Washington, D.C. (April 5, 2012) – The Biotechnology Industry Organization expressed strong support for the signing of the Jumpstart Our Business Startups (JOBS) Act into law today.
“I was honored to witness the signing of the JOBS Act into law. This legislation will make the pathway to capital formation more attainable for small biotechnology companies, encouraging American innovation by removing bureaucratic hurdles,” stated BIO President and CEO Jim Greenwood.
The JOBS Act creates an “on-ramp” to the public market for emerging growth companies, allowing them five years to focus on conducting critical research that can lead to new therapies and cures before having to divert funds to address bureaucratic hurdles that cause unnecessary delays.
Through the JOBS Act, emerging companies will be exempt for their first five years on the public market from the compliance burdens of Sarbanes-Oxley (SOX) Section 404(b), which studies by the U.S. Securities and Exchange Commission (SEC) estimate cost companies up to $2 million per year. The Act will also ease private fundraising through an expansion of the eligibility requirements for SEC Regulation A offerings and broaden the investor base by reforming the SEC private shareholder limit and SEC Regulation D.
“This law will incentivize and encourage capital formation for small, emerging biotechnology companies that do not yet have products on the market,” Greenwood stated. “By allowing companies to focus their limited funds on research rather than on compliance, it will speed the development of new cures and treatments for patients living with debilitating diseases such as cancer, diabetes, Parkinson’s, and HIV/AIDS.”
“The American biotechnology industry thanks the Congress and President Obama for the enactment of the JOBS Act,” concluded Greenwood.