BIO welcomes US Sarbanes-Oxley review

The US Biotechnology Industry Organization's president Jim Greenwood has welcomed reports that the Securities and Exchange Commission will ease the auditing standards for small, publicly-traded businesses, including biotechnology start-up firms.

Mr Greenwood said: "for years, small biotechnology companies have been suffocated by the onus of complying with the Sarbanes-Oxley Act. Easing the regulations will enable biotech companies to invest in what they do best: developing new technologies that extend lives and alleviate suffering from horrible diseases that affect families across the world." He added: "our companies typically have limited cash flow and revenue, as it often takes more than a decade to develop revolutionary new therapies."

The Sarbanes-Oxley Act was introduced in response to the Enron financial scandal, where a firm used corrupt accounting practices to manipulate its reported revenue stream. However, the Act has tended to encourage firms to register outside the USA and imposed higher compliance costs on smaller firms.