BIO demands US small business grant shake-up

A representative of the Biotechnology Industry Association has testified to the US House of Representatives' Science and Technology Subcommittee on Technology and Innovation, concerning the reauthorization of the federal government's Small Business Innovation Research scheme. Gary McGarrity, executive vice president of scientific and clinical affairs of biotechnology firm VIRxSYS, called for changes to the SBIR rules on capital structures which, he argued, effectively rule out many biotechnology sector firms from qualifying for the grants.

The BIO said that, for more than 20 years, small biotechnology firms were able to compete for the SBIR grants until a ruling in 2003 barred firms that are majority-owned by venture capital companies from applying.

Dr McGarrity told the House Subcommittee: "arguably, excluding companies from the SBIR program solely on the basis of their capital structure could benefit eligible companies like VIRxSYS. Yet it does so by making the program less competitive." He also quoted a letter from Elias Zerhouni, the Director of the National Institutes of Health to Hector Barreto, the former Administrator of the Small Business Administration, which stated that the "NIH believes the current rule undermines the statutory purposes of the SBIR program...It undermines [the] NIH's ability to award SBIR funds to those applicants whom we believe are most likely to improve human health."