California Cures

California’s life sciences association, today released California Cures, a comprehensive
report examining the unique attributes equired for California to maintain the oldest,
largest and most productive life sciences cluster in the world. According to California
Cures, the state’s ife sciences companies are on the verge of investing close to $50 billion
over the next five years to manufacture 230 treatments in Phase III and create more
than 12,000 jobs per year in the process. The report also cites the State of California’s
lack of a long-term strategy to capture this massive, unprecedented economic opportunity.

The report lays out a roadmap for action by government and industry to ensure
that California’s statewide life sciences industry remains a cornerstone of
economic growth for both the State and the Nation. California Cures makes
specific recommendations in the areas of tax policy, infrastructure, education
and regulatory affairs that will help capture the return on California’s three
decades of investment in life sciences research.

According to Matthew Gardner, president of BayBio, “California has a rich history
of pioneering entrepreneurs who have churned out innovation at an extraordinary
pace. The California life sciences industry epitomizes that entrepreneurial
spirit and is a cornerstone of economic growth for the State and the Nation.
California’s elected officials have an unprecedented opportunity to capture the
economic boon offered by the manufacturing of these 230 new treatments and cement
the life sciences industry as a cornerstone to the state’s future, ensuring
long-term economic prosperity. Our policy makers must provide consistent policy
that encourages innovation, research, entrepreneurship and product manufacturing.”

Highlights of the findings in California Cures include:

In the next five years, 230 new treatments produced by California’s life sciences
companies will complete clinical trials and be poised for manufacturing. The
industry will invest $49.6 billion to manufacture these treatments.
Manufacturing jobs and general employment growth opportunities in life sciences
are high wage and benefit jobs with significant opportunities for career development.
In this current economic downturn, California’s life sciences industry is a bright
spot with robust company formation and 12,000 new jobs created annually. Fully 35
percent of global life sciences work is accomplished in California.       

                                            

Over the next five to 10 years, the industry forecasts up to $17 billion in annual
investments into research, facilities and jobs to produce 815 treatments, currently
in phase II and phase III, including the 230 on the verge of manufacturing.
The birthplace of biotech and a global center for R&D, California is poised to
be the epicenter for alternative energy biofuels and biomass.

California does not accurately acknowledge the timeline required for developing
biotech products. The state’s current 10-year carry forward provision for net
operating loss (NOLs) deductions assumes that a life sciences company reaches
profitability in three to five years after incorporation, while the average life
sciences firm does so in year 15.
California’s current tax environment discourages homegrown life science companies
from expanding here.

Highlights of BayBio’s recommendations in California Cures include:

Tax Policy
1. Create a 20-year carry forward provision on the treatment of corporate
   net operating losses.

2. Create corporate tax incentives for major investments in California.

3. Convert California’s R&D Tax Credit into a tax rebate.

4. Create a health information technology and life science early-stage
   investment incentive.

Infrastructure
1. Establish a new California Science & Technology Trust.

2. Incentivize local communities to zone biotech regions in their master
   planning documents.

3. Expand allowable uses for the California Infrastructure and Economic
   Development Bank.

4. Establish a major economic incentive for bioprocessing and biomanufacturing
   investments.

Education
1. Invest $150 million over 10 years in UC-oriented life sciences incubators.

2. Increase state investment in training centers of excellence.

3. Establish a science fellows program to serve the state government.

Regulatory Affairs
1. Establish a harmonization conference between CalEPA and U.S. EPA.

“We stand at a crossroads and California’s leadership position is at stake
with every clinical trial,” Gardner added. “We have the opportunity to decide
whether California will continue to be the world’s headquarters of the life
sciences industry or simply be remembered as its original source. Inaction
now will allow communities in other parts of the world to garner the jobs
and the dividends of manufacturing, as well as downstream investments made
by our industry as a result of California’s investment in life sciences
research over the past three decades. We must be proactive to keep California
biotech competitive in the global economy.”

California Cures is a discussion of the full potential this industry holds,
the economic role it can play for California, and the unlimited possibilities
that abound because of science. For a complimentary copy of the report and
accompanying CD-Rom, which chronicles the great deeds of California biotech.
Pease contact Travis Miller at (650) 871-7101 ext. 207 or travis@baybio.org.