Surge of EDA Approvals Closes Out Active 2016 for State’s Angel Investor Tax Credit Program
TRENTON (February 14, 2017) – The New Jersey Economic Development Authority (EDA) today announced the approval of a record-breaking 251 applications through the State’s Angel Investor Tax Credit Program in 2016, representing the injection of more than $96 million in private capital into technology and life sciences companies throughout the Garden State. In the fourth quarter of 2016 alone, the EDA approved 198 applications.
Administered by the EDA in consultation with the New Jersey Division of Taxation, the Angel Investor Tax Credit Program offers a 10 percent refundable tax credit against New Jersey corporation business or gross income tax for qualified investments in an emerging technology business with a physical presence in New Jersey and that conducts research, manufacturing, or technology commercialization in the state.
Since the program’s inception in 2013, the EDA has approved 673 applications for investment, with more than $220 million being invested in 51 New Jersey technology and life sciences companies. The program is available to all eligible taxpayers, including out-of-state investors. In 2016, 39 percent of Angel Investor Tax Credit Program applicants were from New Jersey, with the remainder coming from throughout the United States and abroad. Foreign investors came from multiple European countries including Belgium, Sweden and the Netherlands.
“The influx of applications in recent months is a strong indicator that investors are realizing the incredible value in participating in our Angel Investor Tax Credit Program,” EDA Chief Executive Melissa Orsen said. “We have even heard from several investors who plan to take the funding they receive through the program and reinvest it in a New Jersey-based technology or life sciences company.”
The program marked a significant milestone in early January 2017, when a $500,000 investment made by investor Rikesh Godhani, of Denville, into pharmaceutical company Nevakar, became the 500th Angel Investor Tax Credit approved by both the EDA and the Division of Taxation. The Division of Taxation is diligently working on approvals for the remainder of the investments, which is the final step in the review process, following EDA’s approval.
Nevakar is a specialty pharmaceutical company focused on developing innovative products in the injectable and ophthalmic space. The company's goal is to develop enhanced products that address unmet clinical and/or commercial needs of molecules approved by the United States Food and Drug Administration, through intensive research and development and clinical efforts. The company, which was founded by scientist-turned-entrepreneur Navneet Puri, currently employs 30 people, all of whom are based in New Jersey. Nevakar is located at the New Jersey Center of Excellence in Bridgewater, the former Sanofi location that has been converted into a 110-acre research and development campus containing approximately 850,000 square-foot of laboratory, office, manufacturing, and warehouse space, as well as a conference center, fitness area and full-service cafeteria.
“As a young company, we find the Angel Investor Tax Credit Program to be a tremendous asset to incentivize investors,” Puri said.
Nevakar is Puri’s second entrepreneurial endeavor in New Jersey. In 2005, he created InnoPharma, Inc., a research and development pharmaceutical company focused on developing complex generic and innovative specialty products in injectable and ophthalmic dosage forms. He sold the company to Pfizer in 2014 and shortly thereafter launched Nevakar.
Godhani shared with @NJEDATech why he chose to invest in Nevakar.
“Based on my experience and success with other pharma investments, Nevakar looked to be a great opportunity,” he said. “This industry usually outperforms other sectors and offers a favorable return on investment. Nevakar has several innovative products and is comprised of a team of highly capable individuals.”
Recent legislative changes have been made to the Angel Investor Tax Credit Program. For any investments made on or after January 1, 2017, applications must be submitted within six months of date of investment. Investments made in 2016 will continue to have a 12-month deadline for submitting applications from date of investment. Additional changes to the program can be found at https://www.njeda.com/technology_lifesciences/angel_investor_tax_credit_program.
@NJEDATech asked Puri about Nevakar’s experience in New Jersey and its plans for the future:
Why did you choose to grow Nevakar in New Jersey?
Given that Nevakar is a specialty pharmaceutical company, its growth requires unique scientific and technical skill sets. New Jersey is home to an abundance of professionals possessing those skill sets, and therefore our decision to locate Nevakar here was easy and logical.
How did funding through the Angel Investor Tax Credit help your company?
Funding through New Jersey’s Angel Investor Tax Credit incentivized some of the investors to invest in Nevakar. Although their motivation is primarily the company, its business model, and the operating team, getting tax credits was certainly a bonus.
What’s on the horizon for Nevakar?
Nevakar has ambitious growth plans. Soon, Nevakar will continue to add to its highly-skilled workforce at its facilities in New Jersey while expanding on infrastructure to support execution of its specialty products pipeline. This will enable long-term growth of the company as a fully integrated specialty pharmaceutical company.