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In this fast-moving industry, BioCT keeps policy makers and influencers abreast of the latest developments and changing needs of the life science community.
My name is Jodie Gillon, and I am the President and CEO ofBioCT. BioCT is the trade organization for life sciences for the State of Connecticut. Our mission is to catalyze and accelerate growth in the life sciences with the goal of improving human health, by fostering a rich, innovative ecosystem and promoting Connecticut as a preferred destination for life science exploration and innovation.We have almost 250 active members across not only those in life sciences which includes AI and digital health, but those supporting this industry and most academic institutions in the State. We also have an active government affairs committee comprised not only of CT based companies but mid and large size companies with colleagues here.
BioCT and its members across CT would like to thank this committee and the co-sponsors of SB 379 AN ACT INCREASING THE RATE OF THE CREDIT REFUND VALUE FOR CERTAIN EXPENDITURES BY BIOTECHNOLOGY COMPANIES for its introduction and consideration. BioCT is in strong support of this bill, and urge passage and ultimate inclusion in the state budget revisions.
BioCT held a legislative breakfast in January intentionally before the start of the legislative session. On our economic panel we included my counterparts from Massachusetts and New York and we heard from them how the investments made in their States paid off in droves. They also said investments made today will see an impact in 10 years. Life sciences is a long game investment and not for the risk averse. On average, starts ups may not have any revenue for up to a dozen years. There is tremendous long-term ROI potential not only directly but also indirectly reflected in countless ways this educated workforce supports every key growth area of the state.
Life science growth in our state is necessary for the entire ecosystem directly including manufacturing, professional services, schools and universities, contractors, and engineering. Indirectly, it impacts, storefronts, restaurants, and many other local businesses where employees spend time and money. Biotech Companies spend dollars, not hold dollars. This spend goes toward additional hires, interns, supplies, services, and equipment. This incredibly educated workforce of colleagues with mainly graduate degrees contributes to CT being the second most well educated state through their own education and in the schools, mentoring creating STEM programs, and ensuring underrepresented communities are aware of and enabling options within the life sciences sector.
Currently, Connecticut companies operating at a loss may exchange the research & development tax credit for 65% of its value. Biotech companies use the cash exchange on their research and development efforts by hiring additional staff and purchasing equipment to advance their efforts. The use of these funds is invested directly back into the state through sales and use taxes and income taxes by expanding the skilled biotech workforce. The credit provides a considerable return on investment for the state, which was estimated at $1.24 to $2.36 in net state revenue for every dollar claimed according to an Office of Legislative Research report.
Neighboring states, which have worked hard to create attractive business climates for bioscience companies, are stiff competitors for such entities. An increase in the value of the credit exchange, equal to New York ’s 100% could make a significant impact on smaller biotechnology companies and ensure Connecticut remains an attractive state for this industry.
It can take up to twelve years and a $2 billion investment to bring a drug to market realizing that about 90% will fail. This is a huge amount risk in a capital constrained market. We need to foster a competitive business environment in our state supporting life science innovators and researchers.
R&D tax credits equate to increased job growth and business opportunity. An increase percentage in the tax credit will further increase employment. Connecticut has demonstrated that investment in life sciences has benefits.
$1.1 billion in R&D expenditures in 2020, which translates into a per capita R&D base that is twice the national average.
Thank you for the opportunity to present testimony in support of Senate Bill 379 to enhance the R&D tax credit for the biotech sector in Connecticut. I urge support and passage of this bill.
Respectfully submitted,
Jodie Gillon
President & CEO, BioCT