Investment Law, Tax Law and the Biotechnology Industry

4. Robert Langer, a faculty member at MIT 's prestigious Whitehead Institute, is mentioned in the article. He is a member of the Scientific Advisory Board of In Vivo Therapeutics and has a long list of accomplishments. As a faculty member should he or others who are full time faculty members at any university or college have constraints on their contributions to and activity with biotechnology companies? How might you design a fair strategic plan that would allow university research faculty to translate their work into new medical devices or practices that have both commercial and medical potential?

In 1938, and in the teeth of the longest and fiercest depression that the United States had ever known, capital spending hit an all time high. That’s right! In 1938 the men who owned America began to pour millions of Dollars into new plant and equipment as if there was no tomorrow. We don’t think much about it today, because it has been a long time since the United States has experienced a real bone jolting economic slowdown. The fact is, however, that the very best time for the industrialist to invest in new technologies is in the middle of a depression. This is because it is at such times that labor, raw materials, and new equipment can be purchased at rock bottom prices. Henry Ford may have jumped the gun a bit. He shut down his River

1. Explain how the biotechnological revolution is different from past scientific changes in the world

Protection of intellectual property are investments based on acquired knowledge, thought and effort by one or multiple individuals on behalf of themselves, the business they work for when the property is created, and a financial investment. Each of these – acquired knowledge, thought, physical effort, financial investment – have a value that can be attached as it relates the usefulness or importance of the resulting product. That value will have a level of importance to the individual(s) creating the product and if applicable, the investor providing the funds in support of the creation.

It is intended both to provide thumbnail descriptions of the various intellectual property regimes to economists working in this area and to indicate where additional economic research might be useful. The other papers in this symposium provide important examples of ongoing research on the economics of intellectual property. Suzanne Scotchmer analyzes the complex effects of patent protection when innovation is cumulative. Rather than analyzing situations in which several firms vie to develop the same innovation-the approach of the "patent race" literature-her analysis examines circumstances in which only one firm can develop an initial innovation but others can also build upon it. She focuses on how the incentive to develop both the initial and subsequent inventions may be affected by the scope of patent protection. Janusz Ordover considers ways of adjusting the patent system that may help to both provide returns to the inventor, and encourage the diffusion of the innovation in the economy. His paper is part of a line of work that explores the place of the intellectual property system among the large number of institutions that affect the amount and nature of research and development that takes place. In the final paper, David

While the United States touts free market policies as main guiding principles, U.S. policy makers have actively used research and development (R&D) industrial policies to maintain and grow the U.S. economy. There are two types of R&D, also known as research and experimentation (R&E), funding models; one is direct federal research dollars given to industry, typically for basic research, and the other in the use of tax credits for R&D activities. Tax credit policies began in 1981 as part of the Economic Recovery Tax Act (Talley, 2011). The U.S. has long funded R&D, however this funding has steadily decreased with the total in 1976 of just over 1.2% of GDP with dropping below .8% of GDP in 2014 (AAAS, 2014a). As of 2013, South Korea, Finland, Japan, Taiwan, and Germany all outspend the U.S. on direct R&D funding relative to GDP (AAAS, 2014b). The IMF and OECD indicate that R&D tax credits are a main growth strategy for the G-20 nations (IMF, 2014). This research topics explores how the United States domestic industrial policies supporting research and development influence business and entrepreneurial behaviors within the U.S., which industries has this benefited the most, overall societal impacts of advancements in technology and automation, and finally how this supports comparative advantage for the United States as well as implications for developing nations.

My experiences at the Demo Day solidified my fascination in the ecosystem of startups and venture capital. Unlike software where objects are definite and fulfill specific conditions, entrepreneurship represents an exciting uncertainty where success can be defined in myriad ways. However, due to the inherently uncertain nature of startups, a recurring theme among the startups I met was the need for funding to convert their dreams into realities. As the Demo Day ended, I determined that although creating a startup would be exhilarating, I want to become a venture capital investor. I decided that these innovators shouldn’t have to be concerned with funding and that becoming a venture capital investor would allow me to remove their limitations and join them on their paths to success.

Genentech’s second challenge was manifested in deciding which business model to use. Genentech had to assess if pioneer technology that creates artificial DNA could flourish in a generating money-making product. During the genesis of Genentech, a conscious decision was made to assimilate the business model of large pharmaceutical companies. The pharmaceutical industry was driven by the creation of blockbuster producing drugs. This decision to adopt this business model was made despite the industry's giants facing decline in sales from expiring patents and lack of new innovative drugs to replace them.

They began to sell shares in their company and therefore, shareholders shared in the profits but also the losses. The infusion of capital gave the businesses the ability to grow into

All of this innovation needed entrepreneurs to use capital to put the inventions to work, and

The book From Alchemy to IPO: the business of Biotechnology (2001) was a wonderful read. Although a little outdated (before the 2008 financial crisis), Cynthia Robbins-Roth was able to capture the thrill of starting the first biotech companies, the struggle to keep the companies afloat during down markets, as well as the elation of success when a company succeeds where others failed. I was astounded that any new company could survive the decade long march to putting their first product on the market, but Robbins-Roth provided direct quotations from the major investors that stuck with the market when most other investors had pulled out. These quotes, by the end of the book, gave me a much better understanding not only of the biotech industry but also the mentality of the major investors in the field. Although the sector is teeming with risky investments, if you educate yourself about the companies and understand the science involved, and be ready for the long-haul it is possible to lower your risk to reasonable levels.

Companies such as Digital Equipment Corporation, Apple, Federal Express, Compaq, Sun Microsystems, Intel, Microsoft and Genentech are famous examples of companies that received venture capital early in their development.

Biotechnology is a broad term. Basically, it is the “tools and techniques [opening] new research avenues for discovering how healthy bodies work and what goes wrong when problems arise”(Siedler para. 1). It covers controversial technology and procedure, like genetic engineering and gene therapy. It is controversial because it can affect everyone(Jeremy para. 16). As a consequence, the development of biotechnology has been a “slow, quiet progress”(Kirsner para. 3) because society may or may not recognize the repercussion of it. However, scientist like Smith- a previous chief for the Cambridge biotech company, Genzyme- continues to develop biotechnology(para. 1). Because biotechnology can be controversial, yet scientist continues to develop it;

Colonel Lilly founded Eli Lily and Company in 1876, because he felt there was a lack of high quality medicine on the market at the time. He also felt the most medicines on the market were ineffective in the curing of ills. In the case “Review Corporate Venture Capital at Eli Lilly and Company”, describes the issues surrounding Eli Lily and Company venture capital arm by showing the struggles the company went through in establishing a corporate venture capital fund. It takes you through the choices that were made keeping in mind the benefits to Eli Lilly and Company as well as keeping the Venture Capital arm separated from the company. This allowed Eli Lilly and Company to benefit from its investments, and kept the

New economic activities are emerging that are representative of technocapitalism. Biotechnology, nanotechnology, bioinformatics, software design, genomics, molecular computing and bio-robotics, for example, are likely to be hallmarks of the twenty-first century, as electronics and aerospace were in the twentieth. This new ecology of activities and sectors is more reliant on creativity and knowledge than any of the old industries of industrial capitalism. These new sectors are providing the technologies that the twenty-first century will most likely be associated with. Corporations that live or die by their global research capabilities, where research is far more important than any other function, and where corporate appropriation of research results is the key to profit, control of these new sectors. Turning research creativity into a commodity thereby acquires fundamental importance in the global drive for greater corporate profit and power, in much the same way that turning raw materials and factory labor into commodities was fundamental for the corporations of