Governor signs Delegate Darryl Barnes’ House Bill 373 and Senator Roger Manno’s Senate Bill 226 to help Maryland Small Biotech Companies and Early Stage Biotech Innovators
Today, Maryland Governor Larry Hogan signed into law a measure aimed at providing additional support to Maryland small biotechnology companies. Senate Bill 226 sponsored by Senator Roger Manno, and House Bill 373 sponsored by Delegate Darryl Barnes will support Maryland small and innovative biotech companies by amending the Biotechnology Investor Incentive Tax Credit (BIITC) definition of a Qualified Maryland Biotechnology to allow investment in companies that have been in business no longer than 12 years and in active business for up to 15 years if completing the process of regulatory approval. The BIITC Extension has been a legislative priority of BioFactura and the Small Biotechnology Business Coalition, and our Coalition has worked closely with Delegate Barnes and Senator Manno on this legislation.
Under current statute, the time-based requirements are seriously limiting early-stage biotech companies’ ability to utilize the BIITC program to attract initial rounds of sophisticated private investment, as it was intended. The biotech financing path has undergone significant change over the past 10 years that the BIITC program has been available. No longer are most companies seeking larger sophisticated “Series A” rounds in the first few years. Instead, many companies may use the BIITC program to raise a very small seed round from so-called “friends and family” investors to get the company off the ground. Resourceful entrepreneurs may then utilize non-dilutive grant and contract funds to develop technology and achieve commercial proof-of-concept sufficient to attract sophisticated Series A investors. This process has been studied by the National Institutes of Health and proves the point that providing an extended runway of eligibility to 12 – 15 years provides small innovative biotechs with the time needed to develop their product and attract these sophisticated investors.
Maryland’s Biotechnology Investor Incentive Tax Credit has been hailed as a national model to attract biotechs to open shop in Maryland while providing necessary incentives to grow private sector jobs and investment in Maryland’s biotech community. In short, investors in innovative Maryland biotech companies receive a 50% refund of their investments, irrespective of whether the investor resides in Maryland. This permits sophisticated investors from throughout the U.S. and the world share risk with the state thereby helping the companies with the most promising job creating potential in Maryland to get off the ground and bring lifesaving products.
BioFactura and the Small Biotechnology Business Coalition wants to thank the following legislators for their leadership on this issue: Delegate Darryl Barnes, Senator Roger Manno, Delegate David Vogt, Senator Doug Peters, Delegate Jay Walker, Senator Brian Feldman and Senator Nancy King. We also thank Debbie Burrell of Burrell International Group and Ivan Lanier, Darrell Carrington and Katie Nash of Greenwill Consulting for their skill and diligence.
House Bill 373 Co-Sponsors include: Delegates D. Barnes, Afzali, Brooks, Buckel, Carr, Chang, Ciliberti, Fennell, Folden, Gilchrist, Gutierrez, Haynes, C. Howard, Knotts, Krimm, McConkey, McKay, Metzgar, Platt, Reznik, Shoemaker, Simonaire, Tarlau, Turner, Vogt, M. Washington, and C. Wilson.
Senate Bill 226 Co-Sponsors include: Senators Manno, Edwards, Feldman, Hough, Kasemeyer, King, Lee, Madaleno, Peters, Serafini, Young, DeGrange, and McFadden.