Biotech companies are great candidates for R&D tax credits because of the constant research and development being performed. Biotech companies that take innovative steps in the research and advancement of pharmaceuticals, biotechnology, medical devices, and other life sciences are eligible to obtain R&D credits. In addition, biotechnology and pharmaceutical companies have been moving away from investing their resources into only one or two drugs at a time, and are instead investing their resources into a larger portfolio of products, giving them more opportunities to claim the credit.
Qualifying research activities include
- Developing new or improved pharmaceuticals, biologics or medical devices
- Developing improvements to increase shelf life of a product
- The reformulation of an existing drug to reduce side effects or dosage
- Designing and developing certain hardware and software systems for use in research and clinical development
- Improving the manufacturing process of a drug
- Developing new uses for existing drugs
- Establishing a new factory or production line where new technology is employed or new manufacturing techniques are used
- Developing technology for compliance with EPA requirements
The biotech field covers a wide variety of industries and activities that have a high success rate for qualifying for R&D credits.