On the Road to NIH SBIR/STTR Grant Success-
Submission Strategies for Phase 1/Phase 2 SBIR Applications
SBIR applications to the NIH were initially constrained to submission of a Phase 1 application, and then a subsequent Phase 2 application. The agency has additional application options so companies can now tailor a strategy that best fits their research goals and financial circumstances. Importantly, these can include an awareness of time constraints for optimal marketing opportunities for a company’s technology due to patent timelines. Here are some aspects to consider when applying for SBIR/STTR funds.
What are the Differences Between Phase 1 and Phase 2 SBIR Applications?
Phase 1 SBIR applications are for early-stage research to demonstrate proof of concept and feasibility of new and risky technology, and generally span 6-12 months. The budget is limited to $275,766 (includes direct costs, indirect costs, and fee), although some Institutes award greater amounts for selected topics. Companies should request a waiver from the Institute to exceed this budget cap well in advance of the application deadline.
Phase 2 SBIR applications are to further develop technology described in a Phase 1 application and have an expanded timeline of ~2 years along with a larger budget limit of $1,838,436 (includes direct costs, indirect costs and fee). As with Phase 1 applications, this budget cap can be exceeded for certain topics. All Phase 2 applications (including Fast Track and Direct to Phase 2) have a detailed Commercialization Plan (12 page limit) describing business aspects of the company and how the technology will be marketed.
There are several options to access Phase 1 and Phase 2 funding:
Sequential Submission
A company can submit a Phase 1 SBIR application, and then if the Specific Aims are successfully met, apply for additional funds through a Phase 2 application. The subsequent Phase 2 SBIR application must be submitted within the first 6 submission deadlines after the Phase 1 budget ends.
This approach is suited to emerging companies with limited data to support a new, unproven technology. Through the Phase 1 funds, it provides a chance to demonstrate feasibility of the technology and an understanding of the potential market, which can provide the basis for a Phase 2 application. Due to the grant submission and review process, companies will need to plan for a funding gap of at least six months between the end of the Phase 1 budget and the beginning of a Phase 2 award.
Fast Track
The Phase 1/Phase 2 SBIR applications are combined in this submission and reviewed at the same time. The Phase 1 aspect needs to have clear, measurable milestones for advancing to Phase 2.
This approach is more suited to companies that have a high likelihood of success with proposed work under the Phase 1 aspect of the application. A company can save time as the funding gap after completing Phase 1 is shortened compared with a traditional sequential Phase 1/Phase 2 application.
Direct to Phase 2 SBIR Applications
A company can arrange for Phase 1 work with outside funding, and then apply directly with a Phase 2 submission. The application needs to describe the equivalent of Phase 1 results in sufficient detail to demonstrate proof of concept of a technology. Note that this option is not available under the STTR program and is not offered by the CDC and FDA.
This approach is suited to companies with a more developed technology and a clear understanding of market potential.
How to Choose?
The optimal submission strategy for SBIR applications will depend on a company’s development stage with regard to their technology, level of understanding about market potential to complete a Commercialization Plan as well as the ability to attract other sources of investment to span funding gaps.
Useful websites
Basics of SBIR/STTR grants
https://seed.nih.gov/small-business-funding/small-business-program-basics/understanding-sbir-sttr
Topics allowed for NIH SBIR/STTR budget waivers
https://seed.nih.gov/sites/default/files/NIH_topics_for_Budget_Waivers.pdf
Review guidelines for NIH SBIR/STTR applications
https://grants.nih.gov/grants/policy/review-guidelines/R41-R42-R43-R44-guide-for-reviewers.htm
Learn more about NIH SBIR Grant Writer Dr. Marcy
