Why It Matters

Dragonfly Therapeutics is launching its inaugural advocacy efforts with a strategic focus on R&D tax deductibility.

A 2017 tax law change requires biotech companies to amortize R&D expenses over five years rather than deducting them immediately—a significant burden for pre-revenue clinical-stage firms. Multiple bills, including the American Innovation and R&D Competitiveness Act of 2025 and the American Innovation and Jobs Act, seek to restore immediate expensing. Bipartisan congressional support frames R&D tax relief as essential for U.S. competitiveness against China.

By the Numbers

Dragonfly began lobbying on March 28, 2024, reporting $50,000 in expenditures across five disclosures focused solely on "deductibility of research and development expenses."

The company hired FGS Global (US) LLC and spent $50,000 across five disclosures. In June 2024, Dragonfly escalated efforts by registering elite tax policy lobbyists—Paul Wendling Poteet and Rachel Cariker Alexander—both with senior experience on the Senate Finance Committee and House Ways and Means Committee.

The two senior lobbyists added in June provide comprehensive coverage of both chambers’ tax-writing committees

The Agenda

Dragonfly lobbies exclusively on restoring immediate R&D expense deduction, reversing the 2017 provision requiring five-year amortization. The company joins a broad coalition including other biopharmaceutical companies and the National Association of Manufacturers supporting the American Innovation and R&D Competitiveness Act of 2025 and American Innovation and Jobs Act.

Broader Context

Multiple pressures converge on biotech: venture capital funding collapsed 65% year-over-year, creating a "valley of death" for clinical-stage companies. Meanwhile, Chinese companies now initiate 30% of global clinical trials, nearly rivaling the U.S.’s 35%. The National Security Commission warns the U.S. has roughly three years to mount an effective response. Additionally, the Trump administration proposed an $18 billion NIH budget reduction.

Between The Lines

Congressional momentum is strong and bipartisan. Senators Angus King, Tammy Baldwin, and John Kennedy have publicly championed the cause. House members like Beth Van Duyne and Richard Hudson promoted R&D expensing in broader tax proposals. Senator Tommy Tuberville introduced separate legislation expanding R&D deductions.

Competitive Landscape

Dragonfly joins a cross-sector coalition including Intra-Cellular Therapies Inc., Vertex Pharmaceuticals Inc., Exelixis Inc., and semiconductor company SkyWater Technology Inc. Even the National Stone, Sand and Gravel Association supports the effort, demonstrating broad industry backing for multiple bipartisan bills.

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