Bringing Science to the Market: The NCI SBIR Program March 4, 2011 Ali Andalibi, PhD

1. Bringing Science to the Market: The NCI SBIR Program March 4, 2011 Ali Andalibi, PhD NCI SBIR Development Center

2. Today’s Presentation Program Background Helping Companies Bridge the “Valley of Death” -- SBIR Phase II Bridge Award New Initiatives: NCI Investor Forum Regulatory Assistance Program

3. Percent of NCI and NIH Budget Set Aside • SBIR: Set-aside program for small business concerns to engage in Federal R&D with the potential for commercialization • STTR: Set-aside program to facilitate cooperative R&D between small business concerns and U.S. research institutions with potential for commercialization 2.5% 0.3% ~$110 million annually at the NCI ~$650 million annuallyat the NIH

4. Reasons to Seek SBIR & STTR Funding • One of the largest sources of early stage of life sciences funding in the country. • A stable and predictable source of funding • Intellectual property rights are retained by the small business concern • Not a loan – no repayment is required • Doesn’t impact stock or shares in any way (no dilution of capital) • Provides recognition, verification and visibility • Can be a leveraging tool to attract other funding (VC, etc.)

5. SBIR Eligibility • Applicant must be a Small Business Concern (SBC) • Organized for-profit U.S. business • 500 or fewer employees, including affiliates • PD/PI’s primary employment (i.e., >50%) must be with SBC at the time of award and for duration of the project period • At least 51% U.S.- owned by individuals and independently operated • OR At least 51% owned and controlled by another (one) business concern that is at least 51% owned and controlled by one or more individuals

6. NCI Efforts and Programs Focused on Improving Commercialization

7. SBIR Development Center • Established in 2008 • Goal: Enhance commercialization success of SBIR-funded projects Old SBIR Management Model at NCI • Awards were managed by 40-50 Program Directors with an academic focus, whose portfolios were comprised mainly of academic awards (currently the model at other NIH Institutes) SBIR Development Center at NCI • Team of 8 Program Directors focused on the management of NCI’s SBIR/STTR portfolio • Many of the Center’s Program Directors have previous industry experience and professional networks to help mentor awardees in commercialization strategy and process • Center is developing a range of new activities to help small businesses

8. Mentoring and Facilitation Goal To work closely with promising SBIR Phase awardees in order to advance their technologies towards the clinic Path Active outreach to bring in a new class of commercially viable applicants Mentor and guide companies throughout the award period. When appropriate, act as a liaison to bring investors (VC, angels, strategic partners) and NCI SBIR companies together Use the Bridge Award as an incentive to involve investors in Phase II companies NCI SBIR Investor Forum

9. The Bridge Award

10. SBIR & STTR: Three-Phase Program PHASE I – R41, R43 Feasibility Study $150K and 6-month (SBIR) * or 12-month (STTR) Award Phase II Bridge Award • PHASE II – R42, R44 • Full Research/R&D • $1 million and 2-year Award (SBIR & STTR) * • Commercialization plan required • PHASE III • Commercialization Stage • Use of non-SBIR/STTR Funds 10 * Note: Actual funding levels may differ by topic.

11. Follow-on to SBIR Phase II Helps early-stage companies cross the “Valley of Death” by: Facilitating partnerships with third-party investors & strategic partners Incentivizing third-party investments earlier in the development process NCI is sharing in the investment risk with other investors Incentive Structure Gives competitive preference and funding priority to applicants that can raise third-party funds (i.e., 1:1 match) Affords NIH the opportunity to leverage millions in external resources Provides valuable input from third-party investors in several ways: Rigorous commercialization due diligence prior to award Commercialization guidance during the award Additional financing beyond the Bridge Award project period SBIR Phase II Bridge Award 11

12. Example: How the Bridge Award Would Apply in the Area of Drug Development Phase I & Phase II SBIR Preclinical Development (Lead Development, Animal Studies, File IND) Target Identification & Validation Safety Review Clinical Trials NDA Review Commercialization SBIR Bridge Award Private Investment SBIR Bridge Award addresses the problem by bridging the “Valley of Death” SBIR Bridge Awardallows NIH to share investment risk by incentivizing investors or strategic partners to evaluate projects and commit funds much earlier 12

13. Example: How the Bridge Award Would Apply in the Area of Drug Development Phase I & Phase II SBIR SBIR Bridge Award STOP STOP 2nd Year 1/3 of funds 1st Year 1/3 of funds 3rd Year 1/3 of funds YES YES • Milestones reached? • Matching Funds? • Milestones reached? • Matching Funds? • Milestones reached? • Matching Funds? NO NO Preclinical Development (Lead Development, Animal Studies, File IND) Target Identification & Validation Safety Review Clinical Trials NDA Review Commercialization SBIR Bridge Award Private Investment 13

14. Bridge Awards

15. Investor Forum

16. NCI SBIR Investor Forum • 2010 Investor Forum: November 9, Stanford , CA • http://sbir.cancer.gov/investorforum/ • Featured Small Businesses • Exclusive opportunity for 14 NCI awardees to showcase their companies to investors • Present to and network with >150 investors & strategic partners • Participate in panel discussion with successful Bridge awardees and their investors • Investors • Opportunity to evaluate NCI’s top companies with • innovative technologies • Exclusive one-on-one meetings "The Forum was a great opportunity to get exposed to new companies in oncology." - Ankit Mahadevia, M.D., MBA, Life Sciences Associate, Atlas Venture "I was very impressed with your choice of companies.The mix of stages was ideal." - Sarah Bodary, Ph.D., Venture Partner, SV Life Sciences 16

17. Regulatory Assistance

18. Regulatory Assistance Goal Provide Phase II awardees access to regulatory consultants to accelerate the FDA approval process for drugs, biologics and devices Path Provide appropriate Phase II awardees ≥30 hours of consulting time and activities, including: A preliminary conversation with the company regarding the writing of a regulatory plan Review and editing of the regulatory plan Post review discussion 18

19. NCI Has Moved to More Targeted Funding Opportunities • Goal is to improve success in commercialization by focusing on more directed research. • Invest in the technology priorities of NCI that also have greatest potential for commercialization • Catalyze targeted technology development and draw private sector investment in specific areas Approximately $10M in new funding opportunities was announced in November.

20. Contact Ali Andalibi, PhD andalibia@mail.nih.gov Andy Kurtz, PhD kurtza@mail.nih.gov Greg Evans, PhD evansg@mail.nih.gov Michael Weingarten weingartenm@mail.nih.gov David Beylin beylind@mail.nih.gov Amir Rahbar, PhD rahbaram@mail.nih.gov Jian Lou, PhD loux@mail.nih.gov Patti Weber, DrPH weberpa@mail.nih.gov Deepa Narayanan narayanand@mail.nih.gov