Nov. 2, 2010
By Kathleen Gallagher of the Journal Sentinel
At least 14 state biotech companies have received more than $3 million in grants from the Internal Revenue Service as part of a federal program to spur job growth at smaller firms and advance the country’s life sciences prowess, according to a BioForward survey conducted Tuesday.
FluGen Inc., a Madison company that is trying to develop a safer flu vaccine, pulled in the biggest grant: almost $700,000. The money will help the company move into clinical trials its first product, a “virtually pain free” microneedle patch that delivers traditional flu vaccine into the skin, said Paul V. Radspinner, FluGen’s president and chief executive.
“We’re in the middle of a financing round, but boy (the grant) takes the pressure off,” Radspinner said. FluGen previously raised $2.2 million from outside investors in a first funding round.
The Qualifying Therapeutic Discovery Project was part of health care reform legislation passed earlier this year. The program provides grants or tax credits to companies of fewer than 250 employees to help create and sustain high-paying jobs and to advance the nation’s competitiveness in life sciences.
The IRS in conjunction with the National Institutes of Health decided which companies would receive the grants, said Kathy Collins, business development director at BioForward, a trade association for Wisconsin’s biotech industry.
More than 5,600 companies applied for the grants and at least 4,000 companies were expected to receive them, according to BIO, the national trade organization for the biotech industry.
Applicants requested more than $10 billion, which exceeds estimates of the amount of research and development done by biotech companies with fewer than 250 employees, BIO said.
FluGen got the biggest grant among Wisconsin companies that responded to BioForward’s survey.
The smallest grant was for $4,000, and most were around $245,000, Collins said.
“This is an innovative new program that will support further biotech development in Wisconsin and the rest of the country,” Collins said.
To qualify, the companies had to show reasonable potential to produce a new therapy to prevent, detect or treat chronic or acute disease and conditions; reduce long-term health costs; or significantly advance the goal of curing cancer within a 30-year period.
Among state firms that said they received grants were several that received $244,500 each:
- Madison-based Exact Sciences Corp. will use its grant money to aid development of Cologuard, its DNA test for colon cancer. The test would work by detecting specific altered DNA sequences in cells that are shed into the stool from pre-cancerous or cancerous polyps. A colonoscopy would be required to confirm abnormalities. The company plans to begin a clinical trial next year.
- Madison-based Flex Biomedical Inc. will use its grant money to bring its Flex Polymer for treating osteoarthritis closer to regulatory approval. Flex’s synthetic, injectable polymer could relieve pain and protect cartilage from further degradation, slowing down the progression of osteoarthritis.
- Fitchburg-based NanoMedex Pharmaceuticals Inc. will use its grant money for development and clinical trials of its first product, Microfol, a new formulation of propofol, a common anesthetic.