).
