National Institutes of Health

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National Institutes of Health
Commercialization of NIH SBIR/STTR Projects
National SBIR/STTR Conference October 28-31, 2002
Jo Anne Goodnight and Kay Etzler NIH SBIR/STTR
Program
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From the Test Tube to the Medicine Cabinet

• Small BUSINESS Innovation Research
• Think very early about your commercialization
  pathway
• HOW will you commercialize? WHO will buy
  it?
• Research Research. Research
• Market will willingly accept your idea NO
• Business Planning is CRITICAL to the Companys
  Commercialization Plan

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CommercializationA Magic Formula?

• ? Phase I Phase II Phase III
• Typical for SBIR/STTR Projects that do not
  require clinical evaluation
• ? Phase I Phase II ? Phase III
• Typical for SBIR/STTR Projects that require
  clinical evaluation and FDA approval

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Commercialization Issues

• Phase II to Phase III Bridge or Pier?
• Clinical evaluation and FDA approvals
• cGMP and GLP Facilities
• Partnerships and Strategic Alliances
• Drugs and Biologics Require vast amounts of time
  and
• Average of 8.5 years
• (lab research/animal testing to clinical
  trials)
• Average of 400M

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Manufacturing and Marketing Your Product

• Do it yourself.
• Potentially very lucrative
• Also extremely expensive and very risky.
• Most companies founded on a single good idea or
  product fail after three or four years unless
  they can come up with additional products.

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Manufacturing and Marketing a Product

• Sell your idea.
• Identify a company that's interested in your
  product
• Negotiate the best price you can, and take the
  money and run.
• It's the safest strategy, but sometimes the least
  profitable. If the product takes off, you're left
  behind.

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Manufacturing and Marketing a Product

• License your idea.
• Rather than sell the concept outright, license a
  company to manufacture and market your product in
  return for an initial fee and royalty checks.
• Most licensing agreements pay the creator of a
  product anywhere from five to 10 percent of
  revenues.

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Manufacturing and Marketing a Product

• Attend Trade Shows
• Excellent way to find a buyer for your product
  idea.

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From Test Tube to Medicine Cabinet

• Few small companies have all the resources
  necessary to develop their ideas into a
  marketable state.
• Majority of profitable and innovative products
  require third parties to supply
• Advice
• Development funding
• Technology know-how
• Design or marketing expertise
• Manufacturing capability

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Getting a Drug to Market A Long, Complicated
Journey

• Each drug has its own way of being born
  (Clement Stone, Former VP, Merck and Co. Inc.)
• Clinical Evaluation and Regulatory approvals
• Different requirements
• Medical Devices
• Drugs
• Biological Products
• cGMP and GLP issues

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http//www.fda.gov/cder/handbook/Develop.gif

• NDA Contains
• Pre-clinical studies
• Human clinical studies
• Manufacturing Details
• Labeling Info
• Other Info

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Getting a Medical Device to Market

• As easy as 123!
• 1) Verify Your Product Meets Definition of
  Medical Device
• Section 201(h) of Federal Food, Drug
• Cosmetic Act
• May actually be a drug or biologic
• different requirements

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Getting a Medical Device to Market

• 2) Classify Your Device
• Identify the marketing process
• Premarket notification (510(k)
  http//www.fda.gov/cdrh/devadvice/314.html
• Premarket approval (PMA) http//www.fda.gov/c
  drh/devadvice/316.html

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Getting a Medical Device to Market

• 3) Submit Marketing Application
• to obtain FDA clearance
• 510(k) Information
• http//www.fda.gov/cdrh/devadvice/314.html
• PMA Information
• http//www.fda.gov/cdrh/devadvice/316.html
• Exempt Device Information
• http//www.fda.gov/cdrh/devadvice/3133.html

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FDA Technical Assistance
Each Component of FDA has an Office to Provide
Technical Assistance to Manufacturers

• Human Drug Products
• Biological Products
• Animal Drugs and Devices
• Food Products and Cosmetics

