USA's BIO campaigns for Sarbanes-Oxley reform

The Biotechnology Industry Association, which represents more than 1,100 biotechnology companies, academic research institutes and related centers in 32 countries, including the USA, has issued a statement of support for the Compete Act of 2007 (HR1508 and S869), proposed by House of Representatives member, Gregory Meeks (Democrat, New York), and Senator Jim DeMint (Republican, South Carolina). The proposed legislation would alleviate some of the restrictions imposed on biotechnology firms by Section 404 of the Sarbanes-Oxley (SOX) Act of 2002. The SOX rules were introduced in a reaction against the Enron financial scandal of the late 1990s.

Jim Greenwood, the BIO's president and chief executive, said: "to date, the implmentation of Section 404 has imposed large and unnecessary costs on smaller public companies, with little or no corresponding benefit to investors. This means redirecting funds from R&D, delaying cutting-edge research into the therapies of tomorrow, in order to cover the costs of auditing fees."

At the recent 13th Annual Pharmaceuticals Conference organized by The Economist in London, UK, Louise Makin, chief executive of UK-based biotechnology firm BTG, told the Marketletter that SOX regulations were a deterrent to biotechnology firms from listing on US stock excahnges.