Survey: Therapeutic Discovery Project Helps Biotechs

(UC-San Diego/NSF)

A survey of executives with biotechnology companies that received grants or credits under the Qualifying Therapeutic Discovery Project indicates the companies benefited from the awards, including the creation of new jobs. The survey of 226 top-level company executives was conducted online by the polling company Penn Schoen Berland, between November 2010 and February 2011, for the Biotechnology Industry Organization.

The Qualifying Therapeutic Discovery Project (QTDP) tax credit was created by the Patient Protection and Affordable Care Act of 2010, and funds research by small companies to prevent, detect or treat chronic or acute diseases, reduce the growth of health care costs, or advance the goal of curing cancer. The award — given in the form of a tax credit or grant — is only available to companies with fewer than 250 employees. Some $1 billion was distributed under the program

The companies receiving the awards say the credits or grants both created new jobs and saved their current workforces. The average awardee company has 22 employees. Respondents indicate their companies created on average six new jobs as a result of the credit or grant, and saved another seven jobs per company.

Most of the biotech executives say the credits or grants made a big impact on advancing their company’s research. Six in 10 (62%) said the support “very likely” advanced the progress of their projects, while another quarter (23%) said the funding helped somewhat. Oncology and hematology research attracted the the largest percentage of credits or grants (26%) followed by infectious diseases (12%) and central nervous system or neurology projects (11%).

The survey indicates that the QTDP helped keep at least some American biotech companies from moving offshore. Three in 10 executives (29%) said they were approached by representatives of foreign countries, mainly European or Asian, to move their operations there. A majority of the executives who were approached about moving offshore credited the QTDP with helping keep their companies in the U.S.

Read more: IRS Posts Therapeutic Discovery Project Awards

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