Biotechnology continues to hold the greatest promise to address many of the most critical issues facing our world. Continued innovation will lead to breakthrough new and improved cures and treatments for patients living with debilitating diseases such as cancer, HIV/AIDS, diabetes and Parkinson’s; enhanced agricultural products to feed a growing global population while protecting the environmental health of our planet; vaccines to protect against bioterrorism; and revolutionary biofuels. The ability of BIO members to continue our shared mission to heal, fuel, and feed the world depends on having an economic and public policy environment that supports research and development that leads to continued innovation.
In the U.S., this point was underscored throughout 2011 as continuing global economic uncertainty, critical public policy debates and the ongoing need for regulatory reform discouraged investment in our industry, making an already challenging capital formation environment even more trying. A recent National Venture Capital Association study shows that investors are increasingly pulling out of biotech. VC financing is still down 25% from its 2007 peak. Year over year, we continue to see fewer deals being done. The IPO window remains tough and selective, with companies taking a 30% haircut on their asking (filing) price to lure cautious investors.
Throughout the past year, BIO worked tirelessly to advocate for public policies designed to improve the odds for biotech companies by encouraging investment in innovation, and reforming the regulatory review process to ensure timely, science-based and patient-focused decision-making.
In 2011, BIO released our five-year plan and worked with our member companies, our allies and Congress to turn our proposals into legislation. Our recommendations are specifically designed to create new models to encourage investment in innovation and to accelerate the discovery of scientific breakthroughs. As I write this post, we expect legislation to be introduced early next year.
We also negotiated a Prescription Drug User Fee Act (PDUFA) agreement and continued to work on healthcare reform implementation, with a specific eye on the impending release of biosimilars guidance from the FDA. Additionally, we worked successfully this year to support passage of Patent Reform legislation, while fighting against reimbursement cuts by Congress, and addressing myriad appropriations issues.
Most recently, we worked with Congress to pass legislation that reauthorizes the Small Business Innovation Research (SBIR) grant program, ending the year on a high note that will provide critical funding for small companies that may not otherwise survive.
As we look ahead to 2012, BIO will work for Congressional passage of the PDUFA package, and support legislative proposals that reflect the underlying principles of our five year plan. We also will continue to push for extending and expanding the Therapeutic Discovery Project (TDP) tax credit to provide critical R&D funding to emerging biotech companies. The TDP program, enacted in 2010, is an example of the type of policies necessary to spur continued medical innovation, while at the same time protecting and growing high-paying U.S. jobs. The TDP program provided $1 billion in research grants and credits for small biotech companies pursuing new therapies for diseases such as Alzheimer's, HIV/AIDs, Parkinson’s and MS.
Other BIO policy priorities include ensuring the National Institutes of Health have sufficient funding to sustain the public-private collaboration that is transforming biomedical discoveries into innovative treatments for patients. We also will work to ensure that Congress provides the FDA with the resources it needs to keep pace with rapidly evolving biomedical science and fulfill its vital health and safety mission. Working closely with our members, we will remain engaged as the Department of Health and Human Services moves to implement the Patient Protection and Affordable Care Act.In collaboration with our state affiliates, we will continue to work with state governments seeking to grow their biotech sectors as part of their economic development and job creation strategies.
Despite the challenging environment for capital formation, public policy and regulatory issues, our industry continues to make breathtaking scientific breakthroughs. Several key approvals in 2011 highlighted the scientific progress our sector is making, particularly in the areas of personalized medicine and companion diagnostics. BIO believes drugs approved with companion diagnostic tests are the next wave of medicine and will significantly improve patientoutcomes. This year alone, the FDA approved two new drugs that completely eliminate the hepatitis C virus from patients; one of the new drugs is from Merck and the other from Vertex.
The promise of biotechnology remains as strong as ever but there is much work to be done. At BIO, we will continue to engage with public policy leaders in Washington and throughout the world to fight for public policies that encourage innovation and enable our members to develop breakthrough technologies that save lives and transform our world.