WASHINGTON--()--The Biotechnology Industry Organization (BIO) today lauds Representative Patrick McHenry (R-NC) for introducing H.R. 701, a bill to speed the implementation of a key provision in the Jumpstart Our Business Startups (JOBS) Act.
“BIO supports expeditious and effective implementation of the JOBS Act. In the year since the law passed, biotech companies have enthusiastically taken advantage of the IPO On-Ramp, which did not require SEC rulemaking.”
The JOBS Act, which passed Congress with a large bipartisan majority and was signed into law by President Obama last spring, directed the U.S. Securities and Exchange Commission (SEC) to make revisions to Regulation A that will increase access to capital for growing companies, such as biotech innovators.
Before the JOBS Act was enacted, Regulation A allowed companies to conduct direct public offerings of up to $5 million; the JOBS Act increased the offering limit to $50 million. Once these changes are implemented, Regulation A will spur fundraising for emerging biotech companies, for which a $50 million capital influx could support groundbreaking research and stimulate job creation.
Jim Greenwood, BIO’s President and CEO, made the following statement:
“BIO supports expeditious and effective implementation of the JOBS Act. In the year since the law passed, biotech companies have enthusiastically taken advantage of the IPO On-Ramp, which did not require SEC rulemaking.
“However, delays at the SEC have blunted the potential impact of the other capital formation reforms in the law, including Regulation A. BIO applauds Rep. McHenry for introducing legislation to speed the implementation of this important provision.
“Emerging biotech companies that do not yet have product revenue must cultivate a wide range of public and private investors to finance the development process. Changing the eligibility threshold for Regulation A offerings will provide a new source of capital to fund the search for cures and breakthrough medicines. Bringing groundbreaking cures and treatments from bench to bedside is a long and arduous road, and biotechnology companies are at the forefront of the effort.
“BIO supports implementation of the JOBS Act and efforts to incentivize and encourage capital formation for emerging biotech companies.”
Eight of the eleven biotech IPOs since the JOBS Act was signed into law were undertaken by emerging growth companies using the IPO On-Ramp. Other provisions of the JOBS Act, including a new crowdfunding pathway and reforms to SEC Regulations A and D, are still awaiting rulemaking at the SEC.
The JOBS Act provided implementation deadlines for Regulation D (July 4, 2012) and crowdfunding (December 31, 2012). Rep. McHenry’s legislation would add an implementation deadline of October 31, 2013 for the Regulation A reforms. Companies cannot take advantage of these capital formation provisions until the SEC acts.
More information on the JOBS Act can be found here.
BIO represents more than 1,100 biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and in more than 30 other nations. BIO members are involved in the research and development of innovative healthcare, agricultural, industrial and environmental biotechnology products. BIO also produces the BIO International Convention, the world’s largest gathering of the biotechnology industry, along with industry-leading investor and partnering meetings held around the world. BIO produces BIOtechNOW, an online portal and monthly newsletter chronicling “innovations transforming our world.” Subscribe to BIOtechNOW.
Upcoming BIO Events
March 25-27, 2013
San Diego, CA
April 22-25, 2013
Congress on Industrial Biotechnology
June 16-19, 2013