Two-thirds of the proposed research was reported to be focused on preclinical or discovery stages.
Limitations of the survey data. The surveys themselves were all limited to BIO members—a membership more likely on average to have received venture capital funding. This is, therefore, necessarily not a representative sample of the industry (nor was it presented as such).
This point is buttressed by a comparison between the BIO survey and the NRC Non-participant Survey. About 18 percent of BIO respondents—or 8 percent of BIO’s emerging company membership—reported that they had been excluded as a result of the SBA ruling, while about 2 percent of NRC respondents indicated that venture capital ownership was the primary cause of their non-application to the program.4
Moreover, details of the surveys and the methodologies used for them have not been provided by BIO, so it is not possible to determine whether the survey process itself inadvertently introduced biases into the results.
Conclusions. Overall, it seems fair to conclude on the basis of the BIO testimony that for a limited but still substantial number of firms, the SBA ruling has blocked access to a source of NIH funding that was in the main used for research on potential new products and applications that were not the company’s lead focus. In some cases, this led to delays or to the abandonment of the research.
The testimony did not however provide compelling evidence that the size of the problem was substantially greater than estimated by the NRC survey.
It did show that some research had been negatively impacted, and in some cases eliminated altogether. However, BIO provided no evidence to suggest that this research was more valuable than the research supported through the diversion of SBIR funds away from venture capital-funded companies to other companies. Nor did BIO present any evidence that SBIR supported research at venture capital-funded companies was more likely to reach the market than other SBIR-supported research at NIH, or more likely to have a major impact.
It is worth noting that according to the third quarter 2007 PWC Moneytree survey, approximately 100 investments per quarter are made in the biotech sector. <https://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=notice&iden=B>.