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BIO urges Congress to correct interpretation
of SBIR grants’ eligibility standards

The Biotechnology Industry Organization (BIO) submitted a letter to Congress on July 26, 2005, endorsed by 281 biotechnology CEOs and senior executives asking that the “Save America’s Biotechnology Innovative Research (SABIR) Act,” legislation be passed.

The legislation corrects the Small Business Administration’s (SBA) new interpretation of eligibility standards related to Small Business Innovation Research (SBIR) grants. Many small businesses, including start-up and emerging biotech firms, rely on SBIR grants for "seed" money to fund early-stage research. Under this new interpretation, firms are only considered "small" if they record their funding from actual individuals as opposed to investment groups that provide the bulk of early-stage funding in the biotech industry.

The SBA’s action has forced many biotechnology companies to stop or curtail research into therapies for many diseases, including HIV, lupus, diabetes, leukemia, Alzheimer’s and West Nile virus.

Presently, companies that are 51 percent owned by a group of venture capital firms are not eligible for SBIR grants. Most small and emerging biotechnology companies, which are years away from owning revenue-generating drugs or biologics, must look to the venture capital community for investments to fund the very high-cost preclinical and clinical research.

“Prior to the SBA’s new interpretation, many small biotechnology companies relied on SBIR grants to validate the potential of their research as they raised critical start-up investment funds,” said Jim Greenwood, Biotechnology Industry Organization’s President. “In submitting this letter, endorsed by 281 CEOs – many of whom run companies that have been impacted by the new interpretation – we urge Congress to support this new legislation and re-start the flow of funds to innovative biotechnology companies.”