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.
Over the last two years the NIH has implemented new guidelines and procedures to “enhance peer review”. For instance, reviewer comments and scores for each of 5 criteria are indicated on the summary sheet. The research proposal section has also been restructured, to more closely match the criteria by which the reviewers critique a proposal.
For those submitting SBIR/STTR applications to the NIH, April 5th is the first time the restructured proposal will be in effect. This is daunting for both first time and returning SBIR/STTR applicants.
The NIH has been inundated with questions and comments concerning these new processes. In an effort to address these questions they are holding a webinar (through GoToMeeting). This will be an opportunity for NIH staff to discuss the restructuring of the Research Plan, new page limits, new scoring, and other changes resulting from Enhancing Peer Review and to provide a forum for you to ask questions.
When: March 15, 2010 – 2:00 to 4:00 PM EST
REGISTRATION: https://www2.gotomeeting.com/register/735602218
(Note: the session is free, but you must register to participate)
For those Phase I SBIR awardees developing therapeutics targeted toward neurological disorders, and planning on submitting for a Phase II SBIR award to fund pre-clinical trials, check out the NINDS Cooperative Program in Translational Research (U44). This special funding opportunity is directed at translating basic science research into new drug candidates for neurological disorders. These awards are not intended for early stage discoveries such as high throughput screening, but will fund later stage projects. Even those sufficiently advanced that an IND or IDE application would be filed at the end of the project period.
These awards are larger than traditional Phase II awards, with allowable budgets up to $1M per year and a 3 year max. Phase I applications are not allowed, however, a FastTrack application may be submitted as long as the Phase I portion is in preparation for a Phase II to fund pre-clinical trials. If you have already received a Phase II, this mechanism can also be used to fund a competing renewal application with the same allowable budget as above.
Cooperative Agreements are an NIH funding mechanism that allows NIH programming staff to be more involved with the evolution and progress of a project. Specifically, go/no-go assessments can be made and funding halted if sufficient progress is not made. This is attractive to the NIH as it allows them to be more closely involved with large grant awards and use their funding more wisely.
For more information contact the NINDS SBIR/STTR Program Director, Dr. Randall Stewart, to discuss your project and it’s applicability to this program. Regular receipt dates (Apr 5, Aug 5, Dec 5) apply, and program staff should be contacted 10 weeks prior to submission.
Earlier this month the NIH released several announcements associated with the Recovery Act. Of note to the SBIR community is NOT-OD-10-034.
The announcement will fund Competitive Revisions to accelerate innovation of previously funded “parent” SBIR/STTR awards in the area of basic behavioral and social science research (b-BSSR). The proposed work must significantly expand the scope or research objectives proposed in the previously funded award. Basic behavioral and social science research includes research on behavioral and social processes, interactions between biology, behavior and social processes, and/or methodology and measurement.
To qualify, the small business must have an active award, at the time of application, and propose a revision to be accomplished in one year. The work proposed in the revision must not extend beyond that of the parent award. If a no-cost extension is needed to cover the work being proposed in the revision, it must be in place prior to submission.
Up to $150,000 in direct costs may be requested with a maximum of $75,000 of those costs allocated to equipment or technology acquisition.
Letters of Intent are due February 25, 2010
Application is due March 25, 2010
The Department of Health and Human Services (DHHS) released its 2010 SBIR/STTR grants omnibus solicitations (PA-10-050 and PA-10-051). Those interested in funding from the NIH, CDC, FDA, & CFA should investigate submitting applications. General information and resources for submitting proposal applications can be found on the DHHS SBIR/STTR page.
Submission dates for 2010:
- Standard Receipt Dates: April 5, Aug 5, Dec 5
- AIDs and AIDS-Related Receipt Dates: May 7, September 7, January 7, 2010
As always, do NOT wait until the last minute and attempt to submit. NIH recommends companies begin the registration process AT LEAST 6 weeks before the deadline.
***NOTE*** Changes have been made to the submission of grant applications; these changes will be in effect for the above submission dates. If you have previously submitted applications and think you know the process, please play close attention to the modifications. Refer to Julie Collins’ January 6th article for more details.
In an effort to to provide more timely and transparent peer review, the NIH has been implementing many changes to both the review process as well the proposal structure. Previously, a new scoring system was put in place. The 5 point system was replaced by a 9 point system, and reviewers are now required to provide a numerical score for each of 5 categories. These scores are presented to the applicant on the review statement, along with comments, providing a more transparent view of the review process.
