BIO Praises Introduction of the High Technology Small Business Research Incentives Act
Washington, D.C. (September 25, 2012) – The Biotechnology Industry Organization (BIO) applauds Sens. Robert Menendez (D-NJ) and Olympia Snowe (R-ME) and Reps. Jim Gerlach (R-PA) and Richard Neal (D-MA) for introducing the High Technology Small Business Research Incentives Act (H.R. 6559/S.3595).
Biotech companies are working every day to solve the greatest challenges facing our society — whether it’s finding a cure for cancer, protecting against bio-terror threats, or creating renewable energy and renewable chemicals.
Biotech R&D is a particularly high-risk undertaking because of the substantial start-up costs, lengthy experimentation period, and possibility that the technology will not prove viable. The legislation would make it more attractive to invest in biotech and other high tech industries.
Under the proposal, biotech companies would be able to enter into joint ventures with investors, who could then utilize the losses and tax credits of an R&D project. The bill would apply to entities that devote a significant percentage of their expenses to R&D, have fewer than 250 employees, and have less than $150 million in gross assets. It is important to note that this legislation does not create any new tax incentives.
BIO’s President and CEO Jim Greenwood made the following statement:
“Biotechnology is a leading force for innovation in America - and innovation is key for our economic health and prosperity. Today, our small companies face significant hurdles to raise early stage capital. Every step we take to increase investment could provide important capital for groundbreaking biotech R&D projects.
“Through the tax code, Congress historically has provided opportunities that encourage private investment in pre-revenue, R&D-intensive companies. The early growth of the biotech industry in the 1980s was due in part to the ability of investors to support projects aimed at finding new cures and treatments through similar joint ventures. This legislation will help spur greater private investment in biotech and other R&D intensive industries.
“BIO applauds the sponsors of this bill and pledges to work with the Congress to ensure this legislation is passed.”