California Net-Loss Carry-Forward Bill Set for Aug. 7 Decision After Hearing
California lawmakers are expected next month to decide the fate of a bill that would double the amount of time life-science and other tech companies can carry forward tax deductions on their net operating losses, from 10 to 20 years.
Assembly Bill 1370, available here, had been expected at deadline to be added to the “suspense” file, the set of bills suspended from the usual review process while lawmakers review their prospective costs and benefits, several supporters of the bill told BioRegion News last week. The state Senate’s Appropriations Committee was to have taken the action July 14 following a hearing. The panel has tentatively set an Aug. 7 hearing to decide on AB 1370 and other pending “suspense” bills.
AB 1370 will need committee approval on Aug. 7 to advance to the full Senate for floor debate and a vote. Supporters of AB 1370 — from its main author, Speaker Pro Tem Sally Lieber (D-Mountain View), to life sciences leaders and industry groups — will have to scramble to advance the bill. The net-loss bill and all other legislation will die with the Aug. 31 end of the legislative session, unless passed by both houses of California’s legislature.
Talk in state legislative circles has had lawmakers looking to adjourn even earlier, but that would be unlikely if legislative leaders and Gov. Arnold Schwarzenegger fail to reach agreement on a new budget for the fiscal year that began July 1.
Industry advocates hope to bypass the Aug. 31 deadline by including AB 1370’s carry-forward provision as part of a budget deal [BRN, July 7]. But state officials are striving to plug the state’s $15.2 billion budget shortfall, and that effort could end up curbing the industry incentive rather than expanding it.
Last week, a budget conference committee dominated by Democratic leaders of California’s Assembly and state Senate recommended suspending the net-operating-loss provision for three years. Conferees projected that the move would generate $1.1 billion for the state — while opponents have warned it would discourage life sciences and other tech companies from relocating to or expanding within California. Republican legislative leaders promised to beat back the NOL suspension effort, which contradicts the public support for extending the carry-forward by Schwarzenegger, a Republican [BRN, June 23].
The conferees went beyond the cut suggested last February by the state Legislative Analyst’s Office led by Elizabeth Hill. Hill’s office recommended limiting NOL carry-forwards to 50 percent of a taxpayer's net income in a given year; there is no limit at present. That reduction was projected to generate $330 million for the state in FY 2008-09 and $410 million in the following fiscal year.
The Assembly passed AB 1370 last year and quickly sent it to the Senate, where it sat in that chamber’s Revenue and Taxation Committee for nearly a year before it voted June 25 to approve the bill [BRN, June 30].
New Jersey Pharma Giants Planning More Than 800 Layoffs Next Month
New Jersey will lose more than 800 life sciences jobs between Aug. 1 and Sept. 1, as three pharmaceutical giants prepare to cut costs by laying off employees.
Schering-Plough, Ortho Biotech, and Abbott Laboratories have all notified New Jersey’s Department of Labor and Workforce Development that they intend to lay off a combined 843 workers. The notifications, listed here, are required under the federal Worker Adjustment and Retraining Notification, or WARN, Act, under which states are required to be informed at least 60 days in advance of all layoffs by companies with 100 or more employees, not counting employees who have worked less than six months in the last 12 months, or employees working an average of less than 20 hours a week.
Schering-Plough plans to cut at least 500 jobs statewide effective Aug. 11, part of a 5,500-employee global layoff the company announced April 2, citing “hard new realities” that included a drop in sales of Vytorin following results raising questions about the heart drug’s effect against artery plaque.
While most of the layoffs will be at the company’s Kenilworth facility, Schering-Plough will also eliminate jobs in Berkeley Heights, Roseland, Springfield, Summit, and Union. A company spokesman, Stephen Galpin, told the Star-Ledger of Newark, NJ, the company will likely cut additional jobs in New Jersey.
