|
It's the dream of every lean and hungry technology company: a new source of research money so executives and scientists can spend more time developing products and less time scrounging for capital. That dream has come true for dozens of San Diego’s smartest firms. They've found that, despite the rhetoric about getting Washington off the backs of business, Uncle Sam can be a pretty helpful funding source.
 Isis Pharmaceuticals, a decade-old Carlsbad biotechnology company, has known that truth for its entire life. Idea-rich but scarcer in the green stuff, Isis went out shortly after its formation and applied for a "whole gaggle" of grants, says David Ecker, managing director of Isis' Ibis division. Much of the funding came from the Small Business Innovation Research program, one of the best-known sources of technology funding for small companies.
The SBIR grants allowed Isis to advance its basic research into antisense technology, Ecker says. Antisense, which temporarily blocks the activity of disease-causing genes, is Isis' core technology. Last year, Isis received permission from the federal government to sell an antisense drug called Vitravene, the first such approval anywhere in the world. The drug treats AIDS-related CMV retinitis, which can cause blindness.
Isis' grant strategy was to target antisense research to specific areas of interest, such as developing drugs to fight against cancer. This approach helped Isis build a broad expertise in the underlying technology. "As we got bigger, and our essential mission was funded more directly and consistently, the SBIR program became a (funding source) for innovative ideas or strategies outside our core area," but still relevant to Isis' mission, Ecker says.
One grant, starting in 1993, provided Isis $550,000 to test the merit of using antisense to inhibit the gene function of the papilloma virus. And earlier this year, the Ibis division landed $6.6 million under a different grant program from the Defense Advanced Products Research Agency to find protection against biological warfare.
While biotech companies are among the most successful grant-getters, the SBIR program spreads the wealth across the technology spectrum. Locally, companies that have received SBIR funding include:
- Qualcomm, which received $207,266 in 1988 to improve message-error detection codes.
- Interactive Simulations, granted $841,378 in 1995 to improve its protein modeling software, Sculpt.
- Quantum Magnetics Inc., which landed $842,238 in 1995 to study the use of Superconducting Quantum Interference Devices, archly called SQUIDS, to noninvasively monitor the heart, brain, nervous system and muscles.
The SBIR program brings together many federal agencies such as the Department of Energy, Department of Defense, National Science Foundation and the Department of Health and Human Services. Under the aegis of the U.S. Small Business Administration, these agencies set aside part of their research grant funds for small businesses. The objective is to jump start the development of important new technologies by small businesses, which create most of the nation's new jobs.
The money comes in Phase I grants of up to $100,000, and Phase II grants of up to $750,000. The first phase is to test the idea's technical feasibility while the second phase examines commercialization potential.
The National Institute of Health is the biggest SBIR awards distributor. This fiscal year, its various institutes will distribute $307 million, says JoAnne Goodnight, the institute's program coordinator for SBIR and a related program, Small Business Technology Transfer Research. Nearly all this money goes to SBIR projects; STTR awards from the NIH totaled just $18 million. (There's also a Phase III, the commercialization phase, but no program money is given.)
To receive SBIR funding, companies must be:
- American-owned and independently operated.
- For-profit.
- The employer of the principal researcher.
- No larger than 500 employees.
The STTR program has a slightly different emphasis: helping get technology out of academia and into the business world. For STTR awards, the principal researcher does not need to be employed by the small business.
"With the STTRs, there must be a formal collaborative agreement between the small business and a research institution," Goodnight says. "It can be a college or university, or some other nonprofit research organization, or a federal research and development center." Under that cooperative arrangement, the small business must perform a minimum of 40 percent of the work, and the research institution must perform a minimum of 30 percent. With both programs, the agencies list areas of interest in their solicitations, but these are not exhaustive, and companies are encouraged to submit their own proposals. Likewise, the grant limits are flexible in cases where the nature of the research makes it unusually expensive. In that case, Goodnight says, "they need to really articulate that in their application and justify it as well as they can."
The proposals go through a two-step review process. The first is peer review by scientists from academia and the business world. The second-level review is conducted by a national advisory council or board of the awarding agency. The Small Business Administration coordinates the program with the various granting agencies, and provides information on the Web at www.sba.gov/SBIR/sbir.html.
ViaSat, a maker of satellite modems and other wireless equipment in Carlsbad, has especially benefited from SBIR awards. Since 1994, ViaSat has received more than $10 million in Phase II grants from the U.S. Navy alone.
The Navy is funding development of a circuit board that contains an encryption device and can work over numerous networking standards, such as TCP/IP, the lingua franca of the Internet. In 1997, ViaSat received a Phase II grant from the Air Force for an Enhanced High Data Rate Tactical Networking system. And two months ago, ViaSat landed the mother of all SBIRs: a $10.2 million Phase III ordering contract from the Space and Naval Warfare Systems Center (SPAWAR). The award was for upgrades to ground control subsystems of its Ultra High Frequency military satellite communications system.
SBIR projects don’t have to be immediately practical. NASA is funding SBIR work to develop the technologies needed for a manned mission to Mars. NASA is considering an inflatable structure called a TransHab, that in slightly different configurations can be used in space and on Mars. Rigid metal structures are thought to be too heavy and vulnerable, but a flexible fiber structure that can be surrounded with water could provide protection and more room at much less cost. So NASA is asking companies to submit their best shot at a functioning TransHab.
It may be possible to use the TransHab on the moon, which has no air at all. To protect against radiation, the structure would be inflated in an underground passage with perhaps 15 to 20 feet of rock overhead, says Al Binder, a lunar specialist at the Lunar Research Institute in Gilroy.
Binder is a principal investigator of the Lunar Prospector, a NASA exploration probe that is studying the moon from a low orbit. In March of 1998, Binder's team reported there are at least 300 million metric tons of water in the form of ice at the moon's poles. In September, Binder revised his estimate to 6 billion metric tons.
Closer to home, but no less bold, the Defense Advanced Research Projects Agency funds research and development of technologies the federal government deems critical. DARPA's successes include funding development of the computer network that became the Internet. The Ibis division of Isis intrigued DARPA with a proposal to develop an antibiotic effective against all bacteria, but harmless to humans. The antibiotic would provide a universal defense against such threats as deadly strains of anthrax, and would have great commercial potential as a new wonder drug against antibiotic-resistant bacteria.
DARPA is willing to take big technological risks for big rewards, says Navy Commander Shaun B. Jones, a medical doctor who is program manager for Unconventional Pathogen Countermeasures of the agency's Biological Warfare Defense Program. The government gets certain rights to the technology in question, but the company is free to sell products based on the technology. More information about doing business with DARPA, including its SBIR awards process, can be found on the Web at www.darpa.mil/info/index.htm.
At Isis, the wide availability of grants has helped the company grow and branch out into more dimensions.
Creative young scientists with innovative ideas were encouraged to apply for the grants, which kept them enthusiastic and also benefited the company with new insights, such as the workings of DNA chemistry. "It gets you out of the box," says Ecker. "It’s like giving young scientists an opportunity to play."
Bradley J. Fikes, a regular contributor to San Diego Metropolitan, is a business journalist with the North County Times and its Temecula newspaper, The Californian.
|
