The biotechnology industry is driven by innovation: it’s a sector where it’s important to constantly seek new solutions in different areas, and where the results of research and development are present in our daily lives. The industry brings new treatments and diagnostic tools to the population, revolutionizing the production of crops and products, as well as studies for the development of clean energy and waste reduction.

In recent years, the U.S. biotechnology market has presented itself as a dynamic environment of companies, research institutions, academic centers, and government initiatives. The collaboration of each party develops a range of brand-new products and activities. According to the U.S. Biotechnology Market Report made by Vision Research Reports, the biotech market size was valued at $552.43 billion in 2023, with the healthcare segment holding the largest share of revenue (by application), accounting for 45%. In terms of technology, DNA sequencing was the flagship, and nanobiotechnology, a relatively new segment, presented the greatest growth prospects for the coming period.

R&D Tax Credit

The Research and Development Tax Credits (R&D Tax Credits) are dollar-for-dollar savings on a company’s tax liability for certain domestic expenses related to the development, design, or improvement of products, processes, formulas or software. R&D tax credits were enacted into the law since 1981 to stimulate investment in innovation within the U.S. by allowing companies to claim a portion of their R&D expenses, which include wages, supplies, and contract research costs.

The benefit is essential to promote continued investment in biotechnology and facilitate a broader dedication of companies, startups, and SMEs for their expenses and risks in innovation. To accelerate their research efforts and ensure the gradual growth of the sector.

There are a variety of uses for R&D in the biotechnology industry, across different fields, including:

Climate Change Solutions

Food and Agriculture Innovation

Supply Chain Resilience

Human and Animal Health

Cross-Cutting Advances

Some examples of qualifying R&D activities in the sector are:

Clean Technology Development

Development of 3D printing processes to artificially generate cells and tissue

Development/implementation of Artificial Intelligence software to improve testing accuracy

Creation of new pharmaceutical drugs

Use of technology to create new drug manufacturing systems

Development of a new process to scale up production

Development of CRISPR technology to adapt gene sequences to have desired characteristics

Development of new versions of products to improve shelf stability or reduce side effects

Development/improvement of tools for a more accurate quality control testing process with better feedback

Improvement of product quality specifications with eco-friendly materials

As a capital-intensive industry that is extremely dedicated to innovation in its most diverse aspects, biotechnology has ongoing costs in terms of equipment and laboratory space, supplies, raw materials, hiring, clinical trials, and other expenses related to the research and development processes. Therefore, the R&D Tax Credit can be an essential element for companies within the industry to be able to remain dedicated to their respective research, regardless of their size and field of study.

How Can We Help You?

The first step to claiming the R&D Tax Credit is to identify your company’s eligibility and then file Internal Revenue Service (IRS) Form 6765. Claiming the benefit might seem daunting, which is why it’s always best to have a specialized perspective on what activities and elements can actually be claimed, and how to properly complete each step of the process, which involves a lot of detailed R&D documentation, dedication, and attention to the guidelines to be followed.

In FI Group, we specialize in helping companies finance innovation and secure funding for their Research and Development (R&D) activities through the comprehensive management of R&D Tax Credits. With more than 1,400 qualified employees, counting on specialists from different fields, we are committed to supporting companies of all sizes and in all sectors of activities. With our expertise, FI Group specialists can support your company in identifying qualified activities.

Source:

https://www.visionresearchreports.com/us-biotechnology-market/41266

R&D in the Biotechnology Industry

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