WASHINGTON, D.C. (December 13, 2006) -- Biotechnology Industry Organization (BIO) President and CEO Jim Greenwood today commented on reports that the Securities and Exchange Commission (SEC) will begin the process of easing auditing standards for small, publicly traded companies. Earlier this year, a BIO-led coalition called for scaled reforms to Section 404 of Sarbanes-Oxley to provide smaller public companies relief from costly Section 404 requirements:
“I commend SEC Chairman Chris Cox and the Commissioners for recognizing that the present implementation of Sarbanes Oxley is not working. Relaxing these burdensome regulations is a welcome development that is long overdue. For years, small biotechnology companies have been suffocated by the onus of complying with the Sarbanes-Oxley (SOX) Act. Easing the regulations will enable biotech companies to invest in what they do best – developing new technologies that extend lives and alleviate suffering from horrible diseases that affect families across the world.
“Our companies typically have limited cash flow and revenue, as it often takes more than a decade to develop revolutionary new therapies to fight disease. Unfortunately, funds that could be invested in these new therapies may be spent complying with these overly imposing regulations.
“When I served in the Congress, I was deeply involved in the development of the SOX Act. While well-intended, the implementation of SOX has unintentionally caused more problems, particularly for small businesses, than it cleared up. I am hopeful that the expected principle-based reforms will achieve the original intent of Section 404 – establishing internal controls that provide investors with the optimal level of confidence in the financial integrity of a public company.
“We look forward to working with the SEC on the evaluation of this proposal and implementing a solution that recognizes the needs of emerging biotech companies.”
For more information on BIO’s call for Section 404 reforms, please go to http://www.bio.org/tax/sox/ .