Tech Transfer University Reporter
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Answers to Your SBIR/STTR Funding Questions


By Debi Melillo
Published: April 15th, 2014

A few weeks ago, we hosted a hugely popular webinar titled: Dispelling SBIR/STTR Funding Myths and Misconceptions for University-Based Innovations that was led by Geoffrey White, PhD, President of Discovery Consulting, LLC. The program is filled to the brim with excellent information and factoids about each program and garnered high praise from attendees. The question and answer session lasted over 20 minutes and the program continues to draw attention, so I thought it would be a great idea to include a portion of it as this week’s blog post. But, this is just the tip of the iceberg — Dr. White covered over 30 slides worth of information in the program and you can get it all — just CLICK HERE to purchase the recorded session.

Read on to see a selection of questions from attendees –some of the answers may surprise you.

Employment requirements

Q: “I understand that SBIRs require that PIs at companies be primarily employed by the companies.  Does this mean 50 percent or more?  May those primarily employed PIs at the companies also have a 50 percent appointment at another organization, such as the university?”

Dr. White:  If you’re going to be a PI for an SBIR, it’s 51 percent employed at the company, and 51 percent is measured by dollars, not time.  And the other 49 percent of the time, a person could be employed by a university, or another company, or something else.  And sometimes I’ve had people at universities do just that: they leave the university for the course of the SBIR, and they get 51 percent of their salary during that time from the SBIR.  And the reason they do that is because they don’t have someone else to go and work at the company, and they need to [fill that role].  Otherwise, you may as well just do an STTR.

Another reason for doing this is that some universities get pretty possessive about some of [their] technologies. Some companies simply say, “You know, that’s too much.  I don’t want to pay those kinds of royalties.  So I’m going to go do it at the company, and then I’m going to go back [to the university].” 

New Drug Start-Up Funding

Q:Will NIH fund pharmacodynamics, pharmacokinetic studies and/or toxicology for a new drug in preparation for an FDA IND submission?”

Dr. White:  Absolutely.  I’ve gotten lots and lots of funding for doing that. The Phase I is a test of feasibility — in fact, what we did is we basically showed that this new cancer drug that we have is very effective.  We showed that in preliminary studies, and then the Phase I studies are just showing some more animal models.  And all of Phase II is all the IND enabling studies that one needs to do.  And at the end of the Phase II, we’re going to file an IND, and hopefully we’ll use a Phase IIB to pay for the Phase I/II clinical trials.

Q:Do you think a drug start-up company based on a novel high throughput screen is fundable through SBIR or STTR?”

Dr. White:  In principle it is.  It just depends on the novel screen.  It’s going to have to allow you to do something that can’t already be done, and maybe you’ll do it cheaper, maybe you’ll do it a little bit faster. But unless you fit at least that tenfold better [than existing technologies], or it will now allow you to screen against the disease that was previously just impractical to screen against.  It’s going to be tough.  So I’d have to know more details about that.  But in principle, yes, you can do it.

Q: “Do SBIR and STTR support clinical trials?”

Dr. White:  That’s a very confusing area.  The answer is: yes, they support clinical trials.  They do not support Phase III pivotal clinical trials of efficacy.  They support Phase I and Phase II trials, which are not for efficacy.  That’s the difference.

Application and Business Strategy

Q: “Is it a long-term business strategy for a small business to rent lab space indefinitely from a university?”

Dr. White:  I don’t think it’s a good long-term strategy.  In terms of SBIRs — no, that’s really a personal decision.  In terms of getting SBIRs, you could do that.  I don’t know why you couldn’t do it if the university was willing to do it.  Of course, the downside is that if the university is now going to want to share in the IP. You just have to decide how that all works for you and what your comfort level is.  Now, they’re doing something for you, you want to do something for them, but how much of it do you want to give up?  So you just have to work out those details and see what’s right for you.  So in terms of a business strategy, there are a lot of considerations to come up with, and it’s really going to be a personal decision: risk versus reward.

SBIR vs STTR: Who has more money available?

Q: “Is there more opportunity in SBIR or STTR in terms of the total money available?”

Dr. White:  There’s a lot more money available with SBIRs, and that could be a consideration, but that’s  if you look at the scores. Usually SBIRs are a lot more competitive in terms of scores than STTRs, so it’s really not the amount of money, but it’s really the score that’s important.  If you’ve got a great project, and you’ve got a great team, and you’ve got a great experimental design, you’re going to get a good score. Also, if you did get a really good score, and for some reason the STTR didn’t get funded, you could always call the program person and say, “Hey, if I turn this into an SBIR, will this be fundable?”  And the program people have the right to do that.  If they want to, they can let you change it to an SBIR.  So they have to agree to do that, but it’s not hard to do.  You just have to be able to find a reasonable way to change around where the money is going. If you can find a way to get the right PI in there of equivalent strength, you can change it to an SBIR if you had to. 

Using a Consultant

Q:What is the best strategy for academic university faculty who are first time SBIR applicants to succeed, especially given that they don’t have much business experience?  Should they necessarily have business consultants?”

