,i  #aae? ,,congress  #b;d ,session  ,h4
 ,r4 #fhja  ,,9 ,,! ,,h\se ,,(          
,,repres5tatives  ,septemb] #ac1        
#bjah,mr4 ,v>gas 7= himself1 ,mr4 ,?omas
 ,j4 ,rooney ( ,florida1 & ,mr4 ,pet]s7 
introduc$ ! foll[+ bill2 :i* 0 ref]r$ to
 ! ,committee on ,en]gy & ,comm]ce  ,a  
,,bill  ,to e/abli% a ,r>e ,disease     
,!rapeutics ,corporation to enc\rage !  
developm5t ( high-risk1 high-return     
!rapies = r>e diseases1 & = o!r         
purposes4  #a4 ,%ort title ,?is ,act may
 be cit$ z ! ,r>e ,disease ,fund ,act ( 
#bjah or ! ,ra,d ,fund ,act ( #bjah 4   
#b4 ,f9d+s ,! ,congress f9ds ! foll[+3  
7#a7 ,t biom$ic9e is f> m advanc$ today 
?an ev5 a decade ago is indisputable1 b 
break?r\ghs require ye>s ( translational
 rese>* at a co/ ( hundr$s ( millions ( 
doll>s p] trial & h a sub/antial        
likelihood ( failure4  7#b7 ,! drug     
developm5t pipel9e is lad5 ) unfavorable
 probabilities4 ,on av]age1 = e         
#e1jjj-aj1jjj comp\nds t ent] ! drug    
discov]y pipel9e1 j #bej progress to    

precl9ical developm5t--& only "o w      
become an approv$ drug4  7#c7 ,biote* & 
life sci5ces traditional f9anc+ vehicles
 ( private & public equity are becom+   
less effective fund+ s\rces because !   
ne$s & expectations ( limit$ p>tn]s &   
%>ehold]s are n consi/5t ) ! increas+   
complexity1 risk1 & duration ( biom$ical
 innovation4  7#d7 ,indu/ry pr(essionals
 frequ5tly ref] to ! ,valley ( ,dea?--a 
/eadily wid5+ fund+ & res\rce gap t     
curr5tly exi/s betwe5 basic rese>* &    
cl9ical developm5t1 effectively limit+ !
 field ( pot5tial novel !rapies1        
te*nologies1 & treatm5ts = pati5ts4     
7#e7 ,! life sci5ces indu/ry ne$s novel 
approa*es to e>ly-/age drug developm5t t
 bett] manage risk1 l[] capital co/1    
improve rese>* effectiv5ess1 create     
div]se portfolios1 lev]age risk-tol]ant 
capital1 & access new capital s\rces4   
7#f7 ,"o solution is to implem5t a      
f9ancial /ructure 9 :i* a l>ge numb] (  
biom$ical programs are fund$ by a s+le  
entity to sub/antially div]sify !       

portfolio & !reby r$uce risk4 ,! entity 
c use securitization to f9ance its      
activities by issu+ debt1 :i* op5s up a 
mu* l>g] pool ( capital = inve/m5t4     
7#g7 ,?is approa* involves two          
compon5ts3 7,a7 ,creat+ l>ge div]sifi$  
portfolios1 call$ megafunds1 consi/+ (  
biom$ical products at v>i\s /ages (     
developm5t4  7,b7 ,/ructur+ ! f9anc+ =  
^! portfolios z comb9ations ( equity &  
securitiz$ debt4  7#h7 ,?is innovation  
makes ! inve/m5t opportunity mu* m      
attractive to a l>ge pool ( in/itutional
 inve/ors t h hi/orically n p>ticipat$ 9
 f9anc+ = e>ly-/age !rapeutic           
developm5t4  7#i7 ,div]sification r$uces
 risk1 s t an entity c issue debt &     
equity1 r ?an ! equity-only inve/m5ts   
typically made by v5ture capital4  7#aj7
 ,a s]ies ( pe]-review$ simulations     
conduct$ by rese>*]s at ,,mit sugge/$ t 
a mode/ megafund model c\ld be          
successfully implem5t$ = r>e diseases   
7e4g41 r>e g5etic disord]s1 p$iatric    
canc]s1 & orphan diseases7 ) z few z t5 

