Securing Funding for Life Science Companies:

SBIR and STTR Grant

General Information and Nuances Given by

Jerry Knotts President, CCVF

(CONTENT ADAPTED FROM AN NIH PRESENTATION)

ABOUT SECUREDOCS

SecureDocs is a virtual data room for sharing and storing sensitive documents both internally and with outside parties. AppFolio, Inc. Company Basics:

Ò  Founded by the team that created and launched GoToMyPC and GoToMeeting

Ò  Backed by leading technology companies and investors

Ò  Web-based business software for financial and legal professionals

ABOUT JERRY KNOTTS

Ò President, California Coast Venture Forum Ò Mentor for LARTA Institute in support of the

NIH-CAP and other initiatives Ò Mentor and coach to entrepreneurs in life

science and other industries Ò BSEE (Electrical Engineering) from The Penn

State University Ò MBA from Auburn University

POLLING QUESTION #1

AGENDA

v  Background - NIH

v  Basics of the SBIR & STTR programs Definitions

3 Phase Program Eligibility

v  SBIR/STTR programs Grant Review Process Grant Selection Criteria Timeline What’s New

NIH MISSION

IMPROVE HUMAN HEALTH through biomedical and behavioral research, research

training and communications.

NIH ORGANIZATION v  FY 2013 Funding Sources (23 Institutes & Centers) FIC - Fogarty International Center NCATS - National Center for Advancing Translational Sciences NCCAM - National Center for Complementary and Alternative Medicine NCI - National Cancer Institute NEI - National Eye Institute NHGRI - National Human Genome Research Institute NHLBI - National Heart, Lung, and Blood Institute NIA - National Institute on Aging NIAAA - National Institute on Alcohol Abuse and Alcoholism NIAID - National Institute of Allergy and Infectious Diseases NIAMS - National Institute of Arthritis and Musculoskeletal and Skin Diseases NIBIB - National Institute of Biomedical Imaging and Bioengineering NICHD - National Institute of Child Health and Human Development NIDA – National Institute on Drug Abuse NIDCD - National Institute on Deafness and other Communication Disorders NIDCR - National Institute of Dental and Craniofacial Research NIDDK - National Institute of Diabetes and Digestive and Kidney Disease NIEHS – National Institute of Environmental Health Sciences NIGMS - National Institute of General Medical Sciences NIMH - National Institute of Mental Health NIMHD - National Institute on Minority Health and Health Disparities NINDS - National Institute of Neurological Disorders and Stroke NINR - National Institute of Nursing Research NLM - National Library of Medicine

NIH SBIR OBJECTIVES & FUNDING

v  Objectives Stimulate Technology Innovation Strengthen Role of Small Business Increase Private Sector Commercialization Increase Small Business Participation

v Funding (FY2012) –[1 Oct 2010 – 30 Sep 2011]

SBIR $634 M STTR $85 M

v  Multiple Mechanisms GRANTS, Contracts, Cooperative Agreements

v  Award Amount and Project Period

Ø  Phase I ~$150,000 6 months Ø  Phase II ~$1,000,000 2 years

Realistic and appropriate

SBIR/STTR AWARD TYPES

v  Investigator-initiated R&D v  Research projects related to the NIH mission v  “Other” areas of research within the mission of an awarding component

YOUR IDEAS

§  SBIR/STTR Omnibus Grant Solicitation (NIH, CDC and FDA) Release: January Open for entire Calendar Year

§  SBIR Contract Solicitation (NIH, CDC) Release: August Open for ~ 3 months

§  NIH Guide for Grants and Contracts Release: Weekly Open as noted

NIH IDEAS

Conduct innovative R/R&D that results in product, process, or service that will...

v  Improve patient health v  Speed process of discovery v  Reduce cost of medical care/cost of research v  Improve research & communication tools

HELP NIH MEET ITS MISSION

v  Small Business Innovation Research (SBIR) Set-aside program for small business concerns to engage in federal R&D --

with potential for commercialization. v  Small Business Technology Transfer (STTR)

Set-aside program to facilitate cooperative R&D between small business concerns and U.S. research institutions – with potential for

commercialization.

