Improving the translation of promising laboratory findings into the clinic is a top NCI priority. One of the most important mechanisms by which NCI helps bring new interventions to patients and clinicians is the Small Business Innovation Research (SBIR) program, which was created by Congress to strengthen the role of small, innovative companies in federally supported research and development.

Traditionally, venture capital firms, larger pharmaceutical and biotechnology companies, and other private investors have provided the investments that these small businesses needed to advance a product through the stages of commercial development. Over the past decade, however, small businesses have struggled to secure such funding. It has been reported that last year only 5 to 6 percent of biomedical deals into which U.S. venture capital firms entered were with companies in the formative stages.

This reluctance has only exacerbated the difficulty small businesses have in bridging what has come to be known as the "valley of death": the period between the basic and preclinical work that produces a potentially promising new intervention and the later-stage research and development, including phase I and II clinical trials, that will determine whether that intervention reaches the market.

This dearth of funding and support has stalled or greatly delayed development of many potentially important new products. Recognizing the negative impact of this trend on patients, NCI is implementing a targeted strategy to help small businesses through the valley of death.

First, we are creating new "SBIR Phase II Bridge Awards" intended to both provide and attract funding to help companies during this transition period.

To qualify for these awards, which are modeled on a National Science Foundation (NSF) program, the small business must secure matching private funds. Because NCI will be sharing in the financial risks of the technology development, we believe these awards will attract both private investors and strategic partners - relationships critical to the ultimate success of the small business. In fact, in a recent NSF study of their program, the commercialization success rate for SBIR Phase IIB awardees was more than double that of those firms who had only received a Phase II award.

NIH Director Dr. Elias Zerhouni asked NCI to lead an effort to find ways to optimize the NIH SBIR program. As a result of this evaluation, we are continuing to lead an implementation plan by consolidating management of all NCI SBIR grants and contracts into a new organization called the SBIR Development Center. This organization also will function as a service center to other ICs, providing support in the areas of business development, market research and analysis, and targeted outreach to small businesses eligible to participate in the SBIR program. Through these services, NCI will continue to provide leadership and generate trans-NIH support in driving important new initiatives that will enhance the success of the NIH SBIR program. Development Center project managers will work with small businesses receiving SBIR funds to assist with commercialization strategies, establish milestones, and identify strategic partners. We are recruiting staff with both scientific expertise and experience in the private sector managing technology development through different research phases and planning for commercialization. Michael Weingarten from my staff, who has led the effort to develop new strategies for enhancing the SBIR program, will head this new center.

Third, we are relying more on contracts to spur the development of technologies or interventions in high-priority areas. Historically, more than 90 percent of SBIR funds have been awarded as grants. Over the last 2 years, however, SBIR has been transitioning toward more contracts for technologies NCI would like to see developed that are specifically relevant to cancer research. This year, we have identified 16 technology areas for which contract solicitations were just announced - contracts that will have specific deliverables and milestones to ensure we are getting the most from our investment.

We have implemented an aggressive effort to market the SBIR program at industry, technology, and drug development meetings and events. By reaching out to leaders in the small business community, we will encourage them to compete for these contracts and increase the quality of applicants.

These changes to the SBIR program are intended to enhance innovation and address the gaps in the development pipeline, and it's our belief that patients will be the ultimate benefactors.

Dr. John E. Niederhuber
Director, National Cancer Institute