Biotechs start scrambling for $1B Treasury windfall
In just a few weeks the U.S. Treasury Department plans to start detailing the application rules around a $1 billion tax credit and grant program tailored to benefit the biotech industry. And consultants in the industry say that biotechs are already scrambling for a place in line.
One analyst estimates that Massachusetts developers alone could gain $100 million of that--a windfall that can help cover 50 percent of R&D expenses in 2009 and 2010. That money will be available to biotech companies with fewer than 250 workers, which describes all but a handful of the industry's largest players. And developers that don't have revenue can qualify for grants in lieu of the rebate.
"This is really the first time I'm aware of that companies can essentially get paid for their operating losses. It's very exciting and new," Larry Wittenberg, co-chair of the life sciences practice at law firm Goodwin Procter, tells the Boston Business Journal.
"This is really for the small start-up or developmental stage biotech companies," attorney Ruth Holzman told BioWorld Today. "I think the target was the small venture-backed firms that are really in a cash-crunch right now...There's no time to be sitting around." If you don't have your application ready to go, she says, you'll be shut out.