Nearly 3,000 small biotechnology companies have been awarded a total of $1 billion in government tax credits and grants to help speed the development of promising new therapies, create jobs and maintain U.S. leadership in biotechnology innovation.

The Qualifying Therapeutic Discovery Project (QTDP) program, created by Congress as part of the healthcare reform legislation enacted last March, made funding available for biotechnology companies with fewer than 250 employees to hire more staff, improve facilities and move forward with promising research projects that might otherwise have been put on hold.

Biotechnology Industry Organization (BIO) President and CEO Jim Greenwood said the QTDP program provides a “critical lifeline” for small biotechnology companies, since access to private capital for the industry has declined. During the past three years, BIO estimates the number of public U.S. biotechnology companies has shrunk by a third. “Hundreds of small biotech companies across our nation now will begin to realize the benefits of this critical program,” said Greenwood. “These companies, which had been faced with the heartbreaking choice of shuttering promising new research for diseases such as Alzheimer’s, HIV/AIDS, Parkinson’s and multiple sclerosis will now be able to continue their work and maintain—even expand—their workforces.”

In addition, leading executives say the awards increase the likelihood that biotechnology companies will keep their operations in the U.S. In a recent BIO survey of small biotechnology companies, more than half of the CEOs reported that they have been approached by other countries to move some or all of their operations to foreign competitors, including China and India. However, the survey also showed these CEOs expect the QTDP awards to have a positive impact on their ability to keep their companies’ operations in the U.S. Specifically, two-thirds of those surveyed said the chance to apply for the program made them more likely to keep their companies’ operations in the U.S.

According to the BIO survey results, 67% of industry leaders believe that the QTDP tax credit or grant would allow their companies to create more jobs and hire additional employees. An additional 30% said the funds will make it possible for them to maintain current employment levels, which would not otherwise be possible.

The QTDP program is designed to fund projects that show potential to produce new therapies, reduce long-term healthcare costs or significantly advance the goal of curing cancer within the next 30 years. In addition, preference was given to projects that show the greatest potential to create and sustain high-paying jobs in the U.S. The QTDP tax credit covers up to 50% of the cost of qualifying biomedical research; firms can opt to receive a grant instead of a tax credit to allow start-ups that are not yet profitable to benefit from the program. In all, 4,606 applications from nearly 3,000 companies were awarded funding.

Awards were given for projects ranging from an arthritis treatment derived from plant sources to next-generation stem cell technologies for drug development and personalized medicine applications. Awards for promising cancer research included a $244,000 grant to Oregon-based MitoSciences to support development of a set of assays for unlocking the role of metabolism in cancer and other critical diseases. Northwest Biotherapeutics of Bethesda, Md., received about $490,000 in two grants for developing immunotherapy products that could treat cancers without toxicities of the kind associated with chemotherapies.

Several biotechnology companies also received awards to support vaccine development. Canada-based Medicago, for example, which focuses on developing vaccines based on proprietary manufacturing technologies, received $244,000 in funding to help the company develop its U.S. vaccine facility.

The grant applications were first reviewed by the U.S. Treasury Department and then were independently reviewed and evaluated by the Department of Health and Human Services.

 --Karyn Korieth