SACRAMENTO, Calif.– Biocom California, the association representing the California life science industry, issued the following statement regarding the announcement from the Governor and Legislative Leadership that business tax credits for research and development, as well as net operating losses that were temporarily limited at the height of the pandemic, will be restored for 2022 and beyond.
“California’s life sciences economy and research and development ecosystem is a great wonder of the modern world and this agreement helps us secure California as the nexus for this critically important industry for years to come,” said Joe Panetta, Biocom California’s President and CEO. “When you reflect on the profile of the industry across the state, Biocom California’s members are overwhelmingly small to mid-sized companies with over 70% having fewer than 100 employees, and it is often a race against the clock that takes years or decades from concept to FDA clearance or approval. These companies need the tax certainty in this agreement to make the long-term planning decisions that their complex business models require. When we support life-saving research here in California, our future will always be bright. I want to applaud the Governor and legislative leadership for working so hard to get this done.”
“As a fast-growing life science company headquartered in Los Angeles, a competitive, stable and predictable statewide business climate is essential to us,” said Bassil Dahiyat, Ph.D., President and CEO of Monrovia-based Xencor. “We were founded in California because of the rich and diverse talent pool, the thriving ecosystem for innovation and access to the incredible research institutions and university base. This announcement gives us the certainty we need so we can continue to develop new medicines to treat patients with life-threating diseases and to contribute to growing California’s economy.”
Mr. Panetta continued, “Biocom California’s member companies have not only been a key economic driver but are also creating the tools needed to combat the COVID-19 pandemic and return life to normal. Biocom California’s members have been critical in the development of new therapies, including drugs and devices needed to save lives, diagnostic testing, personal protective equipment and safe and effective vaccines.
“According to Biocom California’s 2021 California Economic Impact Report, the life science sector in California countered some of the year’s negative economic forces that damaged large parts of the state’s economy due to the COVID-19 pandemic. Total direct employment reached close to 489,000 in 2020 while the industry supported indirectly 1.38 million jobs across the state, including high salary jobs that support both working class and middle-income families. Reflecting some of the high salaries in research and other positions in the field, average total compensation totaled $134,000.
“California’s 489,000 Life Science jobs are dispersed across all six of its primary sub-sectors – research, medical device manufacturing, and biopharmaceuticals represent the largest shares of the sector’s overall jobs.”
The legislature is expected to introduce and pass the budget bill on an expedited basis within weeks and the Governor is expected to sign it, restoring the tax credits immediately upon his signature.
