Biotechs might compete for business grants

Legislation passed the House of Representatives this week that will allow companies financed by venture capital to compete for Small Business Innovation Research grants.

That’s welcome news for biotech companies, which usually spend decades and billions of dollars on research.

If Congress approves the measure, it will mark the first time in six years that the nation’s biotechnology companies will be allowed to compete for the grants. An administrative ruling from the Small Business Administration removed companies that receive venture capital funding from the grant competition in 2003.

“This is a big deal,” said Loren Lancaster, managing director of Core Capital Group. “The focus right now is to stimulate small business development – not increase the deeper pockets of larger corporations. Companies funded by venture capital can take advantage of grants – and that means they have a better chance for success.”

Many from the biotechnology industry have said the bill will allow companies to compete for money based on the promise of their science rather than the structure of their capital.