Therapeutic Discovery Project: FAQs

BIO believes that the level of support provided by the TDP simply cannot meet the needs of the growing biotech field.
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What is the TDP?

In 2010, the Therapeutic Discovery Project (TDP) awarded $1 billion in tax credits to about 2,923 small biotechnology companies across the country to accelerate discovery of promising, cutting-edge cures to treat devastating diseases like cancer, heart disease, diabetes, and Alzheimer’s.   

BIO believes that the level of supportprovided by the TDP simply cannot meet the needs of the growing biotech field.  As evidence of the project’s popularity suggests, Congress should consider extending or expanding the project in order to support American innovation and speed the development of life-saving cures.

BIO supports the bill recently introduced by Representatives Susan A. Davis (D-CA) and Allyson Y. Schwartz (D-PA) – H.R. 1988, The Qualifying Therapeutic Discovery Project Tax Credit Extension Act of 2011 – that would extend the Therapeutic Discovery Project (see press releasehere, and our statementhere). The bill provides $1 billion in credits and grants for each fiscal year 2011 through 2017 for qualified investments made from 2009 through 2015.

How successful was the TDP?

Projects such as the TDP help American small biotech companies sustain or create high quality, high paying jobs by providing much-needed capital assistance that supports their work and their work force.

Capital formation challenges in the industry have forced many biotech companies to halt projects, lay off staff or shutdown all together. Our analysis shows that the industry is approximately one-quarter smaller than it was in 2008.

Companies need gap or bridge financing in the present economic environment to prevent the loss of innovation and scientific advancements that have the potential to lead to life saving cures and treatments. Furthermore, the biotech industry is a thriving sector employing 1.3 million Americans in high quality, high paying jobs and is an important growth engine for our economy.

How is eligibility determined? Are foreign companies eligible?

U.S.-based companies and subsidiaries that conducted their qualified investment activities in the U.S., like hiring U.S.-based scientists and researchers, were eligible.

If TDP were to be renewed, how should it differ from last year in terms of types of companies being funded, and what the funding should go for?

BIO strongly supports extending and expanding the Therapeutic Discovery Project.  Upon renewal, Congress should take steps to make TDP funding more impactful by ensuring that companies receive credits more in line with the high costs of groundbreaking therapeutic research. 

In addition, BIO plans to work closely with Congress and the regulatory agencies (Treasury/IRS and NIH) to ensure that any changes to the program promote scientific advancements with the greatest potential to lead to treatments and cures for life-threatening and debilitating diseases.

Should the TDP be extended?

BIO believes that the level of supportprovided by the TDP simply cannot meet the needs of the growing biotech field.  As evidence of the project’s popularity suggests, Congress should consider extending or expanding the project in order to support American innovation and speed the development of life-saving cures. 

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