A coalition of patient advocacy and medical speciality groups in the US has joined the Biotechnology Industry Organization (BIO) in urging Congress to give back small majority venture capital-backed biotechnology companies the eligibility to compete for Small Business Innovation Research (SBIR) grants.

In 2003 the Small Business Administration reversed a 20-year policy by ruling that companies 51% owned by private investors no longer qualified for SBIR grants, BIO pointed out. The association asked for a rethink at a roundtable discussion held by the Senate Committee on Small Business and Entrepreneurship to prepare for the forthcoming re-authorisation of the federal SBIR programme.

By excluding these small biotech companies from the SBIR programme, “a less competitive system is preventing the best science and innovation from being funded”, claimed Alan Eisenberg, BIO executive vice president for emerging companies and business development. “Meanwhile, some companies have taken advantage of the system by receiving hundreds of awards.”

The plea was backed by a letter to Congressional leaders from 52 patient advocacy and medical speciality groups reflecting a diverse cross-section of diseases including cancer, diabetes, Parkinson’s, multiple sclerosis and Alzheimer’s.

Funding early research

SBIR funds provide critical ‘seed’ money for early-stage research and development undertaken by small companies with fewer than 500 employees, the letter noted. Because of the unique capital needs of biotechs, most are now ineligible to compete for grants under the programme.

Of the 163 companies and affiliates involved in the development of the 252 biologics approved by the US Food and Drug Administration, 32% have received at least one SBIR or Small Business Technology Transfer (STTR), the letter said. “The current eligibility guidelines are prohibiting many of the most innovative companies from competing for crucial early-state research and development funding, which impacts the future of the research being pursued by universities and the patients that ultimately benefit from new treatments and cures,” it commented.