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Tennessee’s strategic investment in SBIR/STTR yields results

State initiatives take Tennessee to №8 nationwide for the National Institutes of Health SBIR/STTR application success rate. Why is our state performing so well?

For PreTel Health, the fourth time was a charm.

After submitting three applications to the National Institutes of Health for Small Business Innovation Research/Small Business Technology Transfer awards, the company sought and received a Commercialization Microgrant from LaunchTN. The funds enabled the Chattanooga-based firm to hire a professional writer to prepare its application — and earn an SBIR/STTR award.

PreTel is one of more than a dozen Tennessee startups and small businesses granted an NIH SBIR/STTR award in 2019. In fact, our state’s application success rate of 28.6% surpassed the national average of 21.8% — and, notably, propelled Tennessee to №8 nationwide in terms of the number of awards per number of applications submitted to NIH.

Why is Tennessee performing so well? A key reason is our state’s forward-thinking investment in SBIR/STTR initiatives.

Leveraging federal dollars for Tennessee value

Since 2017, LaunchTN has administered two SBIR/STTR-focused programs:

Our Microgrants Initiative yielded a success rate of 46% for last year’s NIH applicants. That means nearly half of all companies that used a LaunchTN microgrant-funded professional writer were successful in their bid for an SBIR/STTR award. That’s more than double the national average for 2019, and far greater than the win rate for Tennessee applicants overall.

Thanks in part to the microgrant, PreTel Health earned two NIH SBIR/STTR awards for development of its primary perinatal monitoring and decision-support solutions. The company also received a LaunchTN SBIR/STTR Matching Fund award.

“The matching grant from LaunchTN allowed us to further develop the company,” said PreTel CEO Marc Finch. “The NIH grant process is specific to a well-defined clinical development objective — meaning that you can use the grant only for that objective. With the matching grant, we’ve been able to focus on internal resources and to seek partners and investors. It’s been instrumental in driving growth.”

The LaunchTN SBIR/STTR Matching Fund was equally vital for Decode Health, a Nashville-based analytics firm focused on specialty care management initiatives.

“We were able to bring additional staffing and tech resources into the company, which allowed us to move beyond the core concepts of our federally funded research program and test new ideas quickly,” said Decode Health CEO Chase Spurlock. “In our company, we find that the services created using these technologies are now poised for the greatest growth.”

“Of particular interest,” Spurlock added, “our data framework is now being leveraged to predict and monitor COVID-19 risk throughout the United States and across communities in Tennessee.”

Creating a virtuous cycle of innovation

To be sure, Tennessee still has room to grow in terms of the absolute number of SBIR/STTR awards and real dollars granted. This spring, in fact, funding for the LaunchTN SBIR/STTR Matching Fund was eliminated from the state budget in order to accommodate shifting needs created by the pandemic.

But measuring efficiency and the relative success of Tennessee applicants, the numbers are undeniably strong. With a renewed commitment to supporting quality SBIR/STTR companies, we’ll see an even greater return in the form of federal dollars — and new businesses — coming to our state.

“The talent attracted at major research centers including Vanderbilt, Oak Ridge National Laboratory, and The University of Tennessee,” said Decode Health’s Spurlock, “combined with a culture of healthcare innovation and entrepreneurship fostered by organizations like Launch TN, Life Science Tennessee, and others, has fueled new venture creation and the types of translational activities and industry relationships that lead to competitive grant applications and successful project outcomes.”

And that delivers significant benefits for all Tennesseans, drawing new generations of research entrepreneurs to Tennessee and creating a cycle of innovation that will continue to yield meaningful results far into the future.