NIH Opens SBIR Program to Majority-Owned

NIH Opens SBIR Program to Majority-Owned
ML Strategies Legislative Update
Alex Hecht
[email protected]
ML Strategies, LLC
701 Pennsylvania Avenue, N.W.
Washington, DC 20004 USA
202 296 3622
202 434 7400 fax
Abby Matousek
[email protected]
JUNE 10, 2013
NIH Opens SBIR Program to Majority-Owned Venture Capital Small
Business Concerns
On May 31st, the Department of Health and Human Services (HHS) reissued its Omnibus funding
opportunity announcement (FOA) for the Small Business Innovation Research (SBIR) and the Small
Business Technology Transfer (STTR) programs in order to implement venture capital provisions of the
SBIR/STTR Reauthorization Act of 2011.
HHS notice NOT-OD-13-071 will allow small business concerns that are majority-owned by multiple
venture capital operating companies (VCOCs), hedge funds and/or private equity firms to apply for the
NIH SBIR program and compete for up to 25 percent of NIH’s SBIR set-aside in the Omnibus FOA or
any other NIH SBIR funding announcement issued hereafter. With this notice, NIH is the first agency to
elect to use its authority under Section 5107 of the reauthorization to make awards to majority owned
firms, signaling new and significant opportunities for venture capital in the future.
Implementation of venture capital provisions allows previously ineligible, yet highly innovative firms, to
compete for grants and opens up a significant additional funding to the VCOC community. For example,
under the FY2013 continuing resolution, the total SBIR/STTR set-aside for NIH was over $690 million.
If funding levels were to remain the same for FY2014, majority-owned firms will be eligible to compete
for more than $173 million, or 25 percent of the set-aside. For firms previously barred from participation
in the SBIR program, this is a significant new pool of funding to pursue innovative technologies.
The HHS notice also details that, although NIH is still updating its electronic systems, it is in the process
of implementing additional provisions of the reauthorization. For example, soon small business concerns
will be able to:
Skip Phase I and apply directly for Phase II of the SBIR program through targeted pilot FOAs at
• And switch programs at Phase II to apply for a Phase IIB SBIR or STTR based on a Phase II
SBIR or STTR award.
These additional changes will allow firms that may be further along in the research and development
(R&D) process to compete for larger awards sooner and enable firms to access additional Phase II
funding to bridge the “valley of death” between R&D and commercialization.
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