Jo Anne Goodnight SBIR/STTR Program Coordinator Office of Extramural Research, NIH

1. Jo Anne Goodnight SBIR/STTR Program Coordinator Office of Extramural Research, NIH 301.435.2688 jg128w@nih.gov “Lab to Life”NIH SBIR/STTR Funding Opportu“NIH”tieS National Institutes of Health Presentation to the Monte Jade Science & Technology Association October 22, 2008

2. Topics to Discuss Today • SBIR/STTR Program Overview • NIH SBIR/STTR Program Specifics • Transitioning NIH SBIR/STTR Innovations to the Marketplace • Answer Your Questions!

3. COMMON SOURCES CAPITAL TO JUMP-START YOUR START-UP Personal savings Credit cards Selling assets (boats & other toys) Second mortgages Loans & investments from family, friends and ….. Suppliers, vendors, other businesses Commercial bank loans Private investors, Angels Government Grants Venture Capital

4. The largest, most accessible source of SEED CAPITALfor the nation’s innovative small businesses$2.3 Billion in 2008 SBIR/STTR PROGRAMS

5. …and This capital is in the form of grantsandcontracts no repayment no debt service no equity forfeiture no IP forfeiture

6. SBIR/STTR Program Overview SMALL BUSINESS INNOVATION RESEARCH (SBIR) PROGRAM Set-aside program for small business concerns to engage in Federal R&D -- with potential for commercialization. SMALL BUSINESS TECHNOLOGY TRANSFER (STTR) PROGRAM Set-aside program to facilitate cooperative R&D between small businesses and research institutions -- with potential for commercialization. 2.5% 0.3% The best way to predict the future… is to create it.

7. SBIR Purpose and Goals “We in government must work in partnership with small businesses to ensure that technologies and processes are readily transferred to commercial applications.” – Ronald Reagan, July 22, 1982. • Stimulate technological innovation • Use small business to meet Federal R&D needs • Foster and encourage participation by minorities and disadvantaged persons in technological innovation • Increase private-sector commercialization innovations derived from Federal R&D Small Business Innovation Development Act of 1982 P.L. 106-554 (Signed 12/21/2000 extends program through 09/30/2008) SBIR/STTR Program Overview

8. STTR Purpose and Goals • Stimulate and foster scientific and technological innovation through cooperative research and development carried out betweensmall business concerns and research institutions • Foster technology transfer between small business concerns and research institutions Small Business Research and Development Enhancement Act of 1992 P.L. 107-50 (Program reauthorized through 09/30/2009) SBIR/STTR Program Overview

9. PHASE I • Feasibility Study • $100K and 6- month (SBIR) or 12- month (STTR) Award • PHASE II • Full Research/R&D • $750K and 2-year Award (SBIR & STTR) • Pre-requisite: Phase I award • PHASE III • Commercialization Stage • Must use non-SBIR/STTR Funds SBIR/STTR: 3-Phase Program SBIR/STTR Program Overview

10. SBIR/STTR ELIGIBILITY CRITERIA • U.S. small business organized for-profit • At least 51% U.S.- owned by individuals and independently operated or At least 51% owned and controlledby another (one)business concern that is at least 51% owned and controlled by one or more individuals • 500 or fewer employees, including affiliates • PI primarily employed with the small business • STTR: Formal collaboration between small business and research institution SBIR/STTR Program Overview

11. Topics to Discuss Today • SBIR/STTR Program Overview • NIH SBIR/STTR Program Specifics • Transitioning NIH SBIR/STTR Innovations to the Marketplace

12. Bridging the Discovery to Development Gap SBIR/STTR Programs Are Fully Integrated Within NIH Research Agenda • Improve human health through prevention, detection, diagnosis and treatment of disease or disability • Speed process of discovery • Reduce cost of medical care • Improve research tools/ reduce • cost of research • Increase health knowledge base

13. Growth of the SBIR/STTR Budget Over 25 Years Set-aside % .2 .6 1.0 1.25 1.5 2.0 2.5 SBIR .05 .1 .15 0.3 STTR N/A NIH SBIR/STTR Program Specifics

14. Organizational Structure of NIH Office of the Director http://www.nih.gov/icd National Institute on Aging National Institute on Alcohol Abuse and Alcoholism National Institute of Allergy and Infectious Diseases National Institute of Arthritis and Musculoskeletal and Skin Diseases National Cancer Institute National Institute of Child Health and Human Development National Institute of Dental and Craniofacial Research National Institute on Deafness and Other Communication Disorders National Institute of Diabetes and Digestive and Kidney Diseases National Institute on Drug Abuse National Institute of Environmental Health Sciences National Eye Institute National Institute of General Medical Sciences National Heart, Lung, and Blood Institute National Human Genome Research Institute National Institute of Mental Health National Institute of Neurological Disorders and Stroke National Institute of Nursing Research National Center on Minority Health and Health Disparities National Institute of Biomedical Imaging and Bioengineering National Center for Complementary and Alternative Medicine Fogarty International Center National Center for Research Resources National Library of Medicine No funding authority

