While most biotech analysts have been concentrating on the 12-year data exclusivity haven provided in the new reform bill, a few are crowing about the bonanza being offered to the drug development industry through an extraordinarily generous new tax credit.
Dean Zerbe, national managing director of AlliantGroup, writes in Forbes that a qualified investment under the tax credit will be rewarded with either a 50 percent credit or a non-taxable grant of the same amount. "Your business makes a qualified investment of $1 million and it gets a $500,000 tax credit or a $500,000 check from Uncle Sam. Wow."
The way Zerbe sees it, hundreds of U.S. biotech companies that could never qualify for the R&D Tax Credit will be able to land these new grants or credits.
Adds Zerbe: "What expenses count as qualified investments? The aggregate amount of costs paid or incurred in the taxable year for expenses necessary for and directly related to the conduct of a qualifying discovery project. What doesn't count? The pay of employees covered by 162(m)(3) of the tax code--think CEOs--doesn't count."
- here's the full column in Forbes