Ortho Biotech, a unit of Johnson & Johnson, in August will shift 260 jobs from Bridgewater, NJ, to the Horsham, Pa., headquarters of J&J’s Centocor subsidiary, as part of a consolidation of its Ortho-Biotech unit into J&J’s Centocor subsidiary following a merger of the two companies. Ortho will also eliminate 22 New Jersey jobs as part of a nationwide, 289-job layoff. J&J has cited a decline in sales of the anemia drug Procrit.
Abbott will shift 83 positions now in Parsippany, NJ, to the company’s research headquarters in Abbott Park, Ill., effective Aug. 29.
The layoffs bring to 1,353 the number of New Jersey job cuts that life sciences companies have told the state about in advance. A check of WARN Act notifications filed with the state during the first six months of this year showed three additional life sciences companies idling a combined 510 workers:
- Nycomed laid off all 196 employees at the former Bradley Pharmaceuticals plant in Fairfield, NJ, effective April 30, two months after Bradley was acquired by the Swiss dermatology drug maker for $346 million.
- GlaxoSmithKline laid off 109 employees based at the former Reliant Pharmaceuticals site in Liberty Corner, NJ, effective March 31, following GSK’s nearly $1.7 billion acquisition of Reliant last year.
- Teva Pharmaceuticals laid off 155 employees effective April 25, after the generic drug maker shut down its Northvale, NJ, facility in a consolidation move.
Report: GSK to More Than Double R&D Staff in China, as Company Plans Layoffs in US, Europe
GlaxoSmithKline will more than double its research and development staff in China, from the current 170 workers to 350 workers, over the next several years, Reuters reported, citing as its source Carol Zhu, a GSK executive in China who spoke to the wire service at an industry event.
The China expansion contrasts with its plan, announced last month, to cut about 350 R&D jobs, or 2 percent of total R&D workforce, in the US, the UK, and Italy. An unspecified number of those layoffs will occur at North Carolina’s Research Triangle Park, where GSK employs more than 5,500 people, the Triangle Business Journal reported.
Oklahoma’s EDGE Fund Board Launches Review of Pre-Applications for $13M in Funds
The eight-member policy board that oversees Oklahoma’s Economic Development Generating Excellence endowment fund this fall will award about $13 million to projects deemed most likely to grow the state's economy by creating new jobs, Paul Risser, EDGE’s executive director, told the Oklahoman of Oklahoma City.
"We will support applied research for which there is a reasonable expectation that it will increase high tech jobs and increase high tech firms in Oklahoma,” Risser told the newspaper.
The EDGE Fund Policy Board, chaired by BancFirst chairman HE (Gene) Rainbolt, met July 9 to begin sorting through 94 "pre-proposals” from Oklahoma researchers and companies seeking funding for their projects.
About a third of the proposals were in biotechnology, though many of those proposals encompassed biotech and other disciplines, such as agriculture or energy, Risser told the newspaper, adding: “What's exciting to me is, frankly, I thought we would get 25 or so preproposals.”
Proposals were sought in biotech as well as weather science, energy, agriculture and aerospace. The $13 million in available funds for proposals represents investment earnings from the $150 million appropriated to the endowment fund by the state Legislature two years ago.
The policy board will act following recommendations from a seven-member advisory committee chaired by J. Donald Capra, president emeritus of the Oklahoma Medical Research Foundation.
Maryland’s MIPS Approves 22 Industry-Academic Research Projects Totaling $3.6M
The Maryland Industrial Partnerships Program last week announced it had approved 11 biotechnology research projects partnering Maryland companies with university researchers to develop high-tech products, half of the 22 projects totaling $3.6 million that were approved.
Half the funding for approved projects comes from participating companies; the remainder, from MIPS, an initiative of the Maryland Technology Enterprise Institute, or Mtech, at the University of Maryland. Funding supports work in the laboratories of participating university system faculty, who receive all funding, and work closely with companies to advance product development.
Approved biotech projects include:
- A&G Pharmaceuticals of Columbia, Md., and the University of Maryland, Baltimore: Serum GP88 as Predictor of Breast Cancer Outcome; $184,000.
