Tax credit a shot in the arm for biotech companies

Give If you had the opportunity to help yourself, help others and help the economy in a single move, would you take it?

CPAs with clients for whom the answer is "yes" could do worse than to suggest the Maryland Biotechnology Investment Tax Credit.

The MBITC program provides a 50 percent tax credit -- up to a maximum of $250,000 -- for investments in qualified Maryland biotechnology companies while ensuring that investors retain full equity ownership for their investment. The program encourages investments in one of Maryland's signature industries by cutting investors a sizeable break while providing the funding that will could create cutting-edge discoveries in some groundbreaking areas of biotechnology research.

“This is by far the single best program in the state for creating and sustaining young biotech companies," said David Block, president and CEO of Gliknik Inc. "It serves as a role model for other states and for the federal government.”

Gliknik is a perfect case study of what the tax credit can do. The Baltimore-based company's research is focused on helping patients with cancer and autoimmune / inflammatory diseases. Founded in 2007, Gliknik has received more than $3 million in funding trough the Biotechnology Investment Tax Credit program thus far -- which means investors have gotten back $1.5 million of that money.

Meanwhile, Gliknik has developed new drugs for cancer patients and those with autoimmune diseases. Two of the company's compounds are in the clinical trial phase for patients with advanced head and neck cancer. Others are being tested in laboratory models of cancer, lupus and other conditions.

And the company is hiring -- a remarkable achievement given the current economy.

More important, the investments help see young companies like Gliknik through the early stages of business and product development.

"In our industry, most companies unfortunately will fail," Block said. "But the ones that succeed do so in a big way. In Maryland, MedImmune added 700 jobs last year and will add 700 more this year. Martek recently added 75 jobs. The MBITC program is designed to create the next Maryland-based MedImmune or Martek."

The state benefits as well. According to Block, any tax-paying entity worldwide can invest in Maryland biotechnology through the program. "This means Maryland is attracting new capital from across the country and the world for deserving companies (and) creating relatively high paying jobs in Maryland,” Block said.

Interested CPAs and investors should investigate their options ASAP. Applications are due on June 1, 2009, and Block warns that the application process can be lengthy.

Applications for individual investors, corporate investors and pass-through entities are available here.


Bill Sheridan