Reflection and Renewal: A Bright Horizon
2009 brought many challenges for the biotechnology industry, but proposed legislation and technology improvements leave industry leaders optimistic about 2010.
The recession essentially froze funding streams for startup firms, delaying projects and forcing layoffs and company closures. Indeed, a year-end poll of BIO SmartBrief readers shows that 42 percent of respondents see access to capital for R&D as the top issue the field faces. Though innovators still have difficulty obtaining investments, legislators have proposed steps to help foster the industry, notes BIO President and CEO Jim Greenwood.
For example, the Therapeutic Project Tax Credit would help research-intensive small businesses continue their pioneering projects. The amendment would create a tax credit for companies of 250 employees or fewer for their R&D activities, including hiring scientists and conducting clinical studies.
In healthcare legislation, an approval process for biosimilars will strike a balance between promoting patient safety and giving them access to innovative therapies, all while lowering costs and promoting continued innovation.
According to the SmartBrief poll, 32 percent of respondents view follow-on biologics’ path to approval as the industry’s greatest policy challenge in 2010. Next were the issues of intellectual property protection and of drug pricing and importation, which each drew 19 percent.
Dr. Stephen Sherwin, BIO board chairman and co-founder and chairman of Ceregene of San Diego, notes the regulatory pathway for biosimilars should be established on equal footing with the Hatch-Waxman pathway for approving generic pharmaceuticals. Under that system, the typical pharmaceutical company doesn’t face competition until 12 to 14 years after approval.
“We must be careful to preserve the intellectual property protections that support continued innovation,” says Sherwin. “The incentive to invest in developing a novel biologic therapy, diagnostic or vaccine is removed if novel therapy cannot recoup the substantial research and development capital invested.”
In formulating rules for the Renewable Fuel Standard, the Environmental Protection Agency recognized the contributions biotech makes to low-carbon biofuel production. Industrial biotech can reduce greenhouse gas emissions by increasing energy efficiency in industrial processes, displacing use of fossil resources, and creating a platform for sustainable production of manufactured goods.
“Implemented the right way, U.S. climate change legislation could incentivize the technology and provide a road map for further growth of a low-carbon, bio-based economy,” says Sherwin.
And in other good news for the industry, the Obama administration’s Global Hunger and Food Security Initiative increases investment in agricultural development.
“We know that science and technology are already providing solutions to the 12.3 million farmers using agricultural biotechnology today in developing countries,” Greenwood says. “In the future, biotech will be able to enhance the nutritional content of foods and improve human health through plant- and animal-produced therapies.”