Biotech companies may benefit from new rules

Pharma

The biotechnology industry may benefit from new European rules that allow governments to give extra incentives to young innovative companies, said a trade group representing companies including Syngenta AG.

The new European Union rules allow member states to give public funds and tax incentives to companies that are less than 6 years old and spend at least 15% of their sales on research and development, the Brussels-based European Association for Bioindustries said in an e-mailed statement yesterday. The average cost of developing a new biotechnology product is about $1.2 billion, according to an estimate by the Boston- based Tufts Center for the Study of Drug Development. The new European rules will take effect from January 1, EuropaBio said. “This measure will help young innovative companies to become more attractive to investors and play their full role in building the knowledge based bio-economy, creating jobs and growth,” Johan Vanhemelrijck, EuropaBio's secretary general, said in the statement. The new rules also recognize EuropaBio's Young Innovative Companies status as an eligibility criterion for state aid, the trade group said. Governments can provide the incentives without running into trouble with EU competition rules, EuropaBio said. (Bloomberg)

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