The SBIR and STTR federal seed funding programs—essential to many biotech start-ups—have been updated with important changes that provide new opportunities to applicants.
These changes include a new Strategic Breakthrough Program, which can bring up to $30 million to impactful innovations addressing pediatric and rare cancers, experts from the National Cancer Institute (NCI) told a Sept. 17 webinar for the Council of State Bioscience Associations (CSBA).
Their presentations offer useful information for oncology biotechs, and any biotech needing seed funding to start their work.
“We tend to be the first source of funds that a company will look for after they’ve raised funds from friends and family,” said Michael Weingarten, Director of NCI’s SBIR Program.
Organized by the Biotechnology Innovation Organization (BIO) as a service for its state affiliates in the CSBA, the webinar covered National Institutes of Health (NIH) Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) grants—particularly NCI cancer research grants.
About SBIR/STTR
The most recent changes to SBIR and STTR were added in March, when the programs were reauthorized by Congress until September 2031. The next application deadline is Jan. 5, which is why this information matters now, the experts told the webinar.
Much of the conversation focused on SBIR grants, which individual start-ups can seek by themselves. STTR grants tend to be larger and support technology transfer. Along with a start-up, STTR grants must include an institutional partner, such as a university, that is transferring the technology.
The impact for start-ups, and American innovation, can be huge. Weingarten cited a 2018 study of Phase II SBIR/STTR grants given out by the NCI for cancer work between 1998-2010. Of those 690 projects, 247 went commercial, achieving over $26 billion in total economic output nationwide and creating over 108,000 jobs with an average salary of $75,000.
“We invested a total of $787 million in those companies to produce that $26 billion return. So overall return on investment for NCI’s money was about 33-to-1,” he said.
The new Breakthrough Program
One of the changes in the SBIR program that received special focus during the webinar was the new Strategic Breakthrough Award. The program can bring a start-up developing an important innovation for an unmet need as much as $30 million in capital at a critical phase of development, explained Billy Baza, Program Director within the NCI SBI Development Center.
“It really has to be a significant improvement to existing standard of care,” said Baza, describing the type of innovation targeted by the Breakthrough Award. “It really has to have an impact on the patients.”
The Strategic Breakthrough Awards differ among the various institutes of the NIH. At the NCI, “our goal is to really fund pivotal clinical studies for pediatric and rare cancers,” Weingarten said.
Investigation showed that the largest amount of private venture capital for oncology development goes to the most common types of cancer. NCI is hoping this program will encourage private investment in the rarer cancers, Baza said.
One way the program attracts private capital is through its 1-to-1 matching provision: applicants must use the grant to attract an equal amount of external funding, whether from a private investor, a partner company or another government program.
“Matching funds need to be secured after the application is submitted, but before the award is made,” Baza said. “That means you’re going to have explain your matching capital fundraising strategy within the commercialization plan.”
Other requirements, according to Baza:
- “The technology has to be at a clinical stage, with some promising early human clinical data as well.”
- Patient unmet need has to be clearly demonstrated. “We’re not looking for incremental improvements,” Baza said. “We want innovations that can really impact high-need patient populations.”
- There must be a credible study plan addressing clinical trial operation and enrollment, and strong interactions with the Food and Drug Administration (FDA).
It can also help to show applicants are receiving FDA support, including Fast Track and orphan designation, or accelerated approval allowing use of surrogate endpoints.
Other procedural and funding changes
Weingarten outlined several changes under the newly reauthorized programs, including a limit of nine applications a year to Health and Human Services SBIR programs. One helpful change allows applicants seeking their first STTR grants to apply for “Direct to Phase II Award,” receiving higher Phase II funding right away without going through Phase I.
Weingarten also discussed the amounts of the awards available from NCI, including changes in those awards:
- The relatively new Concept Award provides very early-stage SBIR funding for a technology that is still just a concept, without supporting data. “We are looking for out-of-the-box ideas and disruptive technologies in the areas of pediatric or rare cancers,” Weingarten said. Applicants can receive up to $300,000.
- NCI increased Phase I awards from a maximum of $400,000 to $700,000. “Typically, those are for proof-of-concept studies,” Weingarten said.
- NCI Phase II awards go up to $2.5 million, usually for 2-3 years. “We tend to think of Phase II as funding IND enabling work,” he said.
- The Commercialization Readiness Program (CRP), for post Phase II, funds early clinical studies and provides up to $4.2 million.
- The above-mentioned Strategic Breakthrough Program is capped at $15 million from SBIR, before private matching funds are added.
“If you look across all these different funding streams, companies can access up to $22 million in funding from our program, which is larger than award sizes from any of the other institutes at the NIH,” Weingarten said.
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