A host of small and mid-sized biotech companies are massing at the starting line for the federal government's $1 billion tax credit/grant program. And a Treasury spokesperson told the Wall Street Journal that details on applying for the money are expected at any moment now.
Speed will be of the essence for any developer looking to get a piece of this action. Slipped into the healthcare reform package at the urging of BIO, the government will provide 50 percent of the 2009 and 2010 project development costs of life sciences companies--up to $5 million. Those that don't make money, which is the norm for development-stage biotechs, can get a grant instead of a tax credit. And the billion dollars will be claimed almost as soon as it's on offer.
"It will be oversubscribed," William Kitchens, a life-sciences lawyer with Arnall Golden Gregory in Atlanta, told the Journal. "There will be some companies that will meet all of the qualifications, but won't get funded."
"This is a very difficult environment to raise money in for any biotech company," GlycoMimetics CEO Rachel King told Bloomberg. "To the extent that we can take advantage of these credits, we can put the money in our coffers and it will help the development of [our] drug."