The latest change is a restructured research proposal with shorter page limits. The proposal structure will now be more aligned with the review criteria, and the shortened page limit will, ideally, allow the reviewers more time with each proposal. The changes are as follows:
- Specific Aims section is now limited to 1 page only.
- Three sections of the Research Plan (Background & Significance, Preliminary Studies, and Research Design & Methods) are now combined into 1 section, Research Strategy, with 3 sub-sections, Significance, Innovation and Approach. Preliminary Studies and Progress Reports must be discussed under Approach.
This section is limited to 6 pages for Phase I and 12 pages for Phase II.
- The Commercialization Plan has been limited to 12 pages.
In addition, the Facilities section must now explain how the scientific environment will contribute to the probability of success for the proposed project. Lastly, a Personal Statement has been added to Biographical Sketch section.
Changes are effective for ALL proposals submitted after January 25, 2010
Practically, how does this effect your application and chances for success? If you are clear as to the commercial aspect of your technology, and can articulate that, as you would to any investor, it will actually make your work much simpler. If however, you are are still determining how to apply your science to the commercial market, you are in for a challenge. No longer can you use the Background section to talk about the scientific basis of your discovery. You must spend the majority of the proposal discussing it’s Significance and Innovation as it applies to the marketplace.
Changes to the Facilities section are in an attempt to ensure that applicants actually have appropriate commercial space in which to perform the work. These grants are not to fund academic endeavors.
For new applicants, such as post-docs or former graduate students, that want to experiment in the world of start-ups, the Personal Statement section provides as specific section is which to address their strengths such as inventor status.
As always, if you would like to discuss these changes, or your application, feel free to contact our office.
The NIH in conjunction with the CDC has released their annual contract solicitation. Unlike most NIH SBIR/STTR announcements, the contract solicitation requests applications on specific topics and will not accept investigator initiated research projects. Participants in this solicitation include seven Institutes/Centers from the NIH and five Centers from the CDC. Topics are specific but include research areas such as Imaging of Cancer Stem Cells to Computer Assisted Sperm Analysis. (Did I get your attention? And no, I’m not kidding.)
Budgets vary by topic and range from $100,000 to $250,000 for a Phase I and $750,000 to $2M for a Phase II. Do not ask for one penny over the budget cap! FastTrack applications will be accepted.
Applications, unfortunately, are paper based and due on the desk of the NIH at 5:00PM, November 9, 2009.
For more information go here or contact us to discuss your application.
Did you know that if you are submitting an SBIR or STTR to the NIH in response to a PA (program announcement) that you can request your grant be reviewed by a specific study section? In fact it's encouraged.
NIH SBIR and STTR grants are reviewed by Special Emphasis panels coordinated by the Center for Scientific Review. To take a look at the current SBIR Special Emphasis panels go
here. Use the cover letter component to request the most appropriate study section and one or more appropriate funding Institutes or Centers.
This reduces the burden on NIH staff and affords you the best chance at determining your own fate.
The NIH has announced it has once again contracted with Foresight Science and Technology to provide 50 SBIR Phase I awardees with Technology Niche Analyses (TNA™). Only FY09 or FY10 SBIR awardees are eligible to apply. Each company is only eligible for one assessment even if you have received multiple awards. The earliest start date for Group A is July 27th.
Each TNA™ will examine the commercial potential and market for the product/service being developed using NIH SBIR funds. This report can be beneficial in identifying partners, investors or customers.
In an effort to make the peer review process more transparent the NIH has been phasing in new guidelines for grant review. Of interest to the SBIR/STTR applicant the scale on which an application is scored has been changed.
Instead of being scored 1 to 5 (exceptional to poor) and the average multiplied by 100, SBIR/STTR grants are now scored 1 to 9 (exceptional to poor) with the average multiplied by 10. In addition, applications that were not discussed in study section will now receive their initial criterion score as part of their summary statement. This may give you some insight into why your application was not discussed.
But what do these new scores mean? How can you know whether your application is likely to be funded? Previously a score of 180 or below meant you had a pretty good chance of being funded. If you extrapolate that to a 90 point system would a score of 32 or below translate into an awarded grant?
Only time will tell.