NCI SBIR and STTR: Advancing the Commercialization of New Cancer Innovations

1. NCI SBIR and STTR: Advancing the Commercialization of New Cancer Innovations North Carolina Biotechnology Center October 16, 2012 Deepa Narayanan Program Director, NCI SBIR Development Center http://sbir.cancer.gov

2. Today’s Presentation • SBIR/STTR Overview & Eligibility • Congressional Reauthorization & Policy Directives • Key Changes • Update on SBA Policy Directives for Implementing Changes • Funding Opportunities at NCI/NIH • Priority Areas & Focused Solicitations • NCI’s SBIR Program • NCI SBIR Development Center • Phase II Bridge Award • Investor Forum • Tips on Preparing a Successful SBIR Application 2

3. Congressionally Mandated Programs • Small Business Innovation Research (SBIR) Set-aside program for small business concerns to engage in Federal R&D with the potential for commercialization Federal agencies with an extramural R&D budget > $100M • Small Business Technology Transfer (STTR) Set-aside program to facilitate cooperative R&D between small business concerns and U.S. research institutions with the potential for commercialization Federal agencies with an extramural R&D budget > $1B Set-Aside (FY13) 2.7% 0.35% 3

4. SBIR/STTR Funding Levels ← The annual SBIR/STTR budget for each participating Institute or Center (IC) is proportional to the total annual budget appropriation for that IC 4 NIGMS NIDDK

5. Reasons to Seek SBIR/STTR Funding • One of the largest sources of early stage life sciences funding in the country. • A stable and predictable source of funding • Intellectual property rights are retained by the small business concern • Not a loan – no repayment is required • Funding is non-dilutive capital • Can be a leveraging tool to attract other funding • Projects undergo NIH’s rigorous scientific peer review

6. SBIR Eligibility • Applicant must be a Small Business Concern (SBC) • Organized for-profit U.S. business • 500 or fewer employees, including affiliates • PD/PI’s primary employment (i.e., >50%) must be with SBC at the time of award and for duration of the project period • ≥ 51% U.S.- owned by individuals and independently operated* • OR ≥ 51% owned and controlled by another (one) business concern that is ≥ 51% owned and controlled by one or more individuals* * Recent reauthorization includes some exceptions to this rule 6

7. STTR Eligibility • Applicant is a Small Business Concern • Formal Cooperative R&D Effort • Minimum 40% by small business concern • Minimum 30% by U.S. research institution • U.S. Research Institution: College or University; Non-profit research organization; Federally-Funded R&D Center (FFRDC) • Intellectual Property Agreement • Should provide the necessary IP rights (to the SBC) in order to carry out follow-on R&D and commercialization • Principal Investigator’sprimary employment may be with either the Small Business Concern or the research institution 7

8. SBIR & STTR: Three-Phase Program • Proof-of-Concept study • $150,000 over * • 6 months (SBIR) • or 1 year (STTR) • Commercialization stage • Use of non-SBIR/STTR funds Fast-Track Application Combined Phase I & II Phase I FEASIBILITY Phase II DEVELOPMENT Phase III COMMERCIALIZATION • Research & Development • Commercialization plan required • $1 million over 2 years* 8

9. SBIR/STTR Reauthorization:Key Changes 9

10. Congressional Reauthorization • SBIR/STTR programs were re-authorized through FY2017 by the 2012 Defense Authorization Act (P.L.112-81) • New law includes a range of important changes to the programs • US Small Business Administration (SBA) is responsible for providing policy guidance on how to implement changes • Increases SBIR set-aside (incrementally) from 2.5% to 3.2% by 2017. • Increases STTR set-aside from 0.30% to 0.45% by 2017 • Establishes hard caps on funding levels for Phase I & II awards • $225K for Phase I • $1,500K for Phase II 10

