Biotech Companies Expanding in the Western US

June 21, 2012 by  Filed under: Management 

As biotech companies continue to increase and expand in the western United States, issues for biotech companies to take into consideration in correspondence for US market access has become a relatively hot and trending topic. When a foreign biotech enterprise decides to broaden its operations beyond its national borders and into the market shores of the US, the business owner or manager should realize that such decision can harbor not only a great amount of opportunities but also a significant amount of challenges and obstacles, such as where to locate, from where to source workers and how to navigate the different regulatory practices and rules set forth by the foreign country. Below is a detailed outline showing some of the dilemmas and considerations that are required to be made by a foreign biotech organization when preparing for market access into US borders.

For preliminary considerations, assess the local laws and tax penalties for US market access. Another preliminary consideration is the choice of area for business operations within the US. This will be difficult since area of operations will play a major contributing role towards expenses and effectiveness of operations as well as accessibility to mainstream audiences and consumers. Under location for business facility within the US, assess the state incentives, such as tax breaks, state laws and regulations like corporate, insurance or securities and the nearness to the preferable worker pool.

For corporate structure, considerations include the formation of US subsidiaries and the procurement of US firms for US market access. The former consideration involves identifying what type of US entity your business should be able to establish, such as corporations, partnerships, limited liability companies and further on, or whether or not you should operate in the US as a sector.

In terms of the financing structures to consider, biotech firms will have to include accessible federal Economic Development Authorities or EDAs as well as grant courses. Furthermore, US entity credit financing and asset-based or project credit financing should also be included for your financing structure planning and preparation. Venture capitalization should also be taken into consideration as private investment agencies in the US may offer starting funds for a portion or stake in the US entity. Issuance of securities on US public market requirements for international private issuers of the Securities Act and Exchange Act should also be taken into serious consideration for finance structuring. Registration and disclosure requirements should be familiarized with and understood prior entering the US market.

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