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BIO Asks Congress to Amend SBIR Regs; Says Rule Bars Half of Its Small-Bio Herd

NEW YORK (GenomeWeb News) — Eligibility requirements for the US Small Business Innovation Research grant program prevent more than half of all small US private biotech companies that are members of the Biotechnology Industry Organization from competing for grants, according to BIO.
BIO backed its criticism of the program as it called on the federal government to reform the eligibility requirements. It made its petition last week during a hearing on SBIR issues held by the US House of Representatives Science and Technology’s Subcommittee on Technology and Innovation.
The subcommittee held the hearing with an eye toward reauthorizing the SBIR and Small Business Technology Transfer programs in the current Congress, which ends in January 2009.
According to BIO, a 2003 reinterpretation of the program’s eligibility requirements by the Small Business Administration, the government agency that oversees SBIR, renders ineligible companies in which more than 50 percent of the ownership comprises venture capitalists.
Last week, BIO’s executive vice president Alan Eisenberg told GenomeWeb Daily News sister publication Biotech Transfer Week that approximately 70 percent of BIO’s emerging company members are privately owned, and the vast majority of those are majority VC-backed.
“What should dictate the awarding of an SBIR grant is the quality of the science, not a company’s capital structure,” Eisenberg said. “The NIH grant proposal system is based upon the science. It goes through a rigorous peer-reviewed process. Then, at the end, after the NIH makes its assessment, the SBA gets involved and asks, ‘What’s your capital structure?’
“It should be that the NIH says, ‘We, who are charged with providing funds to get the best scientific outcomes on behalf of the American public, want to have the highest quality science, and it shouldn’t matter how a company receives funding,’” Eisenberg added.
The complete version of this report appears in the current issue of Biotech Transfer Week.