11. Venture Capital Participation NIH will be allowed to spend up to 25% of SBIR funds on small businesses majority owned by multiple VCs, hedge funds, or private equity firms. Previously not allowed. In effect after Size Rules are finalized, expected 1/1/13. Cross-Program Awards STTR Phase I awardees can receive SBIR Phase II awards, and vice versa Cross-Agency Awards Phase I awardee may receive a Phase II award from a different agency Direct to Phase II pilot Phase II SBIR awards may be awarded without requiring Phase I award. Not yet clear what NIH implementation will be. Changes to Eligibility …and other proposed eligibility changes

12. Focus on Commercialization Expanded Technical Assistance • Increased funding for technical assistance ($5000 per award) • This can be provided through NIH technical assistance programs, i.e. Niche Assessment Program (Phase I), or Commercialization Assistance Program (Phase II), or requested by the awardee • STTR awardees now eligible (previously not allowed) Commercialization Readiness Program • Allows NIH up to 10% of SBIR/STTR funds to support commercialization and Phase III efforts Company Commercialization Record • Applicants will be required to provide information on commercialization of prior SBIR/STTR awards …and other proposed commercialization initiatives

13. Improving the SBIR/STTR Programs • Streamlining the Award Process • Working to shorten timelines from application to award decision. NIH given 1 year from solicitation close date. • Administrative Funding Pilot • 3% of SBIR funds for agencies to provide support to improve: • Outreach • Commercialization • Streamlining & Simplifying the Award Process What can we do to make the program better for you? Comment on Policy Directives & tell your Program Officers

14. Implementation Timeline http://grants.nih.gov/grants/funding/sbir/reauthorization.htm

15. Sign up for NCI mailing list for updates at: http://sbir.cancer.gov Visit: http://sbir.gov For more info about NIH-specific implementation visit: http://grants.nih.gov/grants/funding/sbir/reauthorization.htm Speak with your program officer For More Information

16. SBIR/STTR Funding Opportunities 16

17. Multiple Funding Solicitations Know the Application Deadlines • SBIR & STTR Omnibus Solicitations for Grant Applications • Release: January • Receipt Dates: April 5, August 5, and December 5 • Solicitation of the NIH & CDC for SBIR Contract Proposals • Release: August • Receipt Date: Early November • See the NIH Guide for other Program Announcements (PA’s) and Requests for Application (RFA’s), i.e. grants Release: Weekly Receipt Dates:Various http://grants.nih.gov/grants/guide 17

18. http://sbir.nih.gov 18

19. http://sbir.cancer.gov 19

20. NCI Program Announcements Innovative Health IT for Broad Adoption by Healthcare Systems & Consumers (PA-12-196) Goal: Accelerate development & commercialization of evidence-based consumer health IT to (1) Prevent or reduce the risk of cancer (2) Facilitate patient-provider communication (3) Improve disease outcomes in consumer & clinical settings • Next receipt date December 5, 2012, April 5 2013, August 5 2013 Image Guided Cancer Interventions (PA-10-079 & PA-10-080, SBIR/STTR) Goal: Accelerate development & optimization of integrated image guided intervention systems for cancer imaging, monitoring, therapy. • Next receipt date December 5, 2012 Cancer Diagnostic &Therapeutic Agents Enabled by Nanotechnology (PAR-10-286) Goal: Accelerate the translation and commercialization of promising nanotechnology-derived cancer therapeutics and in vivo diagnostics from the advanced discovery phase to the end of preclinical characterization. • Next receipt date November 9 2012, March 8. 2013, July 8 2013

21. SBIR Contracts 21

22. SBIR Contracts vs. Grants 22

23. NCI SBIR Contracts Areas of interest to the commercial sector, based on market opportunity NCI scientific & technology priorities Contract topics in areas with strong potential for commercial success NCI SBIR contracts (thousands) % of total NCI SBIR 25% 17% 13% 8% 23

24. Contract Opportunities Now Available Proposals Due: November 13, 2012 • PHS-2013-1 “Solicitation of NIH and CDC for SBIR Contract Proposals” • Published August 15, 2012: • RFP can be found at: • http://grants.nih.gov/grants/funding/SBIRContract/PHS2013-1.pdf • More info about NCI’s topic areas: • http://sbir.cancer.gov/funding/contracts/

