Among those anticipating applying for more SBIR funding as a result of the changes are Douglas Doerfler, a BIO board member who is president and CEO of MaxCyte. The company develops cell modification technologies used in discovery, development, manufacturing, and delivery of therapeutics.
“With the new rules that are in place, there’s a pretty bright clean line, which allows us to feel more comfortable,” Doerfler told GEN. “The rules are now much more clear. We know exactly where we fall within the rules.”
MaxCyte won a Phase I grant of $95,725 in 2003 for a new streaming approach to electroportation (EP) technology, followed three years later by another Phase I grant of $116,893 for a scalable lentiviral vector production process, using the EP technology to transfect plasmid DNAs encoding components of bovine immunodeficiency virus (BIV) gene therapy vectors into mammalian cells. In 2008, with its vector production effort showing promise, MaxCyte won a Phase II SBIR grant of $809,064 for an efficient large-scale commercial system for manufacture of lentiviral gene therapy vectors in suspension cells.
“We could not have done that without the support of NIH and the SBIR, no doubt about it,” Doerfler told GEN. “It was a speculative, technically risky program, but it was important, and we really didn’t have the financing available to spend on those kinds of projects—and still today we don’t.”
After receiving its Phase II grant, venture capital firms came to own more than half of MaxCyte. That effectively precluded the company from additional SBIR and STTR funds, since SBA directed that small businesses could only be eligible for the programs if they were “at least 51% owned and controlled by one or more individuals who are citizens of, or permanent resident aliens in, the United States. VC and other investor firms were deemed not to be “individuals” by SBA. While SBA’s directive had an exception (joint ventures), SBA still required each JV entity to be 51% owned and controlled by one or more U.S. citizens or aliens.
Today, three VC firms investing in MaxCyte have representatives on the company’s board of directors—Intersouth Partners, Harbert Venture Partners, and MASA Life Science Ventures.