The process of reauthorizing the SBIR/STTR Program has been, like many other government programs, a long journey. It appears that the House has agreed to the Senate’s modifications for SBIR/STTR reauthorization as part of the National Defense Authorization Act for 2012 NDAA. As reported by Rick Shindell of the SBIR Gateway almost 1000 small businesses contacted their Representatives and urged them to agree to the Senate modifications for SBIR/STTR. As the final bill has not yet been authorized we do not have all the details. Here is what is known:
- Reauthorization through 2017.
- Increased Set Aside: SBIR from 2.5% to 3.2%, STTR from 0.3% to 0.45%.
- VC Majority Ownership: Allowable for 25% of awards from NIH, DoE and NSF, 15% of awards from all other agencies.
- Limit on Number of Awards Per Company: Rejected, but language included to monitor a company’s success.
- Agency Administrative Fund: 3% of SBIR funds can be used by the agencies for outreach and administration.
- Phase I Skip: Allowable for NIH, DoD and DoEd, at the agencies discretion.
The National Cancer Institute has announced the release of the 2012 SBIR Phase II Bridge Award program. The award helps bridge the funding gap, known as the “Valley of Death,” that currently exists between the end of the SBIR Phase II award and the next round of financing needed to advance a promising cancer therapy or imaging technology toward commercialization. The program is specifically intended to foster relationships between small business applicants and third-party investors and strategic partners who can help finance their development efforts.
The NCI intends to commit $10 million in fiscal year 2012, covering as many as 10 grants of up to $1 million annually for as long as three years. Development efforts may include preclinical R&D needed for regulatory filings or clinical trials in three project areas:
(1) cancer therapeutics
(2) cancer imaging technologies, interventional devices and in vivo diagnostics
(3) in vitro and ex vivo cancer diagnostics and prognostics
There are two deadlines to submit an SBIR Phase application: December 28, 2011 & March 27, 2012. For more information, visit the National Cancer Institute website.
Applications for the NIH Contract solicitation are due at 5 p.m. Eastern time on Monday, Nov. 7. The NIH Contract solicitation is released only once yearly, and contains a list of topics pertinent to each agencies mission. Unlike the grant solicitation, contracts are for specific work on a topic that has been pre-defined. Topics available in this year’s solicitation range from Wireless Telemetry for MRI to Rapid Point-of-Care tests for Fungal Diagnosis. Topics are highly specific and only proposals matching the published topics will be accepted; no investigator-initiated applications will be allowed. Budgets are also strictly enforced, and are limited to $150,000 for a Phase I and $1M for a Phase II. And, unlike other applications to the NIH, this solicitation must be submitted in paper form and received, as verified by time stamp, at the agency by the deadline above. Detailed information, including program contacts, detailed topic descriptions, and instructions for preparing proposals, are available in the solicitation.
Participating agencies, with the approximate number of contracts each expects to award:
NIH: National Cancer Institute (37); National Center for Research Resources (1-2); National Heart, Lung & Blood Institute (18 – 29); National Institute on Alcohol Abuse & Alcoholism 2-4); National Institute of Diabetes & Digestive & Kidney Diseases (1); National Institute on Drug Abuse (15 – 21).
Centers for Disease Control: Center for Global Health (2); National Center for Birth Defects and Developmental Disabilities (1); National Center for Emerging Zoonotic & Infectious Diseases (2); National Center for HIV/AIDS, Viral Hepatitis, SDT, & TB Prevention (3) ; Office of Public Health Preparedness & Response (1).
Proposals will be reviewed between February and June 2012, with award dates between July and September 2012, depending on the awarding unit (see the solicitation for details).
On March 4th the NSF has released their second FY-2011 SBIR solicitation. Topics included in this solicitation are:
Phase I awards of up to $150,000 for 6 months are allowed and it is anticipated that 150 awards will be made. (Pending available funds)
The NSF is a leader in funding cutting edge R&D with real potential for commercialization. In other words, you need to be developing a product for an identified market, not simply investigating a new idea. Part of the NSF research proposal is a commercialization plan. In this section of the application they want you to describe the competition and market landscape, and even estimate your anticipated market share. Letters of Support from commercialization partners are encouraged and will strengthen your application.
The NIH has released a Special Announcement SBIR Solicitation targeting the development of medical technologies to reduce health disparities. This topic was originally released in 2009, and reissued in 2010. Phase I grants for up to $200,000 per year for up to two years are allowed. This is an increase from the standard $150,000 per 6 to 12 months.
This solicitation is designed to fund companies developing medical technologies that are both easily accessible, as well as affordable. Products such as non-invasive diagnostics, in-home monitoring or telehealth technologies would be appropriate. You can read the entire announcement here. Please note that a letter of intent is required by April 20th and the first receipt date is May 20th.
The Therapeutic Discovery Project Credit has been the talk of the bioscience community since the legislative text was released on May 21st. The program will infuse the industry with both tax credits and cash grants for qualified investments in therapeutic R&D. The hope is to stimulate continued growth and progress for therapeutic discovery, including diagnostics and delivery vehicles.
Over the past month there has been much debate over the potential rules and regulations. One such topic of discussion revolved around the inclusion of Federal Grants, such as SBIR/STTRs, as a qualified investment. How can you claim a Federal Grant as a qualified investment? To many that seems as double dipping. According to the IRS, not if you claim that Federal Grant as gross income.
The IRS form, NIH form and final instructions, including FAQ’s from the IRS, were released on June 18th. This question is specifically answered by the IRS.
Q. Can a company apply for the new credit or grant for a project for which the company is already receiving other grant money (e.g., an SBIR award), or does the project have to be completely self-funded to qualify?
