Texas Cancer Agency Withdraws Pending Startup Funding Applications

7/2/13Follow @angelashah

The Cancer Prevention and Research Institute of Texas has dismissed five pending grant applications by companies seeking funding in light of CPRIT’s ongoing reorganization.

The move came days after Texas Gov. Rick Perry approved on June 15 a new law designed to reform  the embattled agency. CPRIT had come under legislative and legal scrutiny late last year following allegations of conflicts of interest and that grants were improperly awarded.

That, along with a moratorium on activities imposed by Perry in January, meant that many life sciences startups midway through the application process found their applications in limbo.

Now, their CEOs are looking at starting the entire funding process from scratch and wondering whether to take their ideas out of Texas. “CPRIT is unable to project when it will be able to move forward with commercialization recommendations, if any, from this review cycle,” according to a notice sent by CPRIT to companies on June 19.

“It is likely that by the time CPRIT is able to take action, the business and research plans submitted by you will be nearly two years old,” the letter states. “To be respectful of your options regarding the work proposed in this submission and to provide you with the best possible opportunity to receive CPRIT funding, CPRIT has decided to administratively withdraw your application from this review cycle.”

Walter Klemp, founder and CEO of Houston-based Moleculin, had applied for a $5 million grant to research a drug to fight cutaneous T-cell lymphoma, a deadly skin cancer, in March 2012. The money was meant to fund two clinical trials this year.

“The difficulty is that until they know when the next RFA [request for application] will be, it’s difficult to formulate a strategy from our perspective,” he says. “It could be a month from now or a year from now.”

If the process were to open up reasonably soon, Klemp says he would re-apply. In the meantime, Moleculin is retooling its funding efforts and shelving the project in the United States to look for funding opportunities in the European Union. “I live here; I’m a cheerleader for Texas,” he says. “But at some point if the bureaucracy fails, which it clearly has, we can’t let the project founder, so we’ll find other ways.”

Wayne Roberts, CPRIT’s interim executive director, said in an e-mail Monday evening that there are still seven companies with pending applications. These companies submitted their requests for funding in the August and November 2012 cycles, he said.

If companies resubmit an application, they would have to start the process over, a spokeswoman said on Tuesday. (In an interview with Xconomy last month, Roberts did say he would prefer that companies left in limbo would be able to resume the application process where they had left off.)

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Angela Shah is the editor of Xconomy Texas. She can be reached at ashah@xconomy.com or (214) 793-5763. Follow @angelashah

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