Canadian trade body BIOTECanada has become the latest to call on its national government to help the ailing industry, saying the companies it represents are essential to economic recovery.
BIOTECanada’s proposals include a one‐time redemption for unused tax losses for companies fitting certain parameters and an exemption from capital investment for those making new direct investments in 2009 and 2010.
The trade body believes that these measures would help ensure that Canadian biotechs stay afloat and the nation does not lose the $1.7bn annual spending on R&D.
Andy Sheldon, president and CEO of Medicago, said: “With limited sources of financing available for the industry, many Canadian biotech companies are wondering where their next six months of operating cash are going to come from and need the Canadian government to take immediate action. For the industry to survive, we need a commitment from our government to facilitate investment and provide short term relief.”
The fear, which is explicitly stated, is that Canadian biotechs will lose out to competitors based in the US and UK, although these companies have been facing their own difficulties and are also seeking stimulus packages.
A proposal has been put before the US Congress that would see biotechs forfeit tax breaks in the future in exchange for a cash injection now.
This increase in short term liquidity is needed to keep US biotechs operational, 120 of which have insufficient cash reserves to survive the next six months, according to the Biotechnology Industry Organisation (BIO).
A similar case has been presented to the British Prime Minister by 22 biotech industry leaders, who are hoping the government will enter into public-private partnerships with companies to ensure R&D funds are available.
Although the details of each proposal differ, the causes of the difficulties and the consequences of inaction will be similar regardless of geographic location.