- AHPharma Food Safety Products of Salisbury, Md., and the University of Maryland Eastern Shore: Solar LED lighting systems for poultry houses; $165,614.
- Aparna Biosciences of Rockville, Md., and UMB: Therapy of Candida with HK-Fluconazole conjugates; $136,849.
- Cellex of Rockville, and UMB: A Novel Bacterial Vaginosis Test; $152,247.
- Gliknik of Baltimore, and UMB: Recombinant stradomers to treat autoimmune disease; $135,000.
- Neuronascent of Clarksville, Md., and UMB: Neurogenic agent's effect on ischemic injury; $121,560.
- Pharmathene of Annapolis, Md., and UMB: Mechanism of action studies for Valortim III; $281,454.
- Rafagen of Rockville, and UMBI: Super promoters for therapeutic protein production; $147,236.
- RegeneRx Biopharmaceuticals of Bethesda, Md., and UMB: Combination therapy for myocardial infarction; $232,146.
- Remedium Technologies of Rockville, and UMCP: Self-assembled dressings for active wound care; $103,950.
- Zymetis of College Park, and UMCP: Pentose fermenting strain of brewer's yeast; $117,373.
North Carolina Biotechnology Center Expands Loan Programs for Start-ups
The state-funded, non-profit North Carolina Biotechnology Center said last week it has expanded its loan programs to allow start-up biotech companies to qualify for up to $1 million in loans.
The maximum available amount for two loan programs has been increased. The center’s Small Business Innovation Research Bridge Loan program, designed to fill the gap between phases of federal SBIR funding, has doubled the size of its top loan from $75,000 to $150,000.
Also, the center also more than doubled the maximum of its Small Business Research Loans, intended to support applied research, from $150,000 to $350,000.
- Company Inception Loan: The center has launched a new Company Inception Loan of $50,000, replacing two programs that awarded either $25,000 or $50,000 to fund corporate spin-outs or university start-ups.
- Technology Enhancement Grant: Technology transfer offices of universities in North Carolina can pursue a new Technology Enhancement Grant of $50,000.
- Strategic Growth Loans: Companies meeting financial milestones defined in their $250,000 Strategic Growth Loan are now eligible for a second $250,000 infusion through the same program. Companies were formerly limited to one award. The loans still require matching investment from a qualifying investment fund.
The revisions became effective July 1 and, according to the center, were a product of conversations with members of the venture capital community, university technology-transfer offices, and entrepreneurs.
The biotech center’s business and technology development program has provided more than $16 million in loans and other support to more than 100 startup companies statewide since the center was established in 1984. That funding has generated another $1.6 billion from venture capital, federal grants, cooperative business agreements and other sources.
$850K Massachusetts Infrastructure Grant to Benefit Organogenesis Expansion
Massachusetts officials have approved an $850,000 grant to Canton, Mass., for infrastructure improvements toward the expansion of Organogenesis within the town.
The state’s Massachusetts Opportunity Relocation and Expansion, or MORE, program, will allow Canton to improve roads and sidewalks in the vicinity of Dan Road. The improvements are part of plans by the tissue engineering company to expand its headquarters, manufacturing, and research and development facilities to a three-building campus of more than 250,000 square feet.
That campus will consist of the 79,000 square-foot 150 Dan Road; the 78,000-square-foot 85 Dan Road and the 95,000- square-foot 275 Dan Road. Organogenesis has said the expanded campus would allow it to add 50 new jobs by year’s end, and double its work force over several years to about 650 staffers [BRN, April 7].
In return for its job-creation promise, the Massachusetts Office of Business Development has crafted a nearly $18 million package of economic development subsidies for Organogenesis — $12.9 million in grants and financial support, and $5 million in low interest loans for unspecified “growth” initiatives.
The state has awarded more than 30 MORE grants ranging from $655,000 to $10 million, with the goal of enabling business expansion through infrastructure improvements. Municipalities receive the money in partnership with businesses, after showing state officials that the improvements they plan would create at least 100 new permanent full-time jobs.