The Therapeutic Discovery Project Credit has been the talk of the bioscience community since the legislative text was released on May 21st. The program will infuse the industry with both tax credits and cash grants for qualified investments in therapeutic R&D. The hope is to stimulate continued growth and progress for therapeutic discovery, including diagnostics and delivery vehicles.
Over the past month there has been much debate over the potential rules and regulations. One such topic of discussion revolved around the inclusion of Federal Grants, such as SBIR/STTRs, as a qualified investment. How can you claim a Federal Grant as a qualified investment? To many that seems as double dipping. According to the IRS, not if you claim that Federal Grant as gross income.
The IRS form, NIH form and final instructions, including FAQ’s from the IRS, were released on June 18th. This question is specifically answered by the IRS.
Q. Can a company apply for the new credit or grant for a project for which the company is already receiving other grant money (e.g., an SBIR award), or does the project have to be completely self-funded to qualify?
A. A taxpayer must reduce the amount of a project’s qualified investment for any grant that is not included in gross income, unless the grant can only be used for costs not included in the definition of a qualified investment. See Notice 2010-45 § 4.01(4).
This could significantly increase the amount of award to many small companies that are funded both privately and through SBIR/STTR grant awards.
Despite the challenging times for bioscience funding, two ATDC companies successfully raised funds to complete clinical trials and expand footprint respectively.
CardioMEMS Inc., which is developing an implantable device to measure and transmit pulmonary artery pressure, has raised $37.9 million in additional capital. The funds give the Atlanta-based vendor capital to complete a clinical trial of its heart failure pressure management system, called CHAMPION, with 550 patients through 65 heart centers in the U.S. The trial started in 2007 with results expected this summer. The device is a wireless high-frequency sensor implanted in the artery using a catheter-based procedure based on proprietary technology from Georgia Tech. The pressure is measured and displayed on a monitoring system. Following the procedure, patients perform wireless measurements of the pulmonary artery pressure from home. The data is transmitted to a secure database for physician review on a proprietary Web site.
SoloHealth, Inc has raised $660,000 in additional capital. Founded in 2007, the company offers self-directed health-care services. Its first product, EyeSite, is an interactive, self-service, vision-testing kiosk that provides consumers with a free assessment of their vision, information about common eye health conditions and referrals to local eye care practitioners. As of March this year, SoloHealth had nearly 100 EyeSite kiosks in seven U.S. markets — including Atlanta ; Houston ; Richmond , Va. ; and Charlotte , N.C. — and will add three cities this year while enhancing the kiosks’ technology.
With ATDC’s expanded bioscience catalyst team we are available to work with all bioscience companies, from concept to market.
Together with Georgia Bio, ATDC will be hosting a workshop, tomorrow 5/11, to discuss the “nuts-and-bolts” of the Therapeutic Discovery Project Credit. Lined up to join our panel session are Russ Medford of Salutria Pharmaceuticals, Russ Plum of Inhibitex, Katherine Breaks of KPMG, Bill Kitchens of Arnall, Golden and Gregory, Robert Craig an Executive Consultant, and Jeff Trent of Paradigm Partners.
These panel members will bring a wealth of experience on the topic. Several panelists have had direct working experience with the similar 48 sec C Advanced Energy Credit and will be able to provide specifics on how the program may unfold. Russ Medford, CEO of Salutria Pharmaceuticals, was integral in working with BIO to lobby directly for the legislation, and Russ Plum, CEO of Inhibitex, has been interviewing consultants to assist Inhibitex is applying for the Project Credit.
This two hour working session will consist mostly of Question and Answer. So join us tomorrow on the 3rd floor of 75 5th Street, NW, and be ready to ask our panelists your specific questions.
When the Health Care Reform Bill (H.R. 3590) was passed on March 23, 2010 it included a Tax Credit or Cash Grant for qualifying small businesses developing therapeutics, molecular diagnostics or delivery vehicles. This tax credit will reimburse eligible companies for 50% of all expenditures spent on a Qualifying Therapeutic Discovery Project during calendar year 2009 and 2010 or fiscal year 2010 or 2011.