A. A taxpayer must reduce the amount of a project’s qualified investment for any grant that is not included in gross income, unless the grant can only be used for costs not included in the definition of a qualified investment. See Notice 2010-45 § 4.01(4).
This could significantly increase the amount of award to many small companies that are funded both privately and through SBIR/STTR grant awards.
SoloHealth, a technology company that develops and deploys interactive health screening kiosks, today announced that the company has been awarded a $1.2 million grant by the National Institute of Health (NIH) through its Small Business Innovation Research (SBIR) program to advance SoloHealth’s initial product, EyeSite®, a vision screening kiosk, into a more comprehensive self-service health and wellness station. The new product will address highly problematic areas such as hypertension, obesity, eye health and vision, nutrition and diabetes. This FastTrack SBIR grant, which is funded by the NCMHD, will aid SoloHealth in bringing free medical screening technology, education and wellness programs to a wider audience, including traditionally underserved communities.
SBIR grants and contracts are a non-dilutive form of R&D funding provided by 11 agencies of the Federal government. The application process is highly competitive and requires a qualified scientific team, innovative approach, and a rigorous R&D plan. While not a strict R&D firm, SoloHealth worked with SBIR GA, a service of ATDC, to construct a compelling proposal and bring together a highly qualified team. The result of these efforts is non-dilutive funding to develop their next generation product.
Together with Georgia Bio, ATDC will be hosting a workshop, tomorrow 5/11, to discuss the “nuts-and-bolts” of the Therapeutic Discovery Project Credit. Lined up to join our panel session are Russ Medford of Salutria Pharmaceuticals, Russ Plum of Inhibitex, Katherine Breaks of KPMG, Bill Kitchens of Arnall, Golden and Gregory, Robert Craig an Executive Consultant, and Jeff Trent of Paradigm Partners.
These panel members will bring a wealth of experience on the topic. Several panelists have had direct working experience with the similar 48 sec C Advanced Energy Credit and will be able to provide specifics on how the program may unfold. Russ Medford, CEO of Salutria Pharmaceuticals, was integral in working with BIO to lobby directly for the legislation, and Russ Plum, CEO of Inhibitex, has been interviewing consultants to assist Inhibitex is applying for the Project Credit.
This two hour working session will consist mostly of Question and Answer. So join us tomorrow on the 3rd floor of 75 5th Street, NW, and be ready to ask our panelists your specific questions.
To register:
http://www.gabio.org/event_details.aspx?id=204
While ATDC works with lots of bioscience entrepreneurs, we can’t do it all! We are very pleased to welcome the new Georgia Bioscience Commercialization Center (GBCC) that will help connect bioscience entrepreneurs with experienced executives, including ATDC’s Harold Shlevin, former CEO of Solvay and two time bioscience entrepreneur. In addition, the GBCC’s web site will provide “how-to” information and links to important resources. The primary contacts for the GBCC, Laurence Downey and Robert Dericotte, describe the GBCC as “a one-stop shop for life science entrepreneurs in Georgia”. Be sure to give this free service to entrepreneurs a try…or two.
When the Health Care Reform Bill (H.R. 3590) was passed on March 23, 2010 it included a Tax Credit or Cash Grant for qualifying small businesses developing therapeutics, molecular diagnostics or delivery vehicles. This tax credit will reimburse eligible companies for 50% of all expenditures spent on a Qualifying Therapeutic Discovery Project during calendar year 2009 and 2010 or fiscal year 2010 or 2011.
The most compelling part of this legislation is the ability to exchange the tax credit for a cash grant. Many small biotech and pharma companies do not have a tax liability and would not benefit from a tax credit. The cash grant option will allow more companies to receive an immediate return.
For example, a $1 million qualified investment will lead to either a $500,00 tax credit or $500,000 check.
The program solicitation will be released by the Department of Treasury, IRS on or before May 21st, 2010. Applications will be be due within 30 days and funds disseminated beginning mid-June.
While the mechanics of the program will be described by the IRS, qualified projects will selected by the Department of Health and Human Services. All eligible companies should receive some assistance, but it is currently not clear how the proposals will be judged and selected, and whether there will be a maximum allocation per project and/or per company.
What we do know:
A Qualifying Therapeutic Discovery Project (Sec 9023 or H.R.3590) includes:
- Therapeutics designed to treat or prevent diseases or conditions (investments made in R&D to further a 505(b) or 351(a) application to the FDA).
- Molecular diagnostic products to be used in direct diagnosis, or in determining molecular factors related to the disease.
- Therapeutic delivery or administration vehicles.
Specifically excluded from this legislation are projects for the development of medical devices. However, we will not know until May 21st whether a medical device used in the delivery or administration of a therapeutic would be considered a qualifying project.
In addition to the above qualifying criteria, selected projects will also result in new therapies, reduce long-term healthcare costs or advance the cure for cancer AND have the greatest potential to result in high-paying job creation and retention, and advance the competitiveness of the U.S. in the fields of life, biological, and medical sciences.
The legislation was modeled after a similar program distributed by the Advanced Energy Manufacturing Credit distributed by the Department of Energy. We anticipate that a similar process will be followed which could include:
- A 1 page preliminary application due within 30 days of the solicitation release.
- A final application due within 60 days of solicitation including an executive summary, scientific eligibility criteria, selection criteria including job creation/retention and U.S. competitiveness, as well as a spreadsheet detailing costs incurred.
If you are attending the 2010 BIO International Convention, a session held on May 5th from 2:00 to 3:30 will provide additional information.