WASHINGTON--(BUSINESS WIRE)--The Biotechnology Industry Organization (BIO) applauds the Securities and Exchange Commission (SEC) for finalizing a provision of the Jumpstart Our Business Startups (JOBS) Act that will further encourage biotech capital formation and investment by raising the offering ceiling under Regulation A (Reg A+) from $5 million to $50 million.
The following statement can be attributed to BIO President and CEO Jim Greenwood:
“Reg A+ allows companies to raise capital with a reduced reporting burden. The increased offering limit under the new Reg A+ will provide a valuable fundraising option for capital-intensive biotech companies. The relative ease of conducting a Reg A+ offering will be extremely important to growing biotech companies given their need to efficiently use investment capital.
“Most small biotech companies operate without any product revenue, relying on external investors to finance all of their operations. The new $50 million offering limit will better reflect the reality that biotech R&D is a costly, time-consuming endeavor.
“It can take more than a decade and over $2 billion in investment to bring a single life-saving treatment to patients. Because most small biotech companies do not generate product revenue, every dollar spent on unnecessarily burdensome regulatory compliance is a dollar not spent on the scientific research that could ultimately benefit patients.
“Requiring small issuers to spend dollars analyzing, understanding, and complying with divergent and often contradictory regulatory requirements deters growing companies from securing the necessary capital for drug development programs.
“We applaud the SEC for taking this important and critical step toward encouraging continued innovation within the biotech industry to help spur the development of treatments and cures.”
Passed in 2012, the JOBS Act has spurred more than 140 IPOs among biotechnology companies alone. These are companies working to find cures for cancer, cardiovascular disease, blood disorders, and infectious diseases, among other conditions.
BIO was a strong supporter of the Reg A+ provisions in the JOBS Act and has engaged directly with the SEC as it implemented the directed reforms. See the press release expressing our support here, see our comments here.
BIO is the world's largest trade association representing 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. BIOtechNOW is BIO's blog chronicling “innovations transforming our world” and the BIO Newsletter is the organization’s bi-weekly email newsletter. Subscribe to the BIO Newsletter.
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