By James Netterwald, Ph.D.
Funding for scientific research nowadays is more competitive than ever. However, there are also more sources of funding now than ever before. The days of academic scientists receiving an NIH or NSF grant and then isolating themselves in their labs only to emerge with a scientific publication a few years later are over. For biotech and pharma companies, most of the funding for research used to come only from venture capitalists. Nowadays, it comes from both venture capitalists and from government grants.
Since 2001, one of the major government granting agencies has been the DoD, and with good reason: to protect its citizens and its soldiers from a biological attack. The DoD frequently funds projects that combat biological weapons through a specialized grant program known as DARPA, which stands for the Defense Advanced Research Projects Agency. Its mission is focused on identifying and advancing novel technologies to support defense of our nation’s military and civilian population.
One company that was recently awarded a DARPA grant is Pulmatrix (Lexington, MA). The company was awarded $5.7 million in September 2010 for its work on a broad spectrum anti-infective therapy that could be self-administered by a soldier in a theater of operations. In an interview with Life Science Leader magazine, Bob Connelly, CEO of Pulmatrix, reviewed the company’s strategy for obtaining the grant.
Going Beyond VC Funding
As a company, Pulmatrix has been around since 2004 and has spent most of that time developing therapies for prevention and treatment of respiratory infections and to reduce contagious pathogens. The company is applying this approach to COPD, asthma, and Cystic Fibrosis (CF), where respiratory infections are the main cause of acute exacerbations and lung function decline. While Pulmatrix’s business model relies mainly on venture capital investment ($45 million to date), the company supplements venture funding with nondilutive funding, which includes government or nonprofit grants instead of venture firms or other investors.
The company’s launch was actually initially funded with nondilutive funding, and the work that early grant supported led to the company receiving its first round of venture capital funding in 2006. Connelly says a key component to getting venture investment and partner interest as the company grows has been its success in winning government funding, because it is seen as a strong validation of the potential of the Pulmatrix approach. The grant funding received has been directed toward the development of the company’s iCALM (inhaled Cationic Airway Lining Modulators) technology. The grant further supports development of this technology, which could offer both biodefense and pandemic response strategies for the government, as well as commercially successful products for the company’s investors and partners in COPD, asthma, and CF.
Pulmatrix started its grant writing history in 2004 when it applied for a DoD grant to fund the ongoing development of iCALM. One purpose of the technology is to protect soldiers in a combat zone from airborne infections and biowarfare pathogens. The technology principle is that specific concentrations of cationic salts combined together in very specific ratios and delivered by a dry powder inhaler to the airway have broad-spectrum anti-infective and anti-inflammatory effects. The hope is that these novel dual-efficacies will protect soldiers and their caretakers against all airborne infections such as influenza, anthrax, and other potential airborne biological weapons, thus enabling the soldier to perform at a maximum level as they move from theater to theater.
Best Practices For Obtaining DARPA Grants
By 2009, Pulmatrix had made significant progress on the iCALM technology, successfully completing two Phase 1 safety trials with a liquid version of the product as proof of concept. But, the dry powder formulation, which was needed to be viable in the various indications and government applications, had not yet reached clinical trials. To achieve further development of the product, Pulmatrix needed more funding. So, the company developed a game plan for obtaining such funding. Its first step was to monitor agency media for funding opportunities. Pulmatrix had a very simple approach for determining its eligibility for funding. In those early stages of research into funding for defense-relevant protective technologies, Pulmatrix began to monitor the requests for proposals coming out of agencies concerned with homeland security such as the DoD, the DHS (Department of Homeland Security), and HHS (Health and Human Services).
Pulmatrix next researched the types of projects funded by DARPA and these other agencies looking for specific matches to its own research. After a brief search to identify funding opportunities, the company found that its iCALM technology development project matched DARPA’s funding objectives quite well. “In the case of DARPA, they are looking for a product that a soldier could carry in their pack or in their vest and, when needed, could pull out of their clothing and very easily self-administer,” says Connelly. “So, the key to what they’re trying to do there is to prevent the infection or lessen its severity to a point where the soldier has time to get to a care station. The other key for DARPA was broad spectrum efficacy — with a soldier in the field, they never know what they might face, so having a technology that provided protection against many pathogens that the soldier might inhale was key.”