25. FY13 NCI SBIR Contract Topics Therapeutics & Diagnostics • 313 RNAi Cancer Therapeutics using Nanotechnology • 315 Development of Companion Diagnostics: Enabling Precision Medicine in Cancer Therapy • 316 Development of CTC Isolation Technologies Enabling Downstream Single Cell Molecular Analysis Advancing Cancer Research • 314 Development of Human Tissue Culture Systems that Mimic the Tumor Microenvironment • 319 Technology to Generate Anti-Peptide Capture Reagents for Affinity-Enriched Proteomic Studies • 320 High Quality Cancer-Related Standards for Metabolomics Research • 321 Chemically Defined Glycan Libraries for Reference Standards and Glycomics Research (Joint NCI-NIGMS Program) 25

26. FY13 NCI SBIR Contract Topics Imaging & Radiation Therapy • 323 Development of Radiation Modulators for Use During Radiotherapy • 324 Novel Imaging Agents to Expand the Clinical Toolkit for Cancer Diagnosis, Staging, and Treatment • 325 Innovative Radiation Sources for Advanced Radiotherapy Equipment Health IT • 322 Real-Time Integration of Sensor and Self-Report Data for Clinical and Research Applications NIH Technology Transfer • 317 Wound Healing Preparations Incorporating Nitric Oxide-Releasing Materials • 318 Test to Predict Effectiveness of Docetaxel Treatment for Prostate Cancer 26

27. Topic 323: Development of Radiation Modulators for Use During Radiotherapy* • Budget: Phase I $300,000; Phase II $1.5M • Number of Anticipated Awards: 3 - 5 • Goal: Development of radiosensitizers, radioprotectants, or radiomitigators that decrease normal tissue injury and/or enhance tumor killing. • Phase I Activities & Deliverables Include: • In vitro testing • Clonogenic survival studies • Preliminary in vivo toxicity studies • Phase II Activities & Deliverables Include: • In vivo experiments • PK/PD in rodent model • GMP drug production/sourcing • IND approval *Re-issue 27

28. Topic 314: Development of Human Tissue Culture Systems that Mimic the Tumor Microenvironment • Budget: Phase I $300,000; Phase II $2M • Number of Anticipated Awards: 3 - 5 • Goal: Development of 3D human tissue model culture systems that accurately mimic the tumor microenvironment…validated against known effective anti-cancer agents • Phase I Activities & Deliverables Include: • Develop 3D culture system prototype that incorporates human tumor cells using or easily adapted for use with high content screening platforms • Demonstrate accurate prediction of clinical efficacy in the developed prototype benchmarked against 2D and currently available 3D systems • Phase II Activities & Deliverables Include: • Benchmark performance against known in vivo effects • Demonstrate ability to scale-up system 28

29. Topic 317: Wound Healing Preparations Incorporating Nitric Oxide-Releasing Materials (NIH Technology Transfer) • Budget: Phase I $200,000; Phase II $1.5M • Number of Anticipated Awards: 1 • Fast-Track proposals not accepted • Goal: Develop a wound-healing dressing using NCI-developed NO-releasing material technology. • *Contractor will be granted royalty-free, non-exclusive license but is encouraged to submit an application for a commercialization license to NIH OTT • Phase I Activities & Deliverables Include: • Prototype development • Material characterization • Proof of concept in vitro studies • In vivo efficacy studies • Phase II Activities & Deliverables Include: • Stability studies • Capacity for commercial production & manufacture 29

30. Questions About Contracts? Ms. Bette Shanahan eshanahan@mail.nih.gov 301.435.3782 http://sbir.cancer.gov/funding/contracts/ 30

31. New Paradigm for Managing SBIR at NCI

32. Activities of Center Active outreach to bring in a new class of commercially viable applicants Coaching companies on developing stronger applications Active management of projects and better oversight Mentor and guide companies throughout the award period Matchmaking with investors