The most compelling part of this legislation is the ability to exchange the tax credit for a cash grant. Many small biotech and pharma companies do not have a tax liability and would not benefit from a tax credit. The cash grant option will allow more companies to receive an immediate return.
For example, a $1 million qualified investment will lead to either a $500,00 tax credit or $500,000 check.
The program solicitation will be released by the Department of Treasury, IRS on or before May 21st, 2010. Applications will be be due within 30 days and funds disseminated beginning mid-June.
While the mechanics of the program will be described by the IRS, qualified projects will selected by the Department of Health and Human Services. All eligible companies should receive some assistance, but it is currently not clear how the proposals will be judged and selected, and whether there will be a maximum allocation per project and/or per company.
What we do know:
A Qualifying Therapeutic Discovery Project (Sec 9023 or H.R.3590) includes:
Therapeutics designed to treat or prevent diseases or conditions (investments made in R&D to further a 505(b) or 351(a) application to the FDA).
Molecular diagnostic products to be used in direct diagnosis, or in determining molecular factors related to the disease.
Therapeutic delivery or administration vehicles.
Specifically excluded from this legislation are projects for the development of medical devices. However, we will not know until May 21st whether a medical device used in the delivery or administration of a therapeutic would be considered a qualifying project.
In addition to the above qualifying criteria, selected projects will also result in new therapies, reduce long-term healthcare costs or advance the cure for cancer AND have the greatest potential to result in high-paying job creation and retention, and advance the competitiveness of the U.S. in the fields of life, biological, and medical sciences.
The legislation was modeled after a similar program distributed by the Advanced Energy Manufacturing Credit distributed by the Department of Energy. We anticipate that a similar process will be followed which could include:
A 1 page preliminary application due within 30 days of the solicitation release.
A final application due within 60 days of solicitation including an executive summary, scientific eligibility criteria, selection criteria including job creation/retention and U.S. competitiveness, as well as a spreadsheet detailing costs incurred.
If you are attending the 2010 BIO International Convention, a session held on May 5th from 2:00 to 3:30 will provide additional information.
Two ATDC seed funded bioscience companies complete private financings in 2009 and are honored by GABio Industry Association. Iconic Therapeutics and Visioneering Technologies, both ATDC Seed Funded companies, will be presented with a Deal of the Year award. The GaBio Deal of the Year awards recognize life science companies that have completed a significant development milestone, such as raising investment funds, entering into a partnering agreement or securing a government grant or contract.
Iconic Therapeutics, a biotechnology company developing a drug to treat wet macular degeneration, raised $3.5 million from New Haven, Conn-based Elm Street Ventures. The company has raised $13.8 million since it’s inception in 2003, mostly from angel investors. Iconic, whose technology is based on novel immunoconjugate proteins called “I-cons”, plans to conduct a Phase I trail to show that the compound is safe in humans. The technology was licensed from Yale University.
Visioneering Technologies, an Atlanta based start-up developing technology for correcting presbyopia through contact lenses and other “on eye and in eye” applications, raised $5 million from MB Ventures of Memphis, Tenn., Charter Life Sciences and Life Science Angels, both of Palo Alto, Calif., and from the State of Georgia ATDC Seed Capital Fund. Visioneering’s approach to vision correction utilizes induced aperture optics to improve the optical efficiency of the eye’s vision system. The technology has a number of on eye and in eye applications including contact lenses, LASIK, intraocular lenses and corneal inlays.
The Georgia Bio Annual Awards Dinner will be held Thursday, January 21st, 2010, at The Retreat of Dunwoody. This event recognizes Industry and Community leaders who have made a significant contribution to the Georgia Life Science community. Please see the GABio web site for more details on the Annual Awards Dinner (www.gabio.org).
BioProductCampAtlanta – a 360 degree perspective of the life cycle of a drug or device.
