RE:RE:RE:RE:RE:RE:Big pharma is set to keep signing bigger deals in 2024ONCY has approximately $500 million in R&D expenses that can be transferred to ONCY's acquirer to be written off against other revenue, which benefits a Big Pharma company operating in the United States, since 100% of ONCY's costs can be written off, in contrast to US generated R&D costs.
In 2021 the US imposed changes to the way it allows companies to deduct R&D expenses such that now most companies must amortize those costs over 5 years. Starting in 2022, companies can no longer write off 100% of costs in the year they were incurred. Instead, to comply with these new rules, companies must amortize most of those costs over five years (15 years for R&D expenses attributed to foreign research)..
This is one of the reasons that Roche/Genentech has contributed to the company's decision to dramatically reduce its in-house R&D activites and like other Big Pharma companyies, is looking to M&A to replenish its product portfolio with new drug candidates.
Consequently the positive impact form small biotech companies are larger deal values, particuarly for late-stage clinical development companies, like ONCY, that are seeking near term Accelerated Approvals and near term market entry for their drug products..