33. NCI SBIR Development Center Program Staff • Andrew J. Kurtz,PhD(Lead Program Director) • Previous • NIH – AAAS Science & Technology Policy Fellow • Cedra Corporation – Research Associate, Bio-Analytical Assays and Pharmacokinetics Analysis • Michael Weingarten,MA(Director) • Previous • NASA – Program Manager, NASA Technology Commercialization Program • Jian Lou, PhD(Program Director) • Previous • Johnson & Johnson – Research Scientist, Target Validation & Biomarker Development • Lumicyte, Inc. – Director, Molecular Biology Systems Analysis • Greg Evans,PhD(Lead Program Director) • Previous • NHLBI/NIH – Program Director, Translational and Multicenter Clinical Research in Hemoglobinopathies • NHGRI/NIH – Senior Staff Fellow • Todd Haim, PhD(Program Director) • Previous • National Academy of Sciences – Christine Mirzayan Science and Technology Policy Fellow • Pfizer Research Laboratories – Postdoctoral Fellow, Cardiac Pathogenesis & Metabolic Disorders • Patti Weber, DrPH(Program Director) • Previous • International Heart Institute of Montana –Tissue Engineering and Surgical Research • Ribi ImmunoChem Research, Inc. – Team Leader, Cardiovascular Pharmacology • Deepa Narayanan, MS(Program Director) • Previous • Naviscan PET Systems, Inc., Director, Clinical Data Management (Oncology Imaging & Clinical Trials) • Fox Chase Cancer Center, Scientific Associate (Molecular Imaging Lab) • Amir Rahbar, PhD, MBA (Program Director) • Previous • NCI–Program Manager, Center for Strategic Scientific Initiatives • BioInformatics, LLC – Senior Science Market Analyst • Naval Research Laboratory – Research Scientist • Ming Zhao, PhD (Program Director) • Previous • NCI–Program Director, Center to Reduce Cancer Health Disparities • GE Global Research – Senior Scientist • Pfizer – Scientist • Jennifer Shieh, PhD (AAAS Science & Technology Policy Fellow) • Previous • National Academy of Sciences – Christine Mirzayan Science and Technology Policy Fellow • Syapse, Inc. – Biology Associate 33

34. SBIR Phase IIB Bridge Award 34

35. FY13 Receipt Dates: November 6, 2012 & March 6, 2013 NCI SBIR Phase IIB Bridge Award Phase III COMMERCIALIZATION Phase I FEASIBILITY Phase II DEVELOPMENT • Incentivize partnerships with third-party investors & strategic partners earlier in the development process • Involves another peer-review cycle to evaluate progress & future plans • Up to $1M per year for up to 3 years to extend selected projects • Open to any NIH-funded Phase II awardees • Competitive preference and funding priority to applicants that can raise substantial third-party funds (i.e., ≥ 1:1 match) NCI SBIR Phase IIB Bridge Award CROSSING THE VALLEY OF DEATH

36. Program Funding Solicitation Eligibility • Current Phase II awards & and those that ended within the last 2 years • Cancer-related Phase II projects initially funded by other NIH institutes • Special Review to Evaluate Technical and Commercial Merits • Reviewers are academics, clinicians, industry professionals, venture capitalists • Emphasizes important commercialization considerations such as intellectual property (e.g., patents) and strategy for gaining FDA approval • Requires complete disclosure of applicant’s SBIR commercialization history • Third-Party Fundraising plan • Preferred Types of Funds: Cash, liquid assets, convertible debt • Sources of Funds: Another company, venture capital firm, individual “angel” investor, foundation, university, state or local government, or any combination 36

37. Partnership Benefits • Benefits to the NCI • Opportunity to leverage millions of dollars in external resources • Valuable input from third-party investors: • Rigorous commercialization due diligence prior to award • Commercialization guidance during the award • Additional financing beyond the Bridge Award project period • Benefits to third-party investors • Opportunity to partner with small businesses to develop & commercialize: • Technologies that have been vetted by NIH peer-review, AND • Projects for which substantial proof-of-concept data already exists • Opportunity to share in the early-stage investment risk with the NCI 37 37

