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The biotechnology industry’s recent full-court press to let firms owned by venture capitalists qualify for federal small-business grants has found an ally in Dr. Elias Zerhouni, head of the National Institutes of Health. The NIH doles out about $600 million annually under the Small Business Innovation Research program, which is overseen by the Small Business Administration. Nine other agencies award another $1.4 billion combined. Most of the NIH awards go to small biotechnology companies. But under a 2003 ruling by an SBA judge, companies controlled by venture capital firms are disqualified. Thus, many biotech companies cannot get grants because they tend to be majority owned by such venture capital firms. “NIH must turn away many deserving applicants,” Zerhouni wrote in a June 28 letter to Hector Barreto, head of the Small Business Administration. The letter was made public Wednesday by the Biotechnology Industry Organization, the Washington, D.C.-based trade group that has made the issue one of its chief lobbying priorities this summer. Bills pending on Congress would change the SBA’s funding policy so venture capital-owned biotechnology companies could qualify. The SBA said its reviewing it policy, but doesn’t expect to take action, if any, until the end of the year. Copyright 2005 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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