NIH has reissued its Small Business Innovation Research (SBIR) Omnibus Grant Solicitation announcement, which states that small businesses that are majority-owned by multiple venture capital operating companies are eligible to apply for (1) these SBIR grants and (2) any other NIH SBIR funding opportunities announced after January 28, 2013. The NIH grant solicitation announcement can be found here.
With this re-issuance, small businesses that are majority-owned by multiple venture capital operating companies (VCOCs), hedge funds and/or private equity firms are now eligibleto apply to the NIH SBIR program and compete for up to 25% of NIH’s SBIR set-aside.
The SBIR grant program was reauthorized in 2012 to allow majority venture capital-backed companies to once again compete for SBIR funds, which will help level the playing field for small biotechnology companies so that they can continue to bring innovative medical treatments and cures to market. Allowing small companies that are primarily funded through venture capital to compete once again for SBIR/STTR grants will increase the number of new medical discoveries and innovations available to patients.
On May 15, 2012, the U.S. Small Business Administration (SBA) published a proposed rule for determining ownership, affiliation, and size standards. On December 27, SBA published the final rule, which went into effect on January 28. The final rule provides many clear and bright-line tests that will both encourage participation by small companies as well as protect the integrity of the program. The final rule can be viewed here.
More information on the biotech industry and emerging biotech companies can be found here.