38. “Valley of Death” • Applicants must provide a concise “Statement of Need” that includes answers to the following questions: • What is the perceived “Valley of Death” for the product/technology? • Why is additional government funding critically needed to accelerate the development of the product or technology toward commercialization? • What activities are being proposed that would not otherwise be possible through independent third-party investments OR would be significantly delayed without additional NIH support? • To what extent would a possible award advance the product or technology far enough to attract sufficient, independent third-party financing and/or strategic partnerships to carry out full commercialization? 38

39. 12 Bridge Awards (to date) 3 therapeutics 6 imaging technologies 3 molecular diagnostics http://projectreporter.nih.gov/reporter.cfm 39 39

40. 12 Bridge Awards (to date) Venture Capital: 1/3 Strategic Partners: 1/3 Individuals & Other: 1/3 40

41. NCI SBIR Investor Forum • Exclusive opportunity for some of the most promising NCI-funded companies to showcase their technologies • http://sbir.cancer.gov/investorforum/ • Opportunity to pitch and network with >150 investors and potential strategic partners • Features NCI’s top portfolio companies with innovative technologies • Exclusive one-on-one meetings • Previous Presenters • Zacharon Pharmaceuticals, Inc. • Omniox, Inc. • ImaginAb, Inc. • Fluxion Biosciences 41

42. What Does It Take to Get Funded?Tips on Applying

43. When is an SBIR/STTR application appropriate? • Innovative solution to significant clinical and/or research need (e.g. Rx, Dx, research tools) • Significant commercial potential • Collaboration with SBC: Need involvement of a commercial partner • Start-up: Too early for private investment • Established SBC: No resources to try new approach, but board supports SBIR • Leverages company/PI expertise

44. When NOT to apply • Need cash urgently • SBIRs take 8-16 months or more to get and you must start with Phase I (~$225K) • Incremental upgrade: no change to clinical paradigm • “Me too” product matching competitor’s capabilities • Basic Research - commercial and clinical value is not clear

45. Before You Write an Application • Consider your company’s strengths • Consider your company’s weaknesses • Contact NIH Program Director in advance (more than 1 week before due date!) to discuss your proposal concept and receive feedback • Review similar, currently funded NIH projects

46. Search Previous Awards RePORTER http://projectreporter.nih.gov

47. Key Application Tips • Start Early • Strong proposals take time to develop • Take care of the administrative registrations (SF424) • http://sbir.nih.gov > Electronic Submission • Take Time to Refine the Vision • Start informal discussions with potential customers, technical experts, investors, commercialization experts to clarify the product vision • Assemble the right team • Assemble a strong scientific team • Get outside partners to fill knowledge and expertise gaps (academic collaborators, consultants, other companies) • Know your Reviewers • Identify the most appropriate Institute/Center • Identify the most appropriate study section BEFORE you submit your application • Review your Application before you Submit

48. Know NIH Review Criteria • Does the product address an important problem, and have commercial potential? Is there a market pull for the proposed product? Significance • Are design and methods well-developed and appropriate? Are problem areas addressed? Approach • How novel is the product and the approaches proposed to test its feasibility? Innovation • Is the investigator appropriately trained and capable of managing the project? Investigator • Does the scientific environment contribute to the probability of success? Is the environment unique? Environment • Is the company’s business strategy one that has a high potential for success? Commercialization 48

49. Other Tips for a Strong Application • Significant, innovative, and focused science • Make the SBIR/STTR application product-focused, as distinct from an R01 • Generate preliminary data, if possible • Include letters of support from KOLs, end-users, possible investors. • Explain the key issues and controversies in the product space; describe the competition and your value proposition • Identify any unanswered questions, and then contact NCI SBIR program staff for help • Write clearly • Prepare your application early! 49

50. If you aren’t funded … • Use peer review to improve your technology and presentation • Reviewers often spot errors in the proposal • Reviewers will let you know if what you are proposing has been done before • If peer reviewers “didn’t get your proposal” • Customers, investors, and employees may not get it either • Fix errors, improve your presentation • It’s always painful not to be funded, but at least you get the feedback • Explore opportunities to serve on NIH peer review panels