Small Business Programs and Policies: SBIR and STTR In-Depth

Small Business Programs and Policies: SBIR and STTR In-Depth

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Robert Vinson: Hello, our session today will cover the NIH small business program with an in-depth look into the small SBIR and STTR programs. I'm Robert Vinson, Small Business Program Manager, and my colleague Stephanie Fertig is the HHS Small Business Program Lead. We will cover this material today. I'll lead off and Stephanie will transition into the remaining portion of the presentation. So let's get started.

The NIH Small Business Program website, we're launching a brand new or updated, revised, new edited website which will be launched May 21st or May of this year, and the website can be found at Everything that we're talking about here today will be found on the website, all the material, all of the information as far as funding announcements, contact information, how to do that, how to submit various applications, infographics and other information. We also have websites or other websites linked to it that will be able to help you submit a good grant application or contract application will be able to take you to that particular site. Also, this is very important to understand that under the Department of Health and Human Services, there are four major components. NIH is the largest with a budget of approximately $1.2 billion

for SBIR and STTR Awards. The CDC has a much smaller budget and it's only for SBIR awards, but they have a very robust program as far as submitting or contacting us and as far as submitting applications or having budgets available and applications and initiatives that will help drive the science or help drive the small business program from their perspective. The Food and Drug Administration has a small SBIR budget also, and the Administration for Community Living has a budget of approximately $3 million. These three components are only funding SBIR. However, they still are very active in the small business program and the NIH and we fund both SBIR and STTR awards.

Our mission, as stated here, the primary focus is to move small business programs to help NIH accelerate discoveries from the bench to the bedside, with the emphasis on the application of knowledge to enhance health, lengthen life and reduce illness and disability. These programs are congressionally mandated. The SBIR program is approximately $1.1 billion, and it was started in 1982 and the STTR program was started in 1992 with a budget of approximately $150 million. The major difference between these programs is that the STTR program is you must partner with a research institution with the potential for commercialization.

The budget, I want to make sure that you understand that looking at this pie chart here, the largest component out of the twenty four institutes and centers that provide funding here at the NIH is the Cancer Institute going around as far as budget size, you have Allergies and Infectious Diseases. You have the Aging Institute, Heart, Lung and Blood Institute and all the way around to the smallest component, which is the National Library of Medicine. Please do not get caught up in looking for the largest funder or who has the largest budget.

Your application should be based on the research that you are looking at. Don't get caught up in who has the most amount of money. Base your application on your area of research. OK, there are several very excellent there are several great benefits of applying for funding through the NIH, the most or the first one is the fact that this is considered non dilutive capital. This is not a loan. You do not have to pay points or pay interest on it. This money

is literally free. You must make sure that oh we want to make sure that you understand that the data and intellectual property rights remain with you or remain with your company. You also it's a very big benefit the fact that most companies who apply for funding and obtain SBIR or STTR grants, investors and strategic partners are looking at companies that have received funding from a federal agency, i.e. the NIH. They consider at that time, once you receive funding from from us, is that the initial risk has been mitigated to a certain extent. And so they're much more comfortable in partnering with you or providing additional capital to continue your commercialization goals. Want to talk, you're going to see this particular slide, the NIH application and review process, approximately this process from the time you submit an application until you actually receive the funds, it's approximately six to nine months.

So it's going to take some time. You must be willing to you must have the structure in place, the financial structure in place to be able to go from the beginning, submitting an application until actually receiving the funding. This process going to talk about the small business eligibility all the way around to the institute, the institute actually receiving the funds.

The two real important components here, the fact that these programs are peer reviewed. So we also have the scientific review group evaluates the merit of the application. And then we after that, it goes to advisory council or a board recommended for approval. So it's very important that you understand that this process does take some time and it does require some patience. Want to talk just a little bit about eligibility, that it's is relatively simple, but we have an awful lot of questions concerning eligibility. The important thing is that these awards of this funding is for US or for for profit companies within the United States.

For profit businesses must have less than 500 employees, including any affiliations with that particular company or with your company. All work, except for a few exceptions very, very few exceptions, must be done within the United States. The the eligibility is determined at the time of award. So you can have a case where at the time that you are applying or prior to applying, you're not eligible, but you get things in place, you get things set up to make you eligible.

