BIO Praises House of Representatives for Passing H.R. 701
Washington, D.C. (May 16, 2013) – The Biotechnology Industry Organization (BIO) today lauds the House of Representatives for passing H.R. 701, a bill to speed the implementation of a key capital formation provision in the Jumpstart Our Business Startups (JOBS) Act. H.R. 701 was introduced by Rep. Patrick McHenry (R-NC) and passed the House by a vote of 416-6.
H.R. 701 will give the U.S. Securities and Exchange Commission (SEC) a deadline to complete rulemaking on the reforms to Regulation A, authorized by the JOBS Act. The JOBS Act passed both houses of Congress last year with broad, bipartisan majorities, but the ongoing delay at the SEC has blunted the potential capital formation impact of the law at a time when research-intensive small businesses are in dire need of funding for their innovative R&D. The changes to Regulation A are designed to spur fundraising for growing companies, including emerging biotech companies.
Jim Greenwood, BIO’s President and CEO, made the following statement:
“BIO applauds Rep. McHenry and the House of Representatives for passing this important legislation. Emerging biotechs often have no product revenue to support their research and must therefore turn to private investors to fund the search for breakthrough medicines.
“The changes to Regulation A mandated by the JOBS Act will, once implemented, open up a new source of capital for innovative, R&D-focused companies as they strive toward the next generation of treatments and cures.
“BIO supports expeditious implementation of the JOBS Act and thanks the House for taking this important step to ensure that growing companies can fund their lifesaving R&D.
“Before the JOBS Act was enacted, Regulation A allowed companies to conduct direct public offerings of up to $5 million; the JOBS Act increased the offering limit to $50 million. But this change is meaningless until itis implemented by the SEC.
“Once this change is implemented, Regulation A will spur fundraising for emerging biotech companies, for which a $50 million capital influx could support groundbreaking research and stimulate job creation.”
For more information on the biotech industry and emerging companies in particular, please visit www.bio.org.