Thursday, June 4, 2009

NIH Tosses Small Business a Few Crumbs

I'm not ungrateful. Really. Small technology businesses appreciate any funding opportunities, and the NIH is doing the right thing. But why did it take so long for them to do it? And why is it so pitifully small?

Want to see what they tossed us for Stimulus-funded SBIRs?: RFA-OD-09-009, Recovery Act Limited Competition: Small Business Catalyst Awards for Accelerating Innovative Research

Small business (via SBIR) should have been allocated 2.5% of the NIH's Stimulus pop for R&D. That's something over $200 million. What are they offering us? $5 million. (Hmmmm.... That's 2.5% of 2.5%! Huh! Coincidence or are they sending us a not-so-subtle message?) Funding on these is for up to one year not to exceed $200K. That means a scant 25 awards. Big deal.

Yeah, there's an alleged pot sweetener. Another $35 million to "Spur the Acceleration of New Technologies". But this isn't a small-business only competition. Sure, we can apply. Gee, thanks. Another Challenge Grant-type competition?

Here's that announcement: RFA-OD-09-008, Recovery Act Limited Competition: Biomedical Research, Development, and Growth to Spur the Acceleration of New Technologies (BRDG-SPAN) Pilot Program

Well, whaddya know? Valley of Death funding! This is a whole new category for NIH, and I do congratulate them for introducing this. It's a good start. For a company extending SBIR funded technology, to get this award means it's a Phase III by definition. But it's not limited to SBIR funded companies or subject to SBIR eligibility rules. It's NOT an SBIR program. It even has a new NIH Grant Code: RC3.

You see, there's some interesting wording in the Eligibility section that says: "Applications received under this FOA may be given funding priority if the applicant is associated with an enterprise/commercial organization that is of small size (e.g., 500 or fewer employees), and/or of limited resources, such as an early-stage company, and/or one positioned for receiving funding or in-kind support from a third-party investor and/or strategic partner, etc." The key words are "MAY BE given funding priority". And there sure are a lot of conditions to be sorted out by the NIH funding decision makers.

A friend of mine is the savvy CEO of a small bio-tech company that has won several SBIR awards. He recently made the following very astute observation: "For many years the SBTC and others opposed to BIO’s legislative efforts have argued that VC owned firms should procure NIH funding from outside the SBIR set aside. BIO and NIH have always responded that there are no business funding opportunities outside of SBIR. This new RC3 program -- not SBIR -- is precisely where VC owned firms should be competing for NIH support."

Indeed, there's enough on the table here to attract a VC funded (dare I say controlled) company -- $3 million over 3 years. Much better than SBIR and more focused on where they probably are in their product development life-cycle.

RC3 is a new sandbox for the bigger boys to play in. (Now will you please stay out of ours?) How this new NIH funding category will color the SBIR Reauthorization debate remains to be seen.

But we have had some crumbs tossed our way, so let's get busy. Due date for grant applications in both of these programs is September 1st.


Jonathan Pearl said...

Good to have you back, blogging again, Fred. I think the best thing for the small business community is to inundate NIH with an overwhelming barrage of high quality research proposals.

We need to publicize the program among the many lone (and often lonely) researchers who haven't the slightest idea such early-stage seed-funding even exists, much less that they would be eligible to apply without a university affiliation. (I know. I was among them for five years before I'd heard about SBIR).

I think if NIH is really serious about their stated concerns, it would be in their best interest to spend a few dollars, sending brochures (or even emails) to university departments, which graduate far too many PhDs for the piddlingly few faculty positions available.

Hey, maybe they could even buy some adds in the Chronicle of Higher Education, so all those hopeful and desperate job seekers would realize there are alternatives to sending out yet another dozen faculty applications this year.

I wonder if anyone at NIH reading this might care enough to do that.

Teresa Davidson said...

Great article, Fred. I was looking up the RC3 for a prospective project. It is nice to get the scoop.