New Survey Points To Promise of Therapeutic Discovery Project
WASHINGTON, D.C. (Thursday, October 28, 2010) - Leading biotech innovators say the new Therapeutic Discovery Project (TDP) – which makes available a tax credit to companies with 250 employees or fewer – will have a positive impact on advancing life-saving therapies and cures for patients, and U.S. biotechnology competitiveness, while helping sustain and create jobs.
CEOs of eligible biotech companies also say the program increases the likelihood that they will keep their operations in the U.S. The new findings were released today by the Biotechnology Industry Organization (BIO). Recipients of the awards are expected to be announced by early next week.
“This survey demonstrates that the Therapeutic Discovery Project, and programs like it, can accelerate our industry’s ability to develop new treatments for individuals living with cancer, Alzheimer’s, Multiple Sclerosis, and many other debilitating diseases while preserving and creating new high-wage, high value U.S. jobs,” said Jim Greenwood, president and CEO of BIO. “America is the world leader in biotech, and we hope Congress will consider extending and expanding this program to support American innovation and speed the development of life-saving cures.”
More than half of the CEOs surveyed report that they have been approached by other countries to move some or all of their operations – and the American jobs that go with them – to foreign competitors including China and India. However, the survey also shows that biotech executives expect the TDP to have a positive impact on their ability to keep their companies’ operations in the U.S. Of the 125 respondents, 67% say the opportunity to apply for the tax credit makes them more likely to keep their companies’ operations in the U.S.
As access to private capital to the industry has decreased, the biotech industry has shrunk. The sector has shed roughly 100 public companies since fourth-quarter 2007 and today is at least 25 percent smaller in terms of the number of public companies than it was three years ago. Data from the survey show that leaders of small U.S. biotechnology companies anticipate the credit will have a positive impact on job sustainability (75%), on U.S. biotechnology global competitiveness (72%), and on advancing life-saving therapies and cures for patients (76%).
The biotech industry leaders surveyed believe that with the tax credit they can create more jobs and hire more people (67%). An additional 30% will be able to maintain current employment levels which would not be possible otherwise.
The survey was conducted by the research firm Penn Schoen Berland. The sample included 125 CEOs and other C-Suite executives of biotechnology companies eligible for the credit. Respondents were interviewed online and in person.
About the TDP
The Qualifying Therapeutic Discovery Project tax credit is a $1 billion fund established under section 48D of the Internal Revenue Code (IRC), (P.L. 111-148). The credit is available to companies with 250 employees or fewer and covers up to 50 percent of qualified investments in projects aimed at creating new therapies, reducing long-term health care costs, or significantly advancing the goal of curing cancer within the next 30 years. To provide an immediate boost to U.S. biomedical research, the credit is available for investments made or to be made in 2009 and 2010 up to a maximum of $5 million. Companies may also elect to receive the credit as a grant.
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