BIO Supports Bill to Modernize the Tax Code for Life Sciences Companies

07-Aug-2007

Jim Greenwood, president and CEO of the biotechnology Industry Organization (BIO), thanked U.S. Representatives Allyson Schwartz (D-PA) and Kevin Brady (R-TX) for their leadership in introducing the American Life Sciences Competitiveness Act of 2007 (H.R. 3264).

"America's life sciences entrepreneurs deserve a tax code that is forward-looking, rewards risk-taking, and encourages the growth of a 21st century knowledge-based economy. Introduction of the American Life Sciences Competitiveness Act of 2007 is an important step towards this goal," stated Greenwood. "We thank Representatives Schwartz and Brady for their strong support of the life sciences."

The legislation modernizes numerous elements of the federal tax code to ensure that America's biotechnology companies can continue to raise the funding necessary to bring new therapies to market. In particular, the legislation reforms net operation loss rules, improves the research and development tax credit, modernizes the orphan drug credit, encourages the development of new bio-defense and pandemic flu countermeasures, and promotes long-term investment in small life sciences companies struggling to raise research capital.

The large majority of America's biotechnology companies are small businesses struggling to raise the approximately $1.2 billion necessary to bring a new life-saving biotechnology therapy to market. Often these companies do not have product revenue and must rely on invested research capital as they conduct research and development and clinical trials for a decade or longer. As such, biotech companies have a unique business model, one not envisioned by the current structure of the federal tax code.

"This legislation recognizes the challenges facing U.S. life sciences companies in a globally competitive environment," concluded Greenwood. "As other nations continue to increase their investment policies to promote biomedical research and development, H.R. 3264 is an important measure to ensure that America continues as the world leader in life sciences innovation. By removing existing impediments to growth and investment in the tax code, the legislation will help to encourage the creation of high-skill, high-wage jobs in the U.S."

https://www.bionity.com/en/news/66877/bio-supports-bill-to-modernize-the-tax-code-for-life-sciences-companies.html