WASHINGTON, D.C. (March 15, 2007) -- The biotechnology industry, hard-hit by the complex and burdensome regulations imposed by Section 404 of the Sarbanes-Oxley Act of 2002 (SOX), supports Congressional legislation that aims to alleviate some of the law’s most onerous compliance provisions. In letters sent this week to Representative Gregory Meeks (D-NY) and Senator Jim DeMint (R-SC), sponsors of the “Compete Act of 2007,” BIO President & CEO Jim Greenwood lauded the bill as an important first step toward making needed modifications.
“To date, the implementation of Section 404 has imposed large and unnecessary costs on smaller public companies, with little or no corresponding benefit to investors.” Greenwood wrote. “This means redirecting funds from research and development, delaying cutting-edge research into the therapies and cures of tomorrow, in order to cover the costs of auditing fees.”
The Compete Act of 2007, H.R. 1508, was introduced this week in the U.S. House by Reps. Meeks, Tom Feeney (R-NY) and Pete Sessions (R-Texas) and has 26 co-sponsors. U.S. Senators DeMint and Mel Martinez (R-FL) introduced companion legislation, S. 869. This legislation would reduce some of the financial burdens that have been put on small to mid-cap businesses as part of attesting to the soundness of their internal control functions. Copies of the letters can be found at http://www.bio.org/tax/sox/ .
BIO has appealed to the Securities and Exchange Commission (SEC) and the Public Company Accounting Oversight Board (PCAOB), both of which are proposing rule changes to SOX. In comments submitted to the SEC and PCAOB last month on the proposed changes, BIO called on the two agencies to work together to provide adjustments that are consistent and based on a quantitative cost-benefit analysis. These comments can be accessed at http://www.bio.org/tax/sox/20070226.pdf .
“We are pleased that Congress and the SEC are listening to the voices of smaller companies like ours in the biotechnology industry,” Greenwood said. “We are hopeful that the proposed changes being considered by Congress and the agencies will allow biotech companies to spend more time and resources on their true mission of developing technologies and therapies that improve health care, expand our food supply and provide new sources of energy.”