Report: NIH SBIR/STTR program supported 99 drugs, numerous successful companies over 25 years

The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs of the National Institutes of Health (NIH) supported the development of 99 drugs from 1996-2020 — a total that includes 16 percent of all such treatments that made a “significant” advance over available medicines. This finding is just one of the impacts that the National Academies of Sciences, Engineering and Medicine (NASEM) attributes to the program in a new report.

To put the NIH SBIR/STTR program’s contributions to drug development in context, SBIR/STTR is less than four percent of NIH’s extramural R&D budget. Further, NIH R&D is just part of total U.S. spending on drug-related research, which is also funded by foundations and businesses (for example, the National Science Foundation recorded nearly $5.9 billion spent on R&D by biotech businesses in 2018 alone).

NASEM’s study also attempted to evaluate any impact that NIH’s SBIR/STTR awards have in health and commercial successes. To this end, the authors evaluated the extent to which average companies, applicants and awardees differ in their outcomes.

One key finding from this analysis is that NIH SBIR/STTR applicants are stronger than average companies. Applicant firms were about 140 percent more likely to achieve an initial public offering (IPO) or acquisition with a price of at least $10 million within six years of founding than other biotechnology startups.

Differences were smaller, but still evident, between funded and unfunded applicant firms. SBIR-backed companies were about twice as likely as unsuccessful applicants to receive a patent (9 percent vs. 4 percent) and receive venture capital backing (4 percent vs. 2 percent) in a given year.

The authors are careful to point out that their assessment is unable to prove that NIH’s SBIR/STTR program is causing the better outcomes for funded companies. NIH reviewers may simply be highly adept at selecting the strongest companies. Still, the knowledge, health and commercial outcomes seem to be at least supported — whether made more likely or accelerated — by the federal funding, given the greater activity levels of funded companies.

NASEM identified several areas for improving NIH’s SBIR/STTR program:

• Strengthened outreach to, and support for, women- and minority-owned businesses.
• Similarly, minority-serving institutions and economically-disadvantaged regions have low rates of participation and need additional support.
• NIH could offer greater consistency in the information provided by each of its centers, including by providing more NIH-wide information.
• NIH should explore streamlined and accelerated review processes so companies can learn of a decision within 90 days of the end of the application window.
• Additional program funding would yield greater publication, patent, clinical trials and drug approval outcomes.

The full report includes an introduction to the SBIR/STTR program, details on NASEM’s methodologies, discussion of NIH’s approach to SBIR/STTR, and a description of awardees, in addition to more information on program outcomes.