to tw5ty comp\nds & only #djj million 9 
capital4  7#aa7 ,a r>e disease          
!rapeutics fund c\ld s]ve z a viable    
pilot project1 :ile m9imiz+ gov]nm5tal  
exposure4  7#ab7 ,9 addition to appeal+ 
to traditional biote* ,,vc inve/ors1    
megafund inve/m5ts may be attractive to 
p5sion funds1 insurance companies1 & o!r
 l>ge in/itutional inve/ors1 :ile also  
pot5tially l[]+ drug prices = pati5ts & 
! heal?c>e sy/em4  7#ac7 ,! ,food &     
,drug ,adm9i/ration 7,,fda7 may grant ! 
orphan designation = !rapies be+ /udi$ =
 a r>e disease or condition affect+ few]
 ?an #bjj1jjj p 9 ! ,unit$ ,/ates1 :i*  
r$uces co/s & provides f9ancial         
inc5tives to enc\rage developm5t ( su*  
!rapies = und]s]v$ pati5t populations4  
#c4 ,r>e ,disease ,!rapeutics           
,corporation  7a7 ,e/abli%m5t  7#a7 ,9  
g5]al ,! ,secret>y ( ! ,treasury %all   
organize "u ! laws ( a ,/ate a          
corporation to be kn[n z ! ,r>e ,disease
 ,!rapeutics ,corporation 7h]e9aft] 9   
?is ,act ref]r$ to z ! ,corporation74   

7#b7 ,qualifi$ portfolio manag] ,z soon 
z practicable aft] organization1 !      
,corporation %all hire a qualifi$       
portfolio manag] ^: m&ate w be to       
acquire & manage a portfolio ( biom$ical
 rese>* assets on behalf ( !            
,corporation4  7b7 ,purpose ,! purpose (
 ! ,corporation %all be to pur*ase      
rights to1 fund ! developm5t (1 &1 once 
develop$1 sell own]%ip int]e/s 9 r>e    
disease !rapeutics4  7c7 ,privatization 
( ! ,corporation  7#a7 ,9 g5]al ,z soon 
z practicable aft] ! e/abli%m5t ( !     
,corporation1 b 9 no case lat] ?an #b   
ye>s aft] ! date ( enactm5t ( ?is ,act1 
! ,secret>y %all issue equity /ock 9 !  
,corporation to private inve/ors4  7#b7 
,t]m9ation ( ,gov]nm5t own]%ip ,^u !    
issuance ( ! equity /ock describ$ "u    
p>agraph 7#a71 ! ,gov]nm5t %all no long]
 hold any own]%ip int]e/ 9 !            
,corporation4  7#c7 ,prohibition on     
divid5ds ,! ,corporation may n pay      
divid5ds on ! equity /ock ( !           
,corporation :ile !re are any out/&+    

gu>ante$ bonds ( ! ,corporation issu$   
pursuant to subsection 7e77#a77;,a74    
7d7 ,sale ( own]%ip int]e/s  7#a7 ,9    
g5]al ,! ,corporation-- 7,a7 may sell a 
r>e disease !rapy own$ by ! ,corporation
 at any "t2 &  7,b7 %all sell any r>e   
disease !rapy own$ by ! ,corporation    
prior to ! comm5cem5t ( a phase #c /udy 
7z su* t]m is def9$ 9 section           
#cab4ba7;b7 ( title #ba1 ,code ( ,f$]al 
,regulations 7or any successor          
regulations774  7#b7 ,sale requirem5ts  
,9 any sale ( a r>e disease !rapy1 !    
,corporation %all make su* sale ?r\gh an
 op5 & transp>5t arms-l5g? process & on 
comm]cially reasonable t]ms1 :i* may    
include lump sum1 upfront paym5ts1      
mile/one paym5ts1 royalty paym5ts1 or   
any comb9ation !re(4  7e7 ,fund+ ?r\gh  
bond issuances  7#a7 ,9 g5]al ,!        
,corporation %all issue "o or m classes 
( bonds1 ) a maturity ( no m ?an #ab    
ye>s & c>ry+ su* int]e/ z ! ,corporation
 det]m9es appropriate3  7,a7 ,gu>ante$  
bonds ,! ,corporation %all issue a class

