5 years on: Good policy helps biotech
- This week was the five year anniversary of the 2012 JOBS Act, a rare bipartisan move to stimulate small businesses.
- The law served as a particular stimulus for biotech companies. Industry organization BIO conducted a review of the last five years to see just how large that impact has been.
- According to BIO, 212 biotechs were able to conduct an initial public offering over the last five years, while only 55 biotechs were able to IPO during the five years prior. Those biotechs were able to raise upwards of $17 billion in those initial offerings and another $16 billion in follow-on offerings.
In a time when the biotechnology industry is facing a swath of deregulation and potential funding cuts to research under the new presidential administration, BIO is celebrating what the industry can accomplish when solid policy is in place.
Under the JOBS (Jumpstart Our Business Startups) Act, the biotechs that used its funds to go public currently have nearly 700 therapies in development, and 18 new treatments have been approved by the Food and Drug Administration.
The industry is particularly worried right now about the funding to early research that could be cut through proposed budget changes — President Trump has submitted a discretionary budget proposal for 2018 that would cut nearly $6 billion from the National Institutes of Health budget. The NIH typically funds grants to universities and labs that conduct early research.
According to BIO, 48 biotechs that were still conducting early research were able to IPO using funds from the JOBS Act.
The industry group used the five-year anniversary of the law to emphasize its support for other capital market reforms, including the Fostering Innovation Act, which would extend the Sarbanes-Oxley Section 404(b) exemption for pre-revenue companies for another five years.
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