Biotech Firms Eagerly Await Health Reform Research Aid

Biotechnology companies in Pennsylvania and New Jersey are champing at the bit for a slice of the $1 billion in grants and tax credits being made available under the health-care reform legislation passed in March.

Applications for the Qualifying Therapeutic Discovery Project grant program are expected to become available June 21. The deadline to apply is July 21.

Under the program, being administered by the U.S. Treasury Department, businesses with 250 or fewer employees will be eligible for up to $5 million in tax credits or grants for 50 percent of the costs incurred in 2009 and this year for developing “promising” therapies to prevent, treat or diagnose a variety of diseases and conditions. Credits will be issued to profitable firms, while those not yet generating revenue will be eligible for grants.

“For a company like us that isn’t making money yet, the chance for free money, in essence, is wonderful,” said Robert Alonso, president and CEO of Yaupon Therapeutics Inc. of Radnor.

Yaupon has four products in various stages of development, but it intends to seek grant money for its most advanced product, Clearazide, a treatment of cutaneous T-cell lymphoma and the skin lesions caused by the cancer.

Tom Hess, Yaupon’s chief financial officer, said the company spent about $3 million developing Clearazide last year and will be applying for a grant to recoup about $1.5 million under the program.

Part of the application process, he said, will be a 250-word essay outlining the research and the opportunities for a company to create new high-paying jobs. “We think we are in the sweet spot because we are in the late stages of development, and if we get approval [for Clearazide] we will increase our employment” with the addition of manufacturing and possibly sales jobs, Hess said.

Alonso said the company expects to file a new drug application for Clearazide with the Food and Drug Administration by the end of the year.

Edward F. Smith, chief financial officer at PolyMedix, said the Radnor biopharmaceutical has no shortage of potential therapeutic products it would like to develop — but it is limited by the funding it’s been able to raise from private investors.

Smith said PolyMedix plans to apply for grants covering its two lead new drug candidates: PMX-60056, an anticoagulant reversing agent; and PMX-30063, an antibiotic that mimics natural host defense proteins. Its expenses for both products would likely reach the funding program’s $5 million cap, he said.

Phase-II studies for both products are planned to begin later this year.

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Source: Charlotte Business Journal