 ( bonds1 9 an aggregate am\nt ( n m ?an
 #cej1jjj1jjj1 t is gu>ante$ by ! ,unit$
 ,/ates4  7,b7 ,ungu>ante$ bonds ,!     
,corporation may issue "o or m classes (
 bonds t are back$ by ! ,corporation1 b 
are n gu>ante$ by ! ,unit$ ,/ates4  7#b7
 ,debt-to-equity ratio ( gu>ante$ bonds 
,! ,corporation may n issue any gu>ante$
 bond pursuant to p>agraph 7#a77;,a7 if 
! issuance ( su* bond w\ld cause !      
,corporation to exce$ a debt-to-equity  
ratio ( #a to #a4  7#c7 ,gu>antee fee ,!
 ,corporation %all pay ! ,secret>y a    
gu>antee fee1 :i* %all be set by !      
,secret>y 9 an am\nt equal to ! expect$ 
co/ ( gu>antee+ bonds ( ! ,corporation  
"u p>agraph 7#a77;,a74  7f7 ,treatm5t "u
 ! securities laws  7#a7 ,9 g5]al ,=    
purposes only ( ! securities laws-- 7,a7
 securities ( ! ,corporation %all be    
deem$ to be securities t are n issu$ or 
gu>ante$ by ! ,gov]nm5t2 &  7,b7 !      
,secret>y %all be deem$ to n be an      
in/rum5tality ( ! ,gov]nm5t4  7#b7      
,accr$it$ inve/or requirem5t ,securities

 issu$ "u ?is ,act may only be pur*as$  
by accr$it$ inve/ors4  7g7 ,corporation 
n gu>ante$ by ! ,unit$ ,/ates ,except z 
provid$ "u subsection 7e77#a77;,a71 !   
full fai? & cr$it ( ! ,unit$ ,/ates %all
 n be pl$g$ to ! ,corporation or any    
security ( ! ,corporation4  7h7         
,div]sification requirem5t ,!           
,corporation %all1 dur+ ! #c-ye> p]iod  
beg9n+ on ! date t ! ,corporation fir/  
pur*ases rights to a r>e disease        
!rapeutic1 pur*ase ! rights to at lea/  
#ae r>e disease !rapeutics4  7i7        
,au?orization ( appropriations  7#a7 ,9 
g5]al ,!re is au?oriz$ to be appropriat$
 to ! ,secret>y #c1jjj1jjj to e/abli% ! 
,corporation & complete ! privatization 
( ! ,corporation4  7#b7 ,repaym5t (     
appropriations ,n lat] ?an ! end ( !    
#cf-mon? p]iod beg9n+ on ! date !       
,corporation is privatiz$ pursuant to   
subsection 7c71 ! ,corporation %all     
reimburse ! ,gov]nm5t = ! am\nt ( any   
appropriation made pursuant to p>agraph 
7#a71 plus int]e/ on su* am\nt4  7j7    

,sunset ,! ,corporation %all t]m9ate    
aft] ! end ( ! #ah-mon? p]iod foll[+ !  
lat] (-- 7#a7 ! date on :i* ! la/ bond  
issu$ "u subsection 7e7 matures2 &  7#b7
 ! date on :i* ! ,corporation receives !
 f9al paym5t = ! sale ( all r>e disease 
!rapeutics own$ by ! ,corporation4  #d4 
,def9itions ,= purposes ( ?is ,act3 7#a7
 ,accr$it$ inve/or ,! t]m accr$it$      
inve/or has ! mean+ giv5 su* t]m "u     
section #b7;a7 ( ! ,securities ,act (   
#aicc 7#ae ,u4,s4,c4 #gg;b7a774  7#b7   
,corporation ,! t]m ,corporation means !
 ,r>e ,disease ,!rapeutics ,corporation 
e/abli%$ "u section #c7;a74  7#c7 ,r>e  
disease !rapeutics ,! t]m r>e disease   
!rapeutics means a comp\nd1 biologic1   
m$ical device1 or companion diagno/ic t 
has be5 designat$ z a !rapy = a r>e     
disease or condition pursuant to section
 #ebf ( ! ,f$]al ,food1 ,drug1 &        
,cosmetic ,act 7#ba ,u4,s4,c4 #cfj;bb74 
7#d7 ,secret>y ,! t]m ,secret>y means ! 
,secret>y ( ! ,treasury4  7#e7          
,securities laws ,! t]m securities laws 

has ! mean+ giv5 t t]m "u section #c7;a7
 ( ! ,securities ,ex*ange ,act ( #aicd  
7#ae ,u4,s4,c4 #gh;c7a774