California's Biomedical Industry Applauds New R&D and NOL Benefits.Business Editors & Health/Medical Writers BIOWIRE2K LA JOLLA La Jolla (lə hoi`yə), on the Pacific Ocean, S Calif., an uninc. district within the confines of San Diego; founded 1869. The beautiful ocean beaches, in particular La Jolla shores and Black's Beach, and sea-washed caves attract visitors and , Calif.--(BUSINESS WIRE)--June 30, 2000 California Healthcare Institute (CHI), representing more than 200 biotechnology, medical device, pharmaceutical and academic research organizations in California, applauded a major increase in the state R&D tax credit and critically important Net Operating Loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. (NOL NOL - Never Offline ) provisions signed into law today by Governor Davis. The new budget increases the state R&D credit by 25 percent (from 12 percent to 15 percent), extends the NOL carryforward period to 10 years, and incrementally increases the NOL deduction carryforward amount to 65 percent. Governor Davis championed the inclusion of both incentives in the final budget and Assemblymember Ted Lempert (D-San Carlos) carried the NOL piece in the state legislature A state legislature may refer to a legislative branch or body of a political subdivision in a federal system. The following legislatures exist in the following political subdivisions: "The R&D tax credit is a catalyst in California's booming biotech and medical device economy," said David Gollaher, Ph.D., president of California Healthcare Institute (CHI). "It works effectively to encourage companies to take on research projects they couldn't otherwise afford. The result is more medical inventions, more jobs, and better treatments for patients." "Further, the average biotech company operates at a net loss for more than a decade while it conducts expensive research and clinical studies. As a result, tax credits with a short half-life are of little value. Extending the Net Operating Loss carryforward period to 10 years is a crucial incentive for California's leading-edge biotech innovators. We applaud Governor Davis for championing incentives that fuel medical progress," said Gollaher. The increase in the state R&D credit and the more valuable NOL benefit acknowledge the long and arduous path to bring medical innovation from the laboratory to the patient. It takes an average of 12-15 years for a single biotech drug to move from the laboratory through FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. review and make its way to market. During this time, companies must invest as much as $500 million, without product revenues to defray de·fray tr.v. de·frayed, de·fray·ing, de·frays To undertake the payment of (costs or expenses); pay. [French défrayer, from Old French desfrayer : des-, the cost. In 1999, the typical California biomedical bi·o·med·i·cal adj. 1. Of or relating to biomedicine. 2. Of, relating to, or involving biological, medical, and physical sciences. company invested 42% of its operating expenditures on R&D. With one-third of the nation's biotechnology companies Top 100 Biotechnology Companies The following is a list of the top 100 biotechnology companies ranked by revenue. The first nine companies qualify for the list of the top 50 pharmaceutical companies. and 28 percent of high-tech medical device and diagnostics firms, California is the world headquarters for biomedical innovation. CHI's mission is to advance responsible public policies that foster medical innovation and promote scientific discovery. CHI's Web site is http://www.chi.org. |
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