BIO Applauds Reps. Sinema and Fitzpatrick for Introducing the Fostering Innovation Act
Washington, D.C. (December 1, 2015) – – Today, the Biotechnology Industry Organization (BIO) applauds Reps. Kyrsten Sinema (D-AZ) and Michael Fitzpatrick (R-PA) for introducing the Fostering Innovation Act. This important bill would reduce compliance costs for growing businesses that benefitted from the JOBS Act.
The JOBS Act provides emerging growth companies (EGCs) with a five-year exemption from Section 404(b) of Sarbanes-Oxley (SOX), which requires a costly external attestation of a company’s internal financial controls. The Fostering Innovation Act would extend the JOBS Act’s SOX 404(b) exemption for an additional five years for former EGCs that maintain a public float below $700 million and average annual revenues below $50 million. The additional five years of cost-savings would allow growing companies to focus their capital on groundbreaking R&D rather than one-size-fits-all regulatory burdens.
The following statement may be attributed to BIO President & CEO Jim Greenwood:
“BIO commends Reps. Sinema and Fitzpatrick for introducing the Fostering Innovation Act. Most emerging companies undertake the decade-long, billion-dollar biotech development pathway without the benefit of product revenue to fund their research, so they highly value resource efficiency. Cost burdens like SOX Section 404(b) divert capital from science to compliance and can slow a company’s progress by taking funds away from R&D.
“The JOBS Act has stimulated more than 180 biotech IPOs to date and is currently supporting a wide range of newly public companies for their first five years on the public market. The Fostering Innovation Act would build on the success of the JOBS Act by acknowledging that many biotechs will remain pre-revenue even after the five-year EGC clock expires.
“By extending the JOBS Act’s SOX 404(b) exemption for an additional five years, the Fostering Innovation Act would ensure that small business innovators can remain laser-focused on the search for groundbreaking cures and treatments. BIO strongly supports this move away from one-size-fits-all regulations, and applauds Reps. Sinema and Fitzpatrick for their efforts to reduce compliance costs for emerging biotechs and support small business capital formation.”
For more information on the biotechnology industry and emerging biotech companies in particular, please visit www.bio.org.