Editor’s Note: James Greenwood, President and CEO of the Bio Industry Organization emailed this letter about the JOBS Act and a link to an FAQ on the BIO site about the act, which provides regulatory relief and was passed by Congress this past spring. Below is the text of Greenwood’s letter:
Dear BIO Member:
I am sure you have heard about the recent upswing in biotech public offerings. Since Congress passed the JOBS Act last spring, there have been 42 IPOs in our industry – and counting! BIO was a very strong advocate for the JOBS Act, and the increase in public financing over the past year and a half has shown how public policy can affect the day-to-day operations of emerging companies. The biotech story of capital-intensive research that can lead to life-changing medicines rang true with policymakers, and the recent offerings fueled by the JOBS Act will provide funds that can help speed the delivery of cures and treatments to patients in need.
I want to make sure you are aware of another provision in the JOBS Act that took effect this week. As of September 23, companies are now able to use general solicitation to advertise to investors when conducting an offering under Rule 506 of SEC Regulation D, as specified by the law. Rule 506 is a popular capital formation outlet that allows issuers to raise an unlimited amount of capital from accredited investors, and the JOBS Act reforms to the process should further increase its utility.
BIO has prepared an overview of the new opportunities available under Rule 506(c) and the requirements for issuers wishing to take advantage of them. Please click here to access this FAQ document. This member service is a non-legal policy overview of the statute, designed to help keep you informed on the new rules. It is not intended to, and does not, constitute legal advice – please consult your own legal team if you are considering an offering or have any specific questions about the statute or relevant SEC regulations.
BIO is continuing to work in Washington to facilitate capital formation for growing biotechs across the country. We are hopeful that the reforms to Regulation D will support biotech offerings, and we will continue to engage with Congress, the SEC, and the Administration to bolster capital markets access and efficiency for emerging innovators. If you have any general questions about the JOBS Act or Regulation D, feel free to contact Charles Crain on BIO’s staff at [email protected].
James C. Greenwood
President and Chief Executive Officer