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BIO Applauds the Securities and Exchange Commission for Finalizing Tick Size Pilot Program

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Program will improve liquidity and enhance capital formation for emerging biotech companies</p>

Washington, DC, May 7, 2015 – Today, the Biotechnology Industry Organization (BIO) praises the Securities and Exchange Commission (SEC) for approving a proposal by the national securities exchanges and the Financial Industry Regulatory Authority (FINRA) for a two-year pilot program that would widen the minimum quoting and trading increments for stocks of some smaller companies. Under current SEC rules, all securities on the public market are priced in $0.01 increments known as “tick sizes.” The switch to the standard tick size of a penny was enacted in 2000 in order to boost trading in large company stocks, but many smaller issuers have experienced the opposite effect. The pilot program will test the impact of a $0.05 tick on certain small companies in order to spur trading activity in their stock. BIO believes that the pilot will increase the liquidity and capital availability necessary for emerging biotech companies to be successful on the public market. The following statement can be attributed to Jim Greenwood, BIO’s President and CEO: “A robust public market is vital to the success of the biotech industry and the development of lifesaving treatments for patients. When effective, the markets provide innovation capital through an IPO, stimulate a liquid and profitable trading environment for investors, offer growing companies important leverage in M&A negotiations, and create an exit for early-stage venture capitalists. “The current one-size-fits-all tick size does not reflect the realities of the market and subjects smaller issuers to the same trading framework as large, multinational companies with exponentially higher trading volumes and market caps. Allowing small companies to trade at a tick size that better fits their liquidity needs will stimulate capital formation and help to spur breakthrough research and development focused on the most devastating and debilitating diseases. “We support an effective tick size pilot program that will enhance small company liquidity, stimulate job creation, and maintain the vital role that public financing plays in the ongoing search for lifesaving therapies. “We look forward to working with the SEC to implement the pilot so that it will spur capital availability, company growth, and next generation research among emerging biotech companies.” This pilot program builds on the success of the Jumpstart Our Business Startups (JOBS) Act by increasing liquidity for emerging companies, including biotech innovators, that trade on the public market. The JOBS Act has been successful in stimulating IPO activity for biotech small businesses. Since its passage, more than 150 biotech companies have gone public using the IPO On-Ramp. Once on the public market, these companies depend on strong liquidity to help raise the capital necessary to fund the decade-long, billion-dollar development timeline intrinsic to groundbreaking R&D. BIO has been a strong advocate for tick size flexibility, and provided comment on the proposal that the SEC approved yesterday. The pilot program will begin on May 16, 2016. For more information on emerging biotech companies, please visit http://www.bio.org/ecs. For more information on the pilot program, please check out the SEC press release with text of the full plan here: http://www.sec.gov/news/pressrelease/2015-82.html.