While searching the DoD literature for a funding opportunity, Pulmatrix employed best practice number two: Its staff attended relevant, agency-hosted conferences where agencies like DoD gave seminars on their grant proposal process and listed topics for which they were requesting grant proposals. Pulmatrix then began to apply for a small handful of grants that were most relevant to its business goals and funding needs, including a grant proposal for NIAID, which the company was later awarded, that focused on how companies might use technology to combat influenza in a pandemic. In contrast to the NIAID grant proposal request, which was very focused on funding those technologies that combat a specific pathogen, the DARPA grant request was focused on funding the development of “broad countermeasures that can be easily used by a soldier and have multiple pathogen efficacy,” says Connelly.
The DARPA grant request was published in June 2009. The deadline for submitting the proposal was in September 2009. And, having written and submitted grant proposals before, Pulmatrix had the right experience to prepare the proposal quickly. Connelly explains that the proposal preparation process is quite time-consuming in that the writer must describe the technical aims in detail, explain and make the case for why its technology fits, give a very specific work plan to achieve the aims, and provide extensive financial analysis of the project. Pulmatrix devoted the efforts of nearly its entire staff, as well as that of a number of external consultants, to complete the grant proposal. It also reached out to other companies with track records of nondilutive funding success for advice and pointers, including Achaogen and Alnylam.
“To get a DARPA grant, you have to commit your best resources to it. Your best scientific minds have to be involved, both in terms of assessing what DARPA is looking for, making the connections to people that are in DARPA and/or connected to DARPA, and making the presentations to that group,” says Connelly. “There’s no way, at least in my experience, to pursue any kind of nondilutive funding like DARPA without committing significant and high-level resources to it.”
As mentioned earlier, Pulmatrix sought advice from external consultants with experience in preparing grant proposals for DARPA. For this purpose, Pulmatrix engaged Washington, D.C.-based consultants who provided insight on DARPA’s funding objectives and then reported back to Pulmatrix on how the company fit those objectives. Most of these consultants were either former employees of companies that had worked with the agencies of interest or were former employees of the agencies themselves. Consultants did not write the grant but helped to frame the argument in the grant proposal, as well as advised Pulmatrix on how to develop a budget for the project. The consultants were most helpful in enabling Pulmatrix to connect with and present their ideas to several agencies of interest. The company had introductions to various DoD parties through these consultants but actually made the connection to DARPA on their own — the company’s initial 2004 grant was cofunded by DoD and DHS — and this was a good lead-in to DARPA.
Receipt Of Award, Working With DARPA
Pulmatrix submitted the DARPA grant proposal on time. By April 2010, Pulmatrix received a notice that DARPA wanted to negotiate a contract. At that point, DARPA became more integrally involved in the planning of the iCALM project. They wanted greater detail in designing the plan to achieve the aims outlined in the grant proposal. “DARPA acted almost like a partner because success of this project was just as important to them as it is to us. It is very important to be in constant communication with your granting agency,” says Connelly. Some of the details requested by DARPA included: detailed budgets, labor rate, overhead, and detailed reporting structure between the agency and Pulmatrix. Once Pulmatrix provided this information to DARPA and a detailed financial plan was in place, it was awarded the contract. After receiving the grant in September 2010, Pulmatrix began working with DARPA’s science team to further hammer out and modify a detailed plan for reaching the next two years’ worth of technical milestones. Constant communication with the DARPA science team continues today and includes a biweekly conference call and monthly site visit, thus enabling the team to monitor and contribute to Pulmatrix’s progress.
“The overall final aim of this project is to have a dry powder formulation which is administered by an inhaler that is suitable to be scaled up for use in a war zone,” says Connelly. “We’re going to test the formulation in a number of preclinical models of infectious disease including H1N1 influenza, gram-negative bacterial infections, and so on. What we hope to demonstrate is this pathogen-agnostic feature of the product in specific models that have been agreed upon by DARPA.”
Devoting every resource to this project paid off for Pulmatrix when it received the DARPA grant. By the time the DARPA contract was awarded in September 2010, Pulmatrix had already made significant progress in developing the iCALM technology. Now that it has DARPA funding, iCALM technology is more likely to be used by live soldiers in the near future.