Why are we doing this? The purpose of this event is to develop leaders in our industry and promote the commercialization of our innovations. It will allow current and future entrepreneurs the opportunity to gain access to the full spectrum of the information they need to launch a pharmaceutical or medical device technology.
Saturday – October 3, 2009 8:30 am – 1:30 pm
Georgia Tech Research Institute
250 14th Street NW, Atlanta, GA 30318
Twitter hashtag: #biopca
Cost: Free and is brought to you by the Center of Innovation for Life Sciences and generous industry sponsors.
What is it? BioProductCampAtlanta has its roots in the tradition of the BarCamp. “BarCamp is an ad-hoc gathering born from the desire for people to share and learn in an open environment. It is an intense event with discussions, demos and interaction from participants who are the main actors of the event.
These kinds of events are self assembling in real time. The participants make the agenda on the day of the event – so come ready with a presentation and a laptop so you can share your knowledge. Service providers are encouraged to present but please refrain from using your company’s logo on your Powerpoint deck. You are here to share and learn – not sell your business. BioProductCampAtlanta is designed to develop leaders in our life science industry and promote the commercialization of our innovations.
The NIH in conjunction with the CDC has released their annual contract solicitation. Unlike most NIH SBIR/STTR announcements, the contract solicitation requests applications on specific topics and will not accept investigator initiated research projects. Participants in this solicitation include seven Institutes/Centers from the NIH and five Centers from the CDC. Topics are specific but include research areas such as Imaging of Cancer Stem Cellsto Computer Assisted Sperm Analysis. (Did I get your attention? And no, I’m not kidding.)
Budgets vary by topic and range from $100,000 to $250,000 for a Phase I and $750,000 to $2M for a Phase II. Do not ask for one penny over the budget cap! FastTrack applications will be accepted.
Applications, unfortunately, are paper based and due on the desk of the NIH at 5:00PM, November 9, 2009.
For more information go here or contact us to discuss your application.
As part of the convention BIO held a "Be the Buzz of BIO" contest, a competition in which companies submitted an original video describing why their company and innovation should be the buzz. Last week BIO announced the winners of the competition and I am pleased to say that ATDC member company Zenda Technologies made the final cut. You may view their winning submission below.
As a winner of the contest, Zenda CEO Lawrence Catchpole will join Sir Elton as a speaker. He will present Zenda's innovative accurate and fast testing solutions for brian injury associated with Alzheimer's and concussions in front of industry leaders at the BIO Business Forum.
ATDC is excited to welcome a new member company that is transforming cardiovascular intervention!
We all hope we’ll never need a coronary stent. However, if we (or a loved one) do, let’s hope it’s after ICON’s Nuloy stent system has completed the FDA approval process. Nuloy is a breakthrough alloy for dramatically superior coronary stent performance. The stents made from Nuloy are extremely flexible and can be formed with a wall thickness of approximately half of conventional products. The system makes it easier to deliver stents to tight and tortuous blockages.
All this should add up to improved clinical performance and provide substantial benefit to patients with coronary and peripheral vascular disease.
ICON Interventional Systems, a new ATDC member company, is an emerging medical device company providing cardiovascular solutions to doctors and patients around the world. The company is located in the ATDC Bioscience Incubator in the Ford Environmental Science & Technology building on the Georgia Tech campus.
Stay on the lookout for ICON – this company has great potential to help a great number of people.
Velocity Medical has entered ATDC. Velocity Medical is developing a radiation planning and therapy response software solution for oncologists that assesses the extent of cancer tumors and their response to treatment through the use of advanced biological imaging.
The platform has the ability to import multiple imaging modalities including PET, MRI, CT, and SPECT. Once imported the software enables the images to be easily overlaid and manipulated to better contour a tumor.
If this seems like a bunch of gobblygook to you try this analogy. It is akin to using Google maps in hybrid mode, it is not just maps, it is not just satellite, it’s both, which enables you to better understand the lay of the land.