Oklahoma's fledgling biotechnology firms are hopeful they'll get a piece of $1 billion in funding, which was tucked into the health care reform bill to help small companies speed development of lifesaving therapies. Altheus Therapeutics Inc. and Selexys Pharmaceuticals Corp. among others plan to apply for the up to $5 million boosts — which will come in the form of tax credits on up to 50 percent of their qualifying investment costs in 2009 and 2010. For firms without enough taxable income, the U.S. Treasury will exchange credits for grants of equal dollars. "We welcome the opportunity to have more funds to hire needed staff and accelerate products to market,” said Justin Briggs, clinical and regulatory development manager for Altheus. Established in 2006, the firm, which employs five, is conducting clinical trials on enemas and other therapies to treat inflammatory bowel disease. More than 1 million people in the U.S. alone suffer from it, Briggs said. The new stimulus program was a nice surprise to Rick Alvarez, chief operating officer of 3-year-old Selexys, which is developing therapies to treat Crohn's disease and sickle cell anemia. "To have a potential 50 percent reimbursement on all costs, where a year ago there was no such thing, is pretty remarkable and hopeful,” Alvarez said. Selexys, which employs four, is conducting safety and toxicology trials on cynomolgus monkeys, treating them with an intravenous antibody that potentially prevents sickle cells from adhering to and occluding blood vessels. Researchers hope to start human clinical trials in the fourth quarter. Oklahoma City certified public accountant David Greenwell is working with Selexys and other clients to ensure applications are compliant. Funding is limited to firms with fewer than 250 employees and excludes all overhead costs, including facility costs, executive salaries and interest on loans. "The government wants funds to go directly toward research that, in the long run, could decrease the costs of health care,” Greenwell said. "We're helping our clients provide documentation that prove the costs are direct.” Also applicants can't claim costs already deducted through other government grants or programs. William Paiva, managing partner of the Oklahoma Life Science Fund, a venture capital company focused on state health care activities, looks forward to an infusion of funding for the state. During the recession of the past three to five years, it's been difficult to find investors for companies in the early stage of developing therapies like most of Oklahoma's biomedical firms, Paiva said. The larger venture capital funds on the east and west coasts, he said, have moved toward investing in firms conducting more later-stage research. Still, Paiva believes Oklahoma biomedical firms will be very competitive in vying for the new funding, noting $7 million plus in recent grants to Selexys. "There's some formula so that all the money doesn't flow to California and Massachusetts,” he said. The Department of Health and Human Services will evaluate each project's potential to meet development goals, create jobs and further America's competitiveness in the global biotechnology industry. In the United States, the industry employs 1.3 million workers.
How to apply→IRS form: Internal Revenue Service Form 8942 is not yet available, but will be released by June 21. →Deadline: July 21.
• Award notification: no later than Oct. 29.