DEFINITIONS

SBIR/STTR: 3-PHASE PROGRAM

v PHASE I ➜  Feasibility Study ➜  $150K and 6-month (SBIR) or 12-month (STTR) Award

v PHASE II ➜  Full Research/R&D ➜  $1 M and 2-year Award (SBIR/STTR)

v PHASE III ➜  Commercialization Stage ➜  Use of non-SBIR/STTR Funds

v  Organized for- profit U.S. Small Business

v  At least 51% U.S.- owned and independently operated v  Small Business located in the U.S.

v  P.I.’s primary employment with small business during project

v  Intellectual Property Agreement

SBIR PROGRAM ELIGIBILITY CHECKPOINTS

v  Applicant is Small Business Concern v  Formal Cooperative R&D Effort

➜  Minimum - 40% by Small Business ➜  Minimum - 30% by U.S. Research Institution ➜  Option - 30% by Third Party

v  U.S. Research Institution ➜  College or University; ➜  Other non-profit research organization; ➜  Federal R&D center

v  Intellectual Property Agreement ➜  Allocation of Rights in IP ➜  Rghts to Carry out Follow-on R&D and Commercialization

STTR PROGRAM ELIGIBILITY CHECKPOINTS

SBIR/STTR PROGRAMS PI DIFFERENCES

v Principal Investigator (PI) SBIR: Primary (>50%) employment must be with small business Research institution partners

[Outsource ~ 33% Phase I and 50% Phase II R&D]

STTR: Primary employment not stipulated [PI can be from research institution and/or small business concern* must have permission from research institution]

Requires research institution partners (e.g., universities)

[40% small business concerns (for-profit) and 30% U.S. research institution (non-profit)]

*Varies Among Agencies

Small Business Idents NIH item

Applicant Initiates Research Idea

Grantee Conducts Research

IC Staff Prepare funding Plan for IC Director

NIH Center for Scientific Review Assign to IC and IRG

Scientific Review Groups Evaluate Scientific Merit

Advisory Council or Board Recommend approval

IC Allocates

Funds

Submits SBIR/STTR Grant Application to NIH

~2-3 months after submission

~2-3 months

after review

REVIEW PROCESS FOR RESEARCH GRANT

v  Overall Impact ( On Research Fields) v  Significance (Real Problem/Real People) v  Innovation (New or Improved?) v  Approach (Research Design, Feasible) v  Investigators (PI and team) v  Environment (Facilities/Resources)

… Protection of Human Subjects … Animal Welfare … Budget

PHASE I REVIEW CRITERIA

PHASE II REVIEW CRITERIA

v  Same as Phase I v  Demonstrated Feasibility in Phase I v  Commercialization Plan v  High Degree of Commercial Potential based

on plan

NIH SBIR “FAST-TRACK” BEST OPTION FOR EVERYONE?

v  Convincing preliminary data? v  Clear, measurable, achievable milestones? v  Well-conceived Commercialization Plan? v  Letters of Phase III support/interest? v  Track record for commercializing?

No!

Speak with Program Staff Prior to Submission

SBIR STANDARD VS “FAST-TRACK”

Standard application, review, award process

Fast-Track review option Satisfactory Phase I

Final Report

Phase I 7-9 months

Simultaneous submission/review

Phase I + Phase II

7-9 months Phase II

6 months 24 months

6 months

Phase II

7-9 months

APPLICATION, REVIEW, AND AWARD TIMELINE

SBIR/STTR Scientific/Technical Adv Council Awd Receipt Dates Peer Review Board Review Date Apr 5 June/July Sept/Oct Dec Aug 5 Oct/Nov Jan/Feb Apr Dec 5 Feb/March May/June July

90-Day pre-award costs are allowable: At your own risk…..

7 to 9 months

WHAT’S NEW?

v  Electronic Filing v  Phase Iib – Competing Continuations v  Technical Assistance Programs

PHASE IIB COMPETING CONTINUATIONS

v Goal: Provide additional research funds to move already identified drugs or devices requiring regulatory approval into clinical trials

v Stipulations:

Available only to Phase II grantees preparing for clinical trials

Focus -- Diagnostics, devices, tissue engineering, drug development

Funding level: up to $1M per year for max - 3 years IC must have announced the opportunity

Speak with Program Staff Prior to Submission

TECHNICAL ASSISTANCE PROGRAMS

Commercialization Assistance (CAP)

Business & strategic planning

Builds alliances and investor partnerships

Pilot Niche Assessment

Identify other uses of technology

Determines competitive advantages

Develops market entry strategy

(Phase II Awardees)

(Phase I Awardees)

UNIVERSITY PARTNERSHIPS

v  Consultants on SBIR/STTR

v  Subcontracts on SBIR/STTR

v  Senior Personnel on SBIR/STTR

v  Principal Investigator (with official permission from University)

v  Own small firms (assign someone else PI)

Applicant must

be the small business!

•  Alerts

•  Solicitations

•  Targeted Research Opportunities

•  Sample Application

•  Award Information

•  Collaborative Opportunities

•  Success Stories

http://grants.nih.gov/grants/funding/sbir.htm

Q&A Jerry Knotts, jeknotts@ccvf.org