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FDA Technical Assistance
Human Drug ProductsCenter for Drug Evaluation
and Research (CDER) Telephone Number
301.827.4573Fax Number 301.827.4577Fax-On-Deman
d 800.342.2722 or 301.827.0577 CDER Home Page
http//www.fda.gov/cderEmail Address
DIB_at_cder.fda.gov
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FDA Technical Assistance
Biological Products Center for Biologics
Evaluation and Research (CBER) Telephone Number
301.827.2000 or 800.835.4709Fax Number
301.827.3843Fax-On-Demand 888.223.7329 or
301.827.3844 CBER Home Page http//www.fda.gov/c
berEmail Addressa. Manufacturers Assistance
and Technical Training Team MATT_at_.cber.fda.govb.
Consumer Health Professional Assistance
OCTMA_at_cber.fda.gov
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FDA Technical Assistance
Animal Drugs and Devices Center for Veterinary
Medicine (CVM) Telephone Number
301.827.3800Fax Number 301.594.1807CVM Home
Page http//www.fda.gov/cvmEmail Address
fdacvm_at_informatics.vetmed.vt.edu
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FDA Technical Assistance
Food Products and Cosmetics Center for Food
Safety and Applied Nutrition (CFSAN) Telephone
Number 301-436-2335Fax Number 301-436-2764
CFSAN Home Page http//vm.cfsan.fda.gov/list.htm
lEmail Address OCO_at_cfsan.fda.gov
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FDA Technical Assistance
Small Business Guide to FDA
http//www.fda.gov/ora/fed_state/small_business/sb
_guide/intro.html
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http//www.fda.gov/ora/fed_state/Small_Business/re
gional.htm
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One Companys Recipe for Commercial Success
Measurement of Hemodialysis Access Flow
Recirculation (NIDDK Grant)

• Patient Monitor for use in hemodialysis clinics
• offering novel diagnostic measurement
  capabilities to the nephrologist
• incorporated in the National Kidney Foundation
  Guidelines for Patient Care.

Transonic Systems Inc. Ithaca NY
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One Companys Recipe for Commercial Success
(cont.)

• Submit SBIR projects that match companys
  corporate product portfolio
• SBIR incorporated into companys strategic plan
• Products the company wants to develop and market
  on its own, if it had adequate financial
  resources
• Products that utilize companys core competencies

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One Companys Recipe for Commercial Success
(cont.)

• Develop SBIR task list to include essential
  commercialization milestones
• Delivery of prototypes to, and validation studies
  with independent researchers
• FDA Clearance data gathering and FDA submission
• End-product of Phase II must be ready to be
  marketed

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One Companys Recipe for Commercial Success
(cont.)

• Keep the commercialization under companys
  control
• Develop products that they want to market
  themselves.
• (Third-party distribution channels only develop
  after new product becomes successful.)
• Phase II collaborators expected to publish. to
  give new products a first commercial exposure
• Pre-show products at scientific meetings

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One Companys Recipe for Commercial Success
(cont.)

• Successful commercialization of SBIR Products is
  not an after-thought
• SBIR grants are a means to tackle product
  developments sooner and faster than we could do
  on our own.

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Future Directions at NIH to Assist Companies in
Commercialization

• Competing Continuation Phase II Applications
• Technical Assistance Programs at NIH

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Future Directions at NIH to Assist Companies in
Commercialization

• Competing Continuation Phase II application

http//grants.nih.gov/grants/guide/pa-files/PA-02-
173.html

• Purpose
• - To take existing, promising compounds developed
  under a Phase II through the next step of drug
  discovery and development.
• Additional research support to address clinical
  issues, and other issues relevant to regulatory
  approval
• (e.g., FDA)

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Future Directions at NIH to Assist Companies in
Commercialization

• Competitive Continuation Phase II application

http//grants.nih.gov/grants/guide/pa-files/PA-02-
173.html

• Eligibility
• SBIR Phase II awardee
• Promising pharmacologic agents have already been
  identified and some preclinical pharmacology has
  been conducted.
• Response to an NIH Program Announcement
• (e.g., NIMH)

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Future Directions at NIH to Assist Companies in
Commercialization

• Competitive Continuation Phase II application

http//grants.nih.gov/grants/guide/pa-files/PA-02-
173.html

• Award Amount and Project Period
• Up to 3 years
• 800,000 total costs per year

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Future Directions at NIH to Assist Companies in
Commercialization

• Technical Assistance Programs at NIH
• Pilot CAP Program (NCI)
• Identify menu of items to offer through other
  TAPs

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Pilot Commercialization Assistance Program

• Goal Teach business skills to help mature
  SBIR/STTR-developed technologies (move them
  forward into marketplace)
• Focus
• Business plan development
• Opportunity forum (marriage broker)

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Development of Technical Assistance Menu

• Assistance with
• Developing Product Development Plan
• Developing business plans
• Valuing a technology
• Risk assessment
• Market assessment
• IND filings
• Manufacturing issues