How tax policy could strengthen biotech

It's Tax Day—and we have an exclusive look at how tax policy (with a few improvements) could support the bioeconomy. Plus, a human was infected with the fast-spreading bird flu virus—are we at risk of a pandemic? (605 words, 3 minutes, 1 second)

How sound tax policy can strengthen the bioeconomy

Ahead of today’s U.S. tax deadline, a Bio.News analysis explains how improvements to tax policy could incentivize biotech innovation that helps patients and the planet.

Five tax policy improvements could strengthen the bioeconomy:

• Restore the R&D deduction, which was replaced by 5-year amortization as of the 2022 tax year, by passing The American Innovation and Jobs Act.
• Advance improvements to the payroll tax credit, such as by extending the eligibility period.
• Encourage investment in small biotechs through tax incentives, such as expanding the investor capital gains exemption.
• Reform Section 382 of the Internal Revenue Code, which can unintentionally limit a startup’s use of its Net Operating Losses (NOLs)—an improvement proposed in The American Innovation Act of 2018.
• Allow small biotechs to receive the value of a portion of their NOLs upfront, as proposed in the previous Congress under The IGNITE American Innovation Act. 

What about the Inflation Reduction Act? The legislation encourages biofuels production, Bio.News notes, with tax credits for:

• Second-generation biofuel production from qualified feedstocks.
• Sale or use of sustainable aviation fuel (SAF) that achieves a lifecycle greenhouse gas emissions reduction of at least 50% compared to petroleum-based jet fuel.
• Domestic production of clean transportation fuels, including SAFs.
• Investments in advanced energy projects.

But given the incentives’ short duration, swift implementation and up-to-date modeling to determine eligibility are needed, said BIO in a letter to President Biden.

BIO’s take: “A sound tax environment is critical for ensuring small biotechs can attract and retain capital necessary for developing their innovative products and solutions,” says Cameron Arterton, BIO’s VP of Emerging Companies and Capital Formation.

Read the whole thing at Bio.News.

Bird flu mutations in human patient cause concern

While the public health risk currently remains low, a sample from a man infected with bird flu contained a genetic mutation, moving the virus closer to transmission between humans. 

What’s happening: Mutations could help the H5N1 bird flu virus replicate in mammals, Bio.News explains. But spread among humans would require several more mutations, which seem unlikely, the Centers for Disease Control and Prevention (CDC) told the New York Times.

Why it matters: Since the massive increase in cases among birds began in 2022, 11 people have been infected with H5N1, all apparently infected by birds. But if human-to-human transmission becomes possible, we risk a pandemic.

What’s the risk? While the CDC says bird flu currently poses low risk to humans, a CDC official emphasized the need to track potential threats to avoid a zoonotic disease pandemic.

A One Health approach—treating human, animal, and environmental health as one—recognizes how climate change has aggravated human disease and increased the possibility of zoonotic disease. 

Biotech can address all sides of the One Health triangle—with human health interventions; animal health innovations, including gene-editing to combat bird flu; and biotech climate solutions. But encouraging these innovations requires regulatory reform. 

Read the Bio.News story.

More Health News: 

Reuters: GSK's antibiotic drug to treat uncomplicated UTIs meets main goals
“The drug, gepotidacin, in phase III trials, met its primary goals of being on a par or better than nitrofurantoin, the current standard of care for the treatment of uUTIs, the company said.” 

President Biden’s Tuesday: Delivering remarks on actions to help families access care and support care workers and family caregivers.

What’s Happening on Capitol Hill: Securities and Exchange Commission (SEC) Chair Gary Gensler will appear before the House Financial Services Committee, and a Senate Judiciary Intellectual Property Subcommittee hearing will cover foreign competitive threats to American innovation and economic leadership. Meanwhile: “The Supreme Court today will look at whether national pharmacies run by Safeway and SuperValu violated the government’s flagship anti-fraud law—or whether the law’s requirements are too unclear to hold the chains accountable,” reports Axios.