So at the time that you actually receive the award, you must be eligible to to actually receive that particular award or grant or contract. It's also important that individual ownership, it can be broken down into a couple of components. You must have greater than 50 percent US owned by individuals or independently operated. And you also want to have greater than 50 percent owned or controlled by other business concerns.

And in this case, we're talking about controlled by one or more individual groups, i.e. individual or Indian tribes or Alaska native corporations or native Hawaiian organizations, that's what these acronyms represent here. So you must have that still must be greater than 50 percent ownership. And finally, the the other component that incorporates equity firms or venture capital or hedge funds still must be greater than 50 percent owned by multiple venture capital operating companies, hedge funds and the like. And this is only for SBIR awards only as STTR awards are not do not qualify for venture capital or hedge funds or private equity firms.

At this point. We're going to transition to Stephanie. Stephanie FertigThanks, Rob. So now we're going to take a look at the submission process, how do you actually submit an application? Well, first off, the website is a wealth of information. It includes funding opportunities which are highlighted here, as well as a flow chart highlighted here.

If you're new to SBIR investors to help you walk you through the process of submitting your first small business application. Now, we recognize that this whole process can be very daunting to new applicants and in fact, eight of our institutes and centers have created and a program specifically for those phase one applicants who have not yet received a small business grant. This applicant assistance program and the link is located on the slide here, might be right for you. I'd encourage you. You've never received an NIH small business grant to check out the program.

One of the major goals is to increase participation by groups that have been historically underrepresented in the program, Women-Owned, or those businesses that are socially or economically disadvantaged and businesses from our states that are historically underrepresented in the program as well. Now, the vast majority of our applications are actually investigator initiated, that means that the company identifies that a problem, sees a solution and comes to us with that great >> innovation and asks to be supported. We have three standard receipt dates a year, and this is a little bit different from some other agencies. You do have those multiple receipt dates a year. You can see them here.

But some targeted programs have different receipt dates. So it's important to read those targeted, read the grant solicitations very carefully. So let's talk grant solicitations. So we have the general omnibus solicitation and those solicitations are where those investigator initiated grants come in and again, the vast majority of our applications come in through that investigator initiated program announcements. You take a look at our program announcements right now.

You might see that they've come to an end, but not to worry, new solicitations will be released shortly. So we will have new solicitations ready and available for the September 5th deadline. It's really important to read the program descriptions and research topic section very carefully. As Rob noted, we have twenty four different institutes and centers that participate in the program, but each of them utilize the small business programs differently. And so it's really important to make sure that you read what each institute and center might be interested in and what their specific guidelines are around budget or topic area.

We also have targeted solicitations and you can see where those are located on our website here, but it's important to note not all of those targeted solicitations have special set aside or peer review. So it's important to read them carefully. And then if you have questions, contact the program official that's listed at the bottom of the solicitation. They'll be able to tell you that solicitation is right for you and help answer any questions that you might have. NIH does have a contract, SBIR contract solicitations. Not all institutes and centers participate in our contract solicitations.

And again, the vast majority of the small business, the small business awards we make are in the form of grants or cooperative agreements, not contracts. But you can find a listing of all the things that are currently available on the website you see here. As Rob mentioned, we have both an SBIR and an STTR program. And you might have noticed that some of our solicitations are specific to SBIR and specific to STTR.

And again, the big difference between an SBIR and an STTR is in that partnering requirement an SBIR permits partnering and an STTR requires a nonprofit research institution. The other differences around the work requirement or the principal investigators employment requirements, that all stems from that big difference. But at the end of the day, regardless if it's an SBIR or start, the award is always made to the small business. Now, this is a big slide, and I'm going to spend a little extra time here because it really talks about the structure of the programs. Small business programs are phased programs, there's a Phase I feasibility study and Phase II, full research and development.

Now, one individual's feasibility study is another individual's full research and development, and in fact, at the NIH, we're very flexible with the definition of feasibility study or full research and development. That allows companies to really take advantage of the program in the way that makes the most sense for them at their specific point in their product development pathway. Companies have three ways to come into us to the program. They can come in as a Phase I, standard Phase I, to do their feasibility study and then come in for a Phase II when that's been completed. They can come in as a Fast-Track that combines the Phase I and Phase II together into one application, it gets reviewed as a complete package. The transition between the Phase I and Phase II is reviewed by program staff.