15. NIH INSTITUTE/CENTER SBIR/STTR BUDGET ALLOCATIONS (FY2008) FY 2008 SBIR/STTR Budget Allocations to NIH ICs: $580 M (SBIR) $ 70 M (STTR) Total: $650 M Extramural R&D Set-Asides: SBIR = 2.5% STTR = 0.3% NIGMS NIDDK

16. NIH SBIR Funding in FY2007 – Top 10Awards and Dollars State Awards Amount Awarded NIH SBIR/STTR Program Specifics

17. Number Of NIH Competing SBIR ApplicationsFY 1995 - 2007 -12% -15% -21% Phase 1 = All R43 and U43; Phase 2 = Other competing R44 and U44 NIH SBIR/STTR Program Specifics

18. Success Rates of Competing SBIR Applications NIH SBIR/STTR Program Specifics

19. PHASE I (Feasibility Study) • Average award: $170K • Project Period: Varies. Most awards on a 1-yr NCE • PHASE II (Full Research/R&D) • Average $850K and 2-years; can be longer • PHASE II+ (Competing Renewal/R&D) • Clinical R&D; Complex Instrumentation/Tools • Many, but not all, ICs participate • $1M/year; 3 years • PHASE III (Commercialization Stage) • NIH, generally, not the “customer” • Consider exit strategy early NIH SBIR/STTR: 3-Phase Program

20. Solicitations and Due Dates http://grants.nih.gov/grants/funding/sbir.htm • NIH, CDC & FDA SBIR/STTR Grant Solicitation • “Parent FOAs” • Release: January • Standard Due Dates: April 5, Aug 5, Dec 5 • (AIDS/AIDS-related: May 7, Sept 7, Jan 7) • SBIR Contract Solicitation (NIH, CDC) Release: August November receipt date • NIH Guide for Grants and Contracts • Release: Weekly Receipt dates specified in each FOA • http://grants.nih.gov/grants/guide/index.html SBIR:PA-08-050STTR:PA-08-051 NIH SBIR/STTR Program Specifics

21. http://grants.nih.gov/grants/funding/sbir.htm NIH SBIR/STTR Program Specifics

22. NIH SBIR/STTR Solicitation Research Topics Our Ideas* Biodefense Biosensors Nanotechnologies Bioinformatics Diagnostic and Therapeutic Devices Telehealth *Examples from 200+ pages of topics! Biosilicon devices Biocompatible materials Acousto-optics /opto-electronics Imaging devices Genetically engineered proteins Proteomics / Genomics Parent Solicitations SBIR:PA-08-050andSTTR: PA-08-051 NIH SBIR/STTR Program Specifics

23. NIH SBIR/STTR Research Topics Investigator-initiated Ideas (a.k.a. “I can’t find a topic match”) • Research projects related to NIH mission • “Other” areas of research within mission of an awarding component Keyword search the Solicitation Ctrl - F NIH SBIR/STTR Program Specifics

24. NIH Center for Scientific Review Assign to IC and IRG Small Business Concern Applicant Initiates Research Idea Scientific Review Groups Evaluate Scientific Merit Advisory Council or Board Recommend approval IC Allocates Funds NIH Review Process Submits SBIR/STTR Grant Application to NIH Electronically ~2-3 months after submission ~2-3 months after review IC Staff Prepare funding Plan for IC Director Grantee Conducts Research NIH SBIR/STTR Program Specifics

25. Exceptionally high burn rate for investment funds • Unusually long development times (5-12 yrs) • High & intense capital needs (>$1B) • Multiple rounds of financing required Challenges for Biotech Firms: Navigating the Peaks and Valleys Phase I Phase II Phase III Transitioning NIH SBIR/STTR Innovations to the Marketplace

26. NIH Technical Assistance Program: Understanding the “B” in SBIR • A “menu” of technical assistance / training programs in: • Strategic/business planning • FDA requirements • Technology valuation • Manufacturing issues • Patent and licensing issues • Getting closer to the customer, the market, and the competition. • Systematic approach to developing business strategies. • Individualized assistance/mentoring/consulting. • Menu: • Commercialization Assistance Program • Technology Niche Analysis Program • Manufacturing Assistance Program Transitioning NIH SBIR/STTR Innovations to the Marketplace

27. Technical Assistance Programs Niche Assessment Identify other uses of technology Determines competitive advantages Develops market entry strategy (Phase I awardees) Commercialization Assistance Business & strategic planning Help help build strategic alliances and investor partnerships (Phase II awardees) Partnership with NIST MEP Centers Help make better manufacturing and operational decisions Manufacturing Assistance (Phase II awardees) Transitioning NIH SBIR/STTR Innovations to the Marketplace

28. To (the) Market We Go NIH Pipeline to Partnerships (P2P) Technology Showcase Potential partners search for technologies of interest Facilitates matchmaking between NIH SBIR/STTR awardees and potential strategic partners and investors (Ph I and Ph II awardees) Transitioning NIH SBIR/STTR Innovations to the Marketplace