Dr. White:  It’s a difficult question.  You should certainly be able to go and talk to your tech transfer office and get some good input.  A lot of this is pretty straightforward.  Go talk to other people who have started companies or gotten SBIRs.  You can go and search the NIH reporter and — or the NSF has an equivalent database, and so does the DOD.  Find people who have gotten funded in your general area.  Call them up.  E-mail them.  And find people who have gotten funded multiple times, not one time.  And chances are they’re going to talk to you and give you the benefit of their experience.But going out and hiring a consultant to learn that stuff is probably not what I would do.

CLICK HERE to purchase Dispelling SBIR/STTR Funding Myths and Misconceptions for University-Based Innovations on DVD, On-Demand Video or PDF transcript. We’d like to thank Dr. Geoffrey White for his presentation.

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Visit www.TechTransferCentral.com for more unique, practical, and advanced strategies, case studies, best practices, and expert guidance on a broad range of challenges and opportunities for technology transfer offices and professionals.

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Best Practices for Fostering University Hyper-Local Innovation Ecosystems


By Debi Melillo
Published: March 31st, 2014

A University Hyper-Local Innovation Ecosystem (Hy-LIE) is defined as a cluster of R&D-oriented entities readily accessible to the campus – including small & large corporations, technology veterans, entrepreneurs and early stage investors as well as related supply chains and service providers. This notion was born several years ago at UC … continue reading »

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Avoid Litigation When Patent Trolls Come Knocking


By Debi Melillo
Published: March 13th, 2014

Trolls, NPEs, patent assertion entities; they go by many different names, and these entities have received a lot of interest of late.  Did you know that 60% of all patent cases now involved such entities?  In 2012 there were 4,700 patent suits, and over 2,400 of those cases were filed … continue reading »

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Pre-launch Considerations for University Innovations


By Debi Melillo
Published: March 3rd, 2014

Arguably, one of the most challenging issues for technology transfer professionals is choosing which technologies to move through the pipeline and whether to license out or create a start up around the innovation. In fact, each decision your team makes can run the risk of degrading relationships with researchers (when … continue reading »

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How to Double your Faculty’s Invention Disclosure Rate


By Debi Melillo
Published: February 17th, 2014

I hope everyone came through last week’s weather unscathed. Here in the Northeast, we had over a foot dumped on us in some areas. The kids loved yet another snow day… us parents, not so much! Fortunately, I’ll be getting far away from the white stuff and heading to the … continue reading »

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Unleash the power of a finely tuned intern program


By David Schwartz
Published: February 3rd, 2014

If you’re like most TTOs, increasing demands for results, yet no increase in staff, means you could face rising backlogs of invention disclosures, slower response times, missed revenue opportunities, and disgruntled faculty.  But there is a proven way to bring on aggressive and talented help without busting your budget — … continue reading »

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University TTOs and licensing professionals beware: A “non-binding” term sheet can be anything but…


By David Schwartz
Published: January 21st, 2014

If you haven’t paid much attention to the Delaware Supreme Court  decision in SIGA Technologies v. PharmAthene, Inc., No. 314, 2012 2013 Del. LEXIS 265, 1-2 (Del. May 24, 2013), it’s time to get familiar with the frightening case – BEFORE you sign your next term sheet. Here’s the background story: … continue reading »

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You CAN cut your patent budget without cutting the quality of prosecution or reducing the number of patents filed …


By Jason Norris
Published: January 6th, 2014

Patent prosecution costs are at the very top of every TTO’s expense list – and that means your office has a big opportunity to reduce costs and make a major budget impact in 2014. But before you go and reduce the number of patent applications your office files, read below … continue reading »

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Answers to the Top NIH Manufacturing Waiver Questions


By David Schwartz
Published: December 16th, 2013

When federal funding is involved, the “preference to U.S. manufacturing” is a requirement (See 35 U.S.C. 204 of the Bayh-Dole Act below). Since manufacturing activities in industries such as electronics, medical devices and consumer products are mostly conducted outside of the U.S., obtaining a manufacturing waiver is an attractive route … continue reading »

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Tips for recruiting your next great start-up CEO


By David Schwartz
Published: December 3rd, 2013

Too many start-ups have failed or stalled because they lack leadership talent. The problem is even more acute for university start-ups, since the CEO must mesh with the faculty inventor as well as the campus culture – an environment that some business pros find difficult and frustrating.  In short, it … continue reading »

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Writing Technology Summaries to Pique the Potential Partner’s Interest


By David Schwartz
Published: November 19th, 2013

If you’re a member of a technology transfer office licensing team and you have written an initial summary about a technology, in many cases the reader will be someone from the business development or the scouting team in industry.  It’s imperative that you gear your message to them. Consider that … continue reading »

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How Five TTOs Are Using Express Licenses… Successfully


By David Schwartz
Published: October 28th, 2013

Since they were first developed several years ago, “express” licenses have become a widely used tool and many organizations are using various versions of standardized license agreements to dramatically speed licensing and start-up formation. In this post, we’ll take a look at statistics compiled from interviews with five TTOs that … continue reading »

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