And then finally, there's the Direct Phase II for those companies that have already completed their feasibility and are and can go directly into the Phase II, but it's important to note that's only available for the SBIR program. Now, regardless how you get to the Phase II, whether it's the standard Phase I, Fast-Track, or Direct Phase II, we really do recognize that often that's not enough funding and support for some technologies or innovations to get to a commercial market or to get to that inflection point to be picked up by an investor or a partner to help take it the rest of the way. That's why we have Phase IIB or an additional Phase II to help provide additional funding and support, as well as a Commercialization Readiness pilot Program, again to provide technical assistance and business assistance and in some cases late stage research and development. Now only some institutes and centers participate in these programs, so again, it's important to reach out and talk with program staff well in advance of applying. Another big question we get is around the budget.

And so, you can see here, the Small Business Administration budgetary guidelines. However, the NIH has a waiver from the Small Business Administration to exceed these budget budgets for many topics. And that's why it's important to, again, reach out and talk with us, because individual institutes and centers may have some additional flexibilities around the budget for your topic area. And that way we might be able to support more of what you'd like to do and what you need to do to, again, get to that commercial market or inflection point. So, again, and I think we're going to reiterate this a couple of times, but please come and talk to us. And that's that's what we really is the most important thing for you to do.

Another thing you might notice about our our program funding opportunities is that we designate clinical trials required, clinical trials optional or clinical trials not allowed. It's really important for you to know whether or not you're doing a clinical trial as per the NIH clinical trial definition. The NIH clinical trial definition is not the same thing as the FDA clinical trial definition, and in fact, many times companies don't realize they're doing a clinical trial or doing human subjects research and they think, I can't possibly be doing a clinical trial but according to the NIH definition they are. I strongly encourage you, if you're doing human subjects research, please check out the decision tool that's located on the Web page you see here to see if you are actually considered a clinical trial for the NIH.

It's really important if you're doing any human subjects work to talk to a program officer in advance of applying, because not all institutes and centers accept clinical trials through the small business programs. OK, once you figured out which program announcement to apply to, how do you apply? Well, we accept applications electronically, and it's really important that you make sure that you have all the required registrations done well in advance of the application solicitation or receipt date. That's because these registrations can take quite a while in some cases to finalize. So you can see them all here, but again, you can go to the infographic that is listed on the slide deck and find more information about each of these individual required registrations. Now, grants submit through ASSIST or [Workspace]. We strongly recommend ASSIST. And contracts submit through the electronic contract proposal submission website.

We get a lot of questions about the specific forms and exactly how to fill out different components of the forms. There's a great annotated form set for grant applications, again, strongly encourage you to take a look at that. It walks you through what each individual line item needs, as well as the 424 instructions wealth of information there as well. They're very searchable, strongly encourage you to look there first when you have a question, because oftentimes it can be found within that instruction set or in this annotated set. But really, the most important piece of advice is to talk to a program officer.

And I generally encourage people to contact a program officer at least a month before the application deadline, as you can imagine, everybody's calendar gets a little busy before those standard receipt dates. So you want to make sure that you get time with your program officer to discuss your specific project and get your questions answered. You can find specific program contacts on our website under Engage and Connect, and you can see there with the arrow, the IC Program Contacts Assistance for Institutes and Centers. So those are the individual institute and center program contacts.

You can also see that on the link here. Not sure who to contact or which institute or center might be the best fit for you. You can review those program descriptions, but if you're still not sure, another way is to use the Research Portfolio Online Reporting Tools or RePORT. That can help you look and see what projects similar are in the same area as yours have been historically funded by what institute or. Still not sure who to contact? That's OK, you can email or contact us.

We're happy to help. If you provide a brief description of a project, we're happy to help try to connect you with the best institute or center for your project. All right, so you've submitted. You've successfully applied. And now what? Well, the next step is peer review.

Your application is assigned primary assignment to an institute or center, as well as a scientific review group. Now, that scientific review group is is set up and run very similar to other NIH scientific peer review groups and a scientific review officer looks at your application and assigns it to at least three peer reviewers. Now, those peer reviewers are going to be looking at that application with the following score criteria, and for those who have come into the NIH and applied before, even if it's been other grant mechanisms, these four criteria will look probably very familiar to you. When reviewers are looking at SBIR and STTR applications, they're looking at five main review criteria and they're going to score them with a score of one to nine. One is the best and nine is the worst.

