Life Sciences Community:

Funding for research-intensive industries is under threat at the federal and state level. This update outlines what we know right now and how Colorado BioScience Association continues to advocate for the best interests of our members and the life sciences ecosystem.

COLORADO FUNDING CUTS 
For several months, CBSA has emphasized the threat of Colorado’s state budget shortfall to critical programs that fund innovation industries in Colorado, including life sciences. We have been working closely with our partners at Colorado’s Office of Economic Development and International Trade (OEDIT), members of the Colorado State Legislature’s Joint Budget Committee (JBC), our advanced industries partners, and the policymakers who champion innovation.

The estimated $750M state deficit means members of the JBC and department heads (including our partners at OEDIT), face difficult decisions.

Advanced Industries Accelerator Grant Programs
Colorado’s Advanced Industries Accelerator Grants fuel our state’s position as a global hub for health innovation and advanced technologies, providing critical sources of nondilutive funding for our life sciences community and delivering significant returns for our state. Currently, OEDIT is requesting temporary reductions of approximately $17.7M over a two-year period to the programs. These reductions are not expected to affect existing grant commitments, but they could result in up to 80 fewer grants awarded to advanced industry companies over the next two years.

CBSA consistently stresses the importance and return on investment (ROI) of these programs in direct conversations with partners and key stakeholders. Since 2016, $151M in grants have attracted $2.9B in follow-on capital, supporting the formation of 124 companies, and creating more than 5,000 high-paying jobs. This incredible ROI generates tax dollars to finance the legislature’s highest priorities, including infrastructure projects, schools, roads, and safety net programs.   

Funding for these programs was reduced in 2020. CBSA successfully advocated for a one-time, $10 million infusion in 2021 (SB21-042), to reauthorize the programs in 2023 (SB23-066) and, in 2024, to restore full funding until 2034 (HB24-1396). This year, it’s a different environment.

Because of the complexity of the budget negotiations and decisions at the JBC, CBSA’s Policy + Advocacy team is continually engaging in direct conversations with partners and key stakeholders, strongly advocating for decisions that provide the best possible outcome for life sciences and Colorado’s competitiveness in this tough environment. Read CBSA’s Letter to the JBC. 

Advanced Industry Investment Tax Credit
The Advanced Industry Investment Tax Credit program stimulates Colorado’s economy by incentivizing investments in advanced industry small businesses and benefits both businesses and investors.

This year, legislation has been introduced (HB25-1157) extending the credit through 2031. The bill also proposes a reduction in the total annual cap on the Advanced Industries Investment Tax Credit from $4M to $2.5M for the 2027-2031 calendar years. 

CBSA successfully led a coalition of advanced industries to increase the tax credit from $750K to $4M in 2022 (HB22-1149). Before the increase, the tax credits were exhausted by qualified investors early in the year. In 2023 and 2024, the expanded credits weren’t fully used by investors. For life sciences, this coincides with a significant drop in the investment types qualifying for the tax credit, during two challenging years for early-stage life sciences fundraising nationally.

CBSA’s goal is to preserve the highest possible cap for available tax credits to support the needs of our early-stage companies and Colorado-based investors.  

FEDERAL FUNDING
Trump Administration Executive Orders on federal funding for research and clinical trials; Diversity, Equity, and Inclusion (DEI); and international aid are causing disruption and uncertainty for life sciences. Companies and academic and research institutions are grappling with frozen funding, suspended clinical trials, limited access to vital health data, and sudden staffing changes at federal health and regulatory agencies.  

In 2024, Colorado companies and academic and research institutions received close to $500M in federal grants from the National Institutes of Health (NIH) and the National Science Foundation (NSF) supporting life sciences research and development. Suspended or reduced federal funding is a major blow to our state’s leadership in health innovation. More than 40 companies and organizations, including all five of Colorado’s R-1 designated research universities and the country’s leading respiratory hospital received federal funding last year.

Colorado BioScience Association applauds Attorney General Phil Weiser for standing up to protect NIH funding and joining Attorneys General from 22 states in a lawsuit to halt NIH funding cuts.

CBSA’S ADVOCACY
This is a challenging environment for our Colorado life sciences community and every health innovation ecosystem in the U.S. Every day, the CBSA Policy + Advocacy team will continue to emphasize the importance of programs that support health innovation, champion our ecosystem’s success stories, and advocate for our community’s best interests.

We are a resilient, collaborative ecosystem and we are confident that we will navigate these severe challenges by working together.

If you are impacted by federal or state funding, we encourage you to share your success stories and challenges with us. Please contact Amy Goodman, Vice President and Counsel for Policy + Advocacy.