29. NIH Pipeline to Partnerships (P2P) http://www.ott.nih.gov/p2p/index.asp

30. Pipeline to Partnerships (P2P) Potential partner identifies technology of interest and contacts company's Web site. Transitioning NIH SBIR/STTR Innovations to the Marketplace

31. Pipeline to Partnerships (P2P) http://www.ott.nih.gov/p2p/index.asp Transitioning NIH SBIR/STTR Innovations to the Marketplace

32. Phase III Commercialization An evaluation of NIH Ph II SBIR awardees (FY1992-2001) and regular updates document the continued achievements of SBIR awardees over time. A recent second evaluation of NIH Ph II SBIR awardees (FY2002-2006) show $395M for another 189 awardees. • Number of awardees with FDA-approved projects increased 51%, from 59 in 2002 to 89 in March 2007. • Estimated cumulative sales to date increased over 200%, from $821 million to $1.95 billion in March 2007. • Number of awardees receiving additional non-SBIR funding or capital increased 33%, from 281 in 2002 to 375 in March 2007.

33. Top 10 Reasons

34. Top 10 Reasons 10. Over $2.3 Billionavailable- annually 9.NOT A LOAN - no repayment 8. Provides recognition, verification and visibility 7.Potentialleveraging tool to attract venture capital/other sources of $$$

35. Top 10 Reasons 6. Foster partnerships (universities, large corporations)that enhance competitivenessof small businesses in marketplace 5. Creates jobs /stimulates local and state economies–stronger National Economy 4. Provides seed money to fund high risk projects

36. Top 10 Reasons 3.Intellectual property rights are normally retained by thesmall business 2. Small business concerns are recognized as a unique national resource of technological innovation – creating AND sustaining

37. Intralase Corporation Femtosecond Laser Intralase Corporation PediSedateTM Design Continuum, Inc. Next Generation TherapeuticsTM GlycoFi, Inc. BrainGateTM System Cyberkinetics Neurotechnology Systems, Inc. Percutaneous Ventricular Assist DeviceTM Cardiac Assist, Inc. Top 10 Reasons 1. Opportunity to make important contributions to the health ofAmerica

38. Summary Summary

39. Summary:Importance of NIH SBIR/STTR Funding • Funds early-stage, high-risk projects for which private and public funds are not traditionally available • Establish feasibility of ideas with commercial potential • Verify technology and leverage SBIR funds to attract other funding • Plays an important role is achieving NIH mission of improving human health • Develop tangible products and services resulting from innovative R&D approaches to improving health • Focuses on commercialization of the outcomes of research – a unique feature. • SBIR program supplements -- but does not supplant or diminish -- the traditional research programs of NIH. Summary

40. NIH SBIR/STTR Program Key Features • SBIR and STTR Program • Single SBIR/STTR grant solicitation • Investigator-initiated research ideas • Supplemental Funding Opportunities (NIH Guide for Grants and Contracts) • Electronic Submission • Awards: Grants, Contracts, Cooperative Agreements • External Peer Review • Option to request review group • Experts from Academia/Industry • 5 Criteria: Significance, Approach, PI(s), Innovation, Environment • Summary Statement for all applicants • One resubmission (eff. Jan 2009) • Gap Funding Programs • No-Cost Extensions (NCE) • Ph I/Ph II Fast Track • Administrative Supplements • Multiple Receipt Dates (Grants) • April 5, August 5, December 5 • May 7, September 7, January 7 (AIDS) • Contracts: Early November • Budget and Project Period • $100K/6 months (Ph I) • $750K/2 yrs (Ph II) • Deviations permitted where scientifically appropriate. • Technical Assistance Programs • Technology Niche Assessment • Commercialization Assistance • Pipeline to Partnerships (P2P) Summary

41. NIH SBIR/STTR Program Enhancements • Project Director/Principal Investigator (PD/PI) • Multiple PD/PI allowed • Waivers for 51% employment requirement • SBIR-STTR Conversions (vice-versa) • Phase I stage allowed • Phase II Competing Renewal • Up to $1M/year for 3 years • Additional R&D to meet FDA regulatory requirements OR • Complex instrumentation/clinical research tools/behavior interventions • Performance of Work • Waivers for work outside U.S. • Deviations from SBIR subcontract percentages (not for STTR) • Program Evaluation Tool • Performance Outcomes Database System (PODS) • Regular updates • Accessible to NIH staff • Budget and Project Period • Deviations permitted • Reasonable and scientifically appropriate for success of the project. Summary

42. www.nih.gov http://grants.nih.gov/grants/funding/sbir.htm Jo Anne Goodnight NIH SBIR/STTR Program Coordinator Phone: 301-435-2688 Fax: 301-480-0146 Email: jg128w@nih.gov Kay Etzler SBIR/STTR Program Analyst Phone: 301-435-2713 Fax: 301-480-0146 Email: etzlerk@od.nih.gov Thank You!