Innovation Corps (I-Corps) at NIH:Hypothesis-Driven Customer Discovery

for SBIR/STTR Grantees

Bench 2 Business (B2B) – University of KentuckyMay 19, 2015

Andrew J. KurtzNational Cancer Institute (NCI)

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sbir.nih.gov

Congressionally-Mandated Programs

2.8%

0.4%

Set Aside (FY14) (FY15)

~$763M annually at NIH~$120M annually at NCI

Small Business Innovation Research (SBIR)Set-aside program for small business concerns to engage in

Federal R&D with the potential for commercialization Federal agencies with an extramural R&D budget > $100M

Small Business Technology Transfer (STTR)Set-aside program to facilitate cooperative R&D between small

business concerns and U.S. research institutions with the potential for commercialization Federal agencies with an extramural R&D budget > $1B

2.9%

0.4%

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NIH = 27 Institutes & Centers23 Participate in the SBIR/STTR Program

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The Office of the Director (OD)

National Instituteon Alcohol Abuse

& Alcoholism(NIAAA)

National Instituteof Arthritis &

Musculoskeletal &Skin Diseases (NIAMS)

National CancerInstitute (NCI)

National Instituteon Aging

(NIA)

National Instituteof Child Health &

Human Development(NICHD)

National Instituteof Allergy &

Infectious Diseases(NIAID)

National Instituteof Diabetes &

Digestive & KidneyDiseases (NIDDK)

National Instituteof Dental andCraniofacial

Research (NIDCR)

National Instituteon Drug Abuse

(NIDA)

National Instituteof Environmental Health Sciences

(NIEHS)

National Institute onDeafness & OtherCommunication

Disorders (NIDCD)

National EyeInstitute

(NEI)

National HumanGenome ResearchInstitute (NHGRI)

National Heart,Lung, & Blood

Institute (NHLBI)

National Instituteof Mental Health

(NIMH)

National Instituteof Neurological

Disorders &Stroke (NINDS)

National Instituteof General

Medical Sciences(NIGMS)

National Instituteof Nursing Research

(NINR)

No funding authority

National Institute on Minority Health &Health Disparities

(NIMHD)

National Libraryof Medicine (NLM)

National Centerfor Complementary

& AlternativeMedicine (NCCAM)

FogartyInternationalCenter (FIC)

National Instituteof Biomedical

Imaging & Bioengineering (NIBIB)

National Centerfor Advancing

Translational Sciences(NCATS)

Center for InformationTechnology (CIT)

Center for ScientificReview (CSR)

NIH ClinicalCenter (CC)

What is the NIH looking for?

• Innovative solution to significant unmet need

• Solution that has significant commercial potential

• Projects that leverage company/founder expertise

• Start-up company too early for private investment

• Established small business pursuing a new project

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Phase IIICOMMERCIALIZATION

Phase IIDEVELOPMENT

Phase IFEASIBILITY

Phase II •Research & Development•Commercialization plan required•$1-2 million•2 years

• Commercialization stage• Use of non-SBIR/STTR funds

Fast Track ApplicationCombined Phase I & IIFast Track ApplicationCombined Phase I & II

SBIR & STTR: Three-Phase Program

Phase I •Proof-of-Concept study•$150-300K•6-12 months

Direct to Phase II(Skip Phase I)

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NIH SBIR/STTR Resources

Discovery Manufacturing/Delivery

Product Design

Proof of Concept

Product Development

IdeaOperating

Capital

SeedFunding

Pre-seedFunding

Expansion/MezzanineStart-upFunding

SBIR Phase I SBIR Phase II NCISBIR Phase IIB Bridge Phase III

CROSSING THEVALLEY OF DEATH

Third-Party Funds

Founder

Friends & Family

Angels

Angel Groups

Seed Funds

Venture Funds

Institutional Equity

Loans/Bonds

Non-Federal Funds

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NIH SBIR/STTR Resources

Discovery Manufacturing/Delivery

Product Design

Proof of Concept

Product Development

IdeaOperating

Capital

SeedFunding

Pre-seedFunding

Expansion/MezzanineStart-upFunding

SBIR Phase I SBIR Phase II NCISBIR Phase IIB Bridge Phase III

CROSSING THEVALLEY OF DEATH

Third-Party Funds

Founder

Friends & Family

Angels

Angel Groups

Seed Funds

Venture Funds

Institutional Equity

Loans/Bonds

I-Corps @ NIH Non-Federal Funds

Pilot Program was developed specifically for NIH SBIR & STTR Phase I grantees

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I-Corps™ at NIH

•$25K administrative supplements to current SBIR/STTR Phase I grantees to support I-Corps™ training

•Three-member project teams

•Same fundamental curriculum that was pioneered at NSF

•A few programmatic adjustments to develop a format tailored for life science companies

Business Model Canvas

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“ Product-Market Fit ”

Hypotheses Testing and Insight…

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Customer Development

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SBIR/STTR Phase II grant applications have two components

1.The Research Strategy2.The Commercialization Plan

•Phase II applicants often focus on #1

•The strongest Phase II applications focus on both

I-Corps™ @NIH

Important goal of I-Corps™ at NIH is to inform the Commercialization Plan

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I-Corps participants gain new insights into:

• Value proposition (e.g., clinical utility)

• Customers / customer segments

• Aspects of the product that are (& are not) valuable

• Data & data quality that is needed

• Roles of partners and collaborators

I-Corps™ @NIH

We are also learning something else very important at the NIH…

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Science/Technology

Research Strategy(Grant Application)

Business Model

Commercialization Plan(Grant application)

I-Corps™ @NIH

Testing commercial hypotheses can dramatically affect the technical aims of a future Phase II SBIR

I-Corps™ @NIH - Format

I-Corps Node Instructor

THERAPEUTICS Expert

I-Corps Node Instructor

DIAGNOSTICS Expert

I-Corps Node Instructor

MED DEVICE Expert

4 x

3 x

4 x

1 x

3 x

3 x

1 x

• Three Tracks• Therapeutics, Diagnostics, Medical Devices

• Team Teaching• I-Corps (NSF) Node Instructor + Life Science Domain Expert• Special supplemental lectures tailored to life sciences

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THERAPEUTICS TRACK

DIAGNOSTICSTRACK

MEDICAL DEVICESTRACK

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•C-Level Corporate Officer•“Chief” Executive Officer (CEO), “Chief” Operating Officer (COO), etc.•Relevant knowledge of the technology•Deep commitment to investigate the commercial landscape•Substantial decision-making authority within the company

•Industry Expert•Experience in translating technologies to the marketplace•Can be someone that has an established relationship with the company OR someone selected as a third-party resource

•PD/PI•PD/PI on the SBIR/STTR Phase I award

Three-Member Teams

From I-Corps™ at NIH

Pilot Program Summary•19 teams conducted 2,128 customer discovery interviews•82% found the program “very good” or “excellent”•82% would recommend I-Corps™ at NIH to other companies•All made possible with significant planning and financial support from NSF

“After going through I-Corps we understand we have to focus on a small subset [of customers] and prioritize segments based on their value propositions.”

“We clarified the value propositions, who our target customers would be, revenue streams, customer relationships…”

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Innovation Corps (I-Corps) at NIH:Hypothesis-Driven Customer Discovery

for SBIR/STTR Grantees

Bench 2 Business (B2B) – University of KentuckyMay 19, 2015

Andrew J. KurtzNational Cancer Institute (NCI)