Sarbanes-Oxley 404(b) compliance causing problems for emerging biotechs

The USA lobby group Biotechnology Innovation Organization (BIO) released a new report, “ Science or Compliance: Will Section 404(b) Compliance Impede Innovation by Emerging Growth Companies in the Biotech Industry?” on Monday, coinciding with National Inventor’s Day.

The report shows the detrimental impact of Sarbanes-Oxley 404(b) on biopharmaceutical emerging growth companies (Bio-EGCs) and demonstrates how this regulatory requirement harms innovation and capital formation without any corresponding investor benefit.

“It’s an exciting time for the life sciences sector,” says Jim Greenwood, president and chief executive of the BIO,“but we must do more to protect small business innovators from regulatory burdens that are counterproductive to their mission. As this study proves, failing to exempt pre-revenue biotech companies from costly and unnecessary regulations is harming innovation, capital formation, and the ability of companies to develop breakthrough medicines and cures.”