Federal Government Essential to Survival, Growth of Start-up Companies

Biotechnology start-up companies are employing increasing numbers of chemists. These firms are dependent upon recent passage of key federal government legislation for their growth and survival. Additional federal legislation can promote increased establishment and growth of biotechnology companies. Biotech firms represent a major growth opportunity for chemistry employment.

The Biotechnology Industry Organization (BIO) is an organization that represents more than 1,100 biotechnology companies, academic institutions, state biotechnology centers and related organizations across the US and in more than 30 other nations. It promotes the interests of the biotechnology industry in a number of ways including lobbying for federal legislation that will support startup companies in this industry.

While there are biotechnology porter clusters (http://MEMagazine.asme.org/Articles/2011/October/Birds_Feather.cfm) such as San Francisco, San Diego and Boston, BIO President and CEO Jim Greenwood commented “Our nation’s biotechnology industry is comprised of scientists, entrepreneurs, and large and small companies in all 50 states engaged in translating the latest scientific discoveries into innovative new medical therapies and environmental products, increased agricultural production and farm incomes, and greener bio-based products and biofuels.”

2011 U.S. patent reform

Recent federal government developments impacting biotechnology companies, particularly start-up firms, include the recent passage of the America Invents Act to reform the U.S. patent system  signed into law by President Obama (see C&EN, pp. 24-28 (Dec. 19, 2011). In a White House statement, President Obama said, “This much-needed reform will speed up the patent process so that innovators and entrepreneurs can turn a new invention into a business as quickly as possible.”

The U.S. patent system is essential to the development of the biotechnology industry including the survival and growth of biotech start-ups.  Greenwood highlighted that innovation in biotechnology is based upon the strong and predictable protection of intellectual property provided by our nation’s patent system.
“Without strong and predictable patent protection, investors would shy away from investing hundreds of millions of dollars, over a decade or more, in high-risk biotechnology companies, and will simply put their money into projects or products that are less risky or offer a more immediate return but are of less value to society,” said Greenwood.

“Small biotech companies rely on intellectual property to attract investors to fund the lengthy and expensive research and development process necessary to bring breakthrough new therapies and other biotech products to patients and consumers,” also noted by Greenwood.

R&D legislation

The December 2011 passage of the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) reauthorization (as part of the National Defense Authorization Act, HR 1540) by both the House and the Senate is also important to start-up firms. Greenwood notes, “BIO and our members have long advocated for the reauthorization of, and changes to, SBIR/STTR, which are critical sources of funding for emerging biotechnology companies in the early development stages of medical research for serious and life threatening diseases; including cancer, diabetes, HIV/AIDS, and Parkinson’s.
Greenwood commented, “We especially are pleased that this Act will allow majority venture capital-backed companies to once again compete for SBIR/STTR funds, which will help level the playing field for small biotechnology companies so that they can continue to bring innovative medical treatments and cures to market. Allowing companies that are primarily funded through venture capital to compete once again for SBIR/STTR grants will increase the number of new medical discoveries and innovations available to patients.”
Future action

ACS members can support the passage of additional federal legislation that will promote the establishment, survival and growth of start-up firms by following discussions of legislation in C&EN and elsewhere and writing their congressmen and senators supporting such legislation.

John Borchardt is a chemist and freelance writer who has been an ACS career consultant for 15 years. He is the author of the ACS/Oxford University Press Book “Career Management for Scientists and Engineers.” He has had more than 1200 articles published in a variety of magazines, newspapers and encyclopedias. As an industrial chemist, he holds 30 U.S. and more than 125 international patents and is the author of more than 130 peer-reviewed papers.

One Response to Federal Government Essential to Survival, Growth of Start-up Companies

  1. Inspiring quest there. What occurred after? Good

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