Top 5 Reasons Why SBIR Must be Reauthorized Now
Small Business Innovation Research (SBIR) grants are critical for supporting small biotech companies with promising science to continue critical research and development of treatments and cures for debilitating and life threatening diseases such as HIV/AIDS, cancer, Multiple Sclerosis and Parkinson’s.
BIO strongly supports passage of the SBIR/STTR Reauthorization Act of 2011 (S. 493) and the Creating Jobs Through Small Business Innovation Act of 2011 (H.R. 1425) as the SBIR program is critical for supporting small companies with promising scientific innovation to continue critical R&D of medical advancements and breakthroughs.
The ability of the SBIR program to provide critical funding for projects with the most potential to benefit the public, will remain hampered, unless SBIR reauthorization updates the program to address the current realities facing these struggling companies.
The program should allow small companies that are majority-owned by venture capital companies to once again compete for SBIR grants based on the merit of their ideas. Allowing small biotech companies that are majority owned by venture capital companies to once again compete for SBIR awards based on scientific merit will ensure the most competitive pool of applicants and that grants awarded will be based on projects that show the most promise in bringing breakthrough therapies to the public.
Why should SBIR be updated and reauthorized? Five reasons:
- Today’s biotech companies are working on transformational therapies that have the potential to extend and enhance the lives of children and adults suffering from serious and life-threatening diseases.
- Small biotech companies focused on promising science need additional resources not readily available in private capital markets. Despite encouraging signs in the economy, private investment in biotech has decreased in recent years. Securing funding for early-stage projects is still difficult and even the top emerging companies that do not obtain private investment often need to piece together funding from multiple sources. It can cost up to one billion dollars to develop a biologic therapy.
- The biotech industry provides high-paying jobs to millions of individuals and has the potential to be a major economic driver in delivering solutions to our nation’s most critical public health needs.
- In recent months, at least 25 biotech companies have either placed drug development programs on hold or cut programs all together. These programs include promising therapies for HIV, brain cancer, lung cancer, and Anthrax exposure.
- The SBIR program is an important component in the foundation and growth of new biotech companies and is critical for supporting small biotech companies. At the very earliest stages of development other sources of financing, such as SBIR grants, have been instrumental in advancing biotech R&D.
The importance of advancing science has never been more important than it is right now as companies are struggling to recover from the economic crisis, and accelerate growth, hiring and research. Reauthorizing SBIR will help struggling biotech companies continue to development novel therapies, and ultimately deliver cures and treatments to address the nation’s most critical public health needs.