A list of awards for all 50 states can be found here.
Below is what I have previously published on the Qualifying Therapeutic Discovery Project Credits and Grants. You can also read the three op-ed pieces that I wrote about the Program by clicking on any of the following links:
“Biotech’s Second Big Win in Healthcare Reform: A Tax Credit Bonanza” Xconomy April 8, 2010
“Biotech’s $1 Billion Tax Credits are Up for Grabs! OK, Now Everybody Relax” Xconomy May 21, 2010
“The Winners of the IRS Biotech Grant Program Are ....” Xconomy November 3, 2010
The rules regarding the Qualifying Therapeutic Discovery Project Credit have now been released by the Treasury Department. Click on this link to find the Fact Sheet as well as the IRS Notice on the Therapeutic Discovery Credit.
As of June 21st, 2009, the IRS has begun accepting applications for the Qualifying Therapeutic Discovery Project Program. The two page application Form 8942 (Application for Certification of Qualified Investments) is now available for downloading from the IRS website, as are the five pages of instructions for completing this form. The applications must be postmarked no later than July 21, 2009.
I have previously reviewed information about the Qualifying Therapeutic Discovery Project Credit and offered the following information on the key points of the legislation:
1) The first thing that everyone can do is relax. In contrast to rumors that have been floating around, the program is not set up on a "first come, first served" basis, and the IRS applications (Form 8942) will not be available until June 21st or thereabouts. Those who had lined up their staffs to work this entire weekend (May 22-23) should send them home early today with instructions to enjoy the weekend!
2) The application period opens on June 21, 2010 and ends on July 21, 2010. The postmark on the application is deemed to be the date of delivery. Preliminary review of the applications is to be completed by Sept. 30, 2010; this is to ensure that applicants are eligible taxpayers and that their applications are complete. Applicants will receive determinations as to whether or not they qualify for credits and/or grants, and how much they will receive, by Oct. 29, 2010. Note: there is no conference or appeals process for these grants and credits. If you don't get one, or you are not happy with the amount awarded, there is no way to change the decision. Separate applications are required for each project that you wish to apply for.
3) The maximum credit or grant that any one company can obtain is $5M, based on certification of $10M in qualified investments, since the credit or grants are funded at a 50% rate. I read a report of one company that had planned on asking for $42M in credits. Not going to happen. The government wants to spread the money around, hence the $5M cap. The money is likely to be spread around geographically as well.
4) The total amount to be spent by the government is currently $1B for the years 2009 and 2010. You can request grants or credits for 2009, for 2010, or for both 2009 and 2010. It is not known if more money will be added at a later date (that is a political decision).
5) Though not explicitly stated, it appears that all projects will be ranked and the money allotted to the highest ranking applications first. According to the published materials "the service determines that the taxpayers project is among the projects that have the greatest potential.....".
6) Applications will require a DUNS number (available for free from Dun and Bradstreet) and must register with the Central Contractor Registration. See the information on the Treasury Department Website for details.
7) Winning companies will have their applications and amounts awarded subject to public disclosure (see the documents on the Treasury Department Website for how this works, and how proprietary information is handled).
8) The government has estimated that the average time that applicants will spend on the applications to be about 12 hours and seven minutes. The estimated number of applicants is about 1200!
9) Brochures, DVDs, and other types of presentations are NOT permitted as part of the application. No additional information can be incorporated by reference.
10) The applications do not appear to be very lengthy. There are some yes and no questions, as well as certain Project Information Memoranda. A project overview is required with a 250 word limit, and there are three additional questions that also have 250 word limits. A few of the questions will allow for the inclusion of five literature citations. Those of you that have written up thousands of words to document your cases are going to have to do some serious editing once the applications come out.
Please note that I am available for writing, editing, and reviewing your applications before their submission.
The original information that I posted on the Qualifying Therapeutic Discovery Tax Credit in still available below:
One of the best opportunities in a long time to obtain money to fund your ongoing research programs will be available soon. I'm talking about the Qualifying Therapeutic Discovery Project Credit, a part of the recent health care reform legislation that is especially favorable to startups and small biotech companies. I am offering my services to assist you in writing and/or assembling one of these grants. Given the short timelines, the limited amount of money available, and the possibility that these grants may be awarded (to those who qualify) on a first come, first served basis, the time to act is now. I am guessing that a majority of biotech companies in the US would stand a good chance of qualifying for one of these tax credits by submitting a well crafted grant in a timely manner; applications are expected to come out in May. Whether you decide to retain my services or not, I would strongly urge you to consider filing an application for this program. Dean Zerbe provided a detailed description of this program in a recent posting on Forbes.com. Here are the highlights of the program, according to that article:
If your biotech company has a tax liability, you can get a 50% tax credit; if you have no tax liability, you can get a grant in the same amount that is tax-free. The credit covers qualified investments in “therapeutic discovery projects”. What defines this? In order to receive the tax credit, the research program must fulfill at least one of the following three criteria:
1) It is designed to treat diseases via preclinical research or clinical studies for the purpose of getting FDA approval of the treatment.
2) It is designed to diagnose diseases or find molecular factors (e.g. biomarkers) related to diseases by developing diagnostics that would be used to make therapeutic decisions.
3) It is designed to develop some methodology that would advance the delivery or administration of therapeutics (e.g. technologies that are being developed to deliver siRNA).
There are some additional criteria that will also be used to judge the research applications:
The research should have direct or indirect medical benefits: the emphasis here will be to fund programs that “will treat areas of unmet medical needs or prevent, detect or treat chronic or acute diseases or conditions”. Programs that will cut long-term health care costs are also favored, as are projects that have the potential of curing cancer. Finally, applications that will create sustainable, high quality jobs and advance US competitiveness in the life sciences should also be preferred.
This one-time program will be a financial boon to those who qualify and have their applications accepted. However, this program is limited in scope: The total amount of tax credits and grants is only $1 billion dollars, and once that money is gone, it’s gone, just like the Energy Star rebates on appliances. The program is designed to cover expenses incurred in 2009 and 2010.
There were a number of questions that I was unable to answer after reviewing the legislation. Virtually none of these questions have been answered to date, but rumors and misinformation abound on the Internet. Therefore, until the final details come out, none of this should be considered set in stone. Some people are expecting that the applications and awarding process will follow the pattern previously set forth within the Advanced Energy Manufacturing Tax Credit (48C) program. However, one clear difference between the two programs is that the energy credits were true credits; the Qualifying Therapeutic Discovery Tax Credits program is also making available outright cash grants. Therefore, things may be quite different this time around. The total amount of funding in the Energy Tax Credit program was $2.3 billion; less than half of that ($1 billion) is available for the Qualifying Therapeutic Discovery Tax Credit program.
Details about the WA State Winners of these grants can be found here.