The House of Representatives has overwhelmingly passed the Fostering Innovation Act (H.R. 4139), a key capital markets priority for BIO. The bipartisan legislation was introduced by Reps. Kyrsten Sinema (D-AZ) and Michael Fitzpatrick (R-PA).
The JOBS Act provides emerging growth companies (EGCs) with a five-year exemption from Section 404(b) of Sarbanes-Oxley (SOX), which requires a costly external attestation of a company’s internal financial controls. The Fostering Innovation Act would extend the JOBS Act’s SOX 404(b) exemption for an additional five years for former EGCs that maintain a public float below $700 million and average annual revenues below $50 million. The additional five years of cost-savings would allow growing companies to focus their capital on groundbreaking R&D rather than one-size-fits-all regulatory burdens.
The following statement may be attributed to BIO President & CEO Jim Greenwood:
“Thanks to the leadership of Reps. Sinema and Fitzpatrick, the House has approved vital legislation that will build on the success of the JOBS Act and support capital formation for research and innovation. This bipartisan vote shows that support for small business innovation crosses party lines, and BIO is hopeful that the Senate will swiftly consider and approve the Fostering Innovation Act.
“For emerging biotech companies, one-size-fits-all compliance burdens present a costly roadblock to growth. Growth-stage innovators operate without product revenues, meaning that funds needed to comply with unduly regulatory burdens are diverted from their intended purpose – scientific advancement. The Fostering Innovation Act would reduce the cost of SOX compliance for these companies, allowing them to utilize investment capital to spur job creation and advance their potentially life-saving research.
“BIO thanks Reps. Sinema and Fitzpatrick for their leadership on this important issue. We applaud the House for passing the Fostering Innovation Act to spur scientific progress at small business innovators across the country.”
BIO was joined in support of the Fostering Innovation Act by the New York Stock Exchange (NYSE) and the National Venture Capital Association (NVCA), both of which endorsed the bill as an important step toward commonsense regulations that help growing companies thrive.