They're going to score them on those five different review criteria, they are significance, innovators, innovation, support, approach and environment. Even though the overarching scored review criteria are the same as some of the other more hypothesis driven grants at the NIH, the scored review criteria for the SBIR and STTR program makes takes a more commercial or product development approach for the significance we're looking at what is the real problem that you're trying to solve and what's the commercial potential? Are you really, you know, is this a real need that's out there in the community? How significant is this innovation going to be if successful. For the investigators, is this a real solid team that can take it all the way through and help take something from that innovation through the product development pipeline? Is the innovation new or improved, how different is it from what else is already out there? Is the approach reasonable and feasible? Is this the next best step on that product development pathway? And finally, is this the right environment, do you have the facilities and resources necessary to do the proposal that you're proposing in the application. You can see there's some additional review criteria listed here as well involving human subjects for vertebrate animals and biohazards. What you might have also noticed is that budget is not an additional review criteria or even a scored review criteria.

So while reviewers do comment on the budget, they do not score the budget, but program staff and reviewers do look at the budget to see if it is reasonable for what is being proposed in the grant application. Now, this is a very brief overview of the overall review process, and you can find a lot more information at the Center for Scientific Review. One of the most important things that I do try to emphasize is that you may have to resubmit and in fact, I encourage you to be prepared to resubmit. Now, Dr. Carter, I included a wonderful quote from from her talking about how the SBIR and it has been a real long journey for her company.

For her and her company. And while she's had multiple submissions that were not discussed. She has been successful in getting funded grant applications. She's served as a reviewer. And it's important to not be discouraged in the application, the application and review process, and be prepared to take the with your comments and every application gets reviewer comments, regardless of whether or not it scores well or not so well.

Take that information, reach out to a program officer, and ask to discuss your specific summary statement. The program officer can walk you through the summary statement and help make you help you determine what might be the next best steps for your company. And oftentimes that's resubmission. Another great way to become more familiar with the review process is to offer to be a reviewer.

We'd love to have you be a reviewer. We're always looking for great reviewers to help review our small business and other applications so you can offer to be a reviewer. Again, you can reach out to us.

We'll have our contact information at the end of the of the video here. And please reach out to us. Send us your CV and you can pass it along to the Center for Scientific Review. The small business program is just one part of the SEED Office that we have here now, SEED is is an acronym, but it's also a word and it's really related to the small business programs, which are America's SEED Fund. The Small business Education and Entrepreneurial Development Office or SEED really it was created to help support the NIH innovator community and facilitate those strategic partnerships.

So help bring companies into the program, help support them with funding, with grant funding, and then help connect those those companies to partners and investors to help bring them the rest of the way. So, again, it's more than just funding. It's an entire community that is here to help support them. We're not just funding. We provide technical and business assistance in the form of our needs assessment program, and I'm going to give a little bit more detail on that in a minute as well as allowing companies to put in technical and business assistance funding in their grant application in their grant applications.

We have programs focused on education because, again, we really do recognize that many of our applicants this may or be your first company and this is your first time doing or being part of a business, there's a lot to learn. And so we're here to help. We have funding and support to help in that a little bit later stage again, the Commercialization Readiness Pilot or CRP can help provide some of that technical assistance, as well as, in some cases, late stage development. And we also have regulatory and business development consultants.

And those regulatory and business development consultants help peer mentoring and help our companies as they go out and do partnering and investing opportunities that we support across the nation and throughout the year. Now, specifically for some of our our less experienced and earlier stage companies we provide the TABA needs assessment. And this TABA needs assessment report evaluates companies and projects in the different commercialization areas you see here.

TABA needs assessment reports help validate request for TABA funding and helps companies write a strong Phase II commercialization. A number of companies have participated in our launch, we just launched this new program and we've got a lot of positive feedback. And so for those awardees, particularly Phase I awardees, we really encourage you to take a look at this free program. And and apply a fairly straightforward form to request the ability to utilize the program, and we're also happy to take any questions that you might have.

As I said, we have a strong team within the SEED Office to help support awardees and provide guidance with either in the finance, strategy, intellectual property or regulatory space. And with that, I encourage you to reach out and and talk with us. There's multiple ways that you can get connected with the SEED Office. You can connect with us on Twitter, follow us on LinkedIn, check our Web site to subscribe to our listserv, and if you have any questions, you can email us at Thank you.

2021-05-08 19:51

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