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Frequently Asked Questions (FAQ) - SME-Instrument

Question details: 
Currently we are interested in the Health topic of the SME Instrument. The question we have is that according to the Proposal Template for Phase 2 the core activities of the project cannot be subcontracted. As in PHC12 the core activity is the clinical validation of biomarkers and/or diagnostic devices, does this means that we cannot subcontract the services of a CRO and/or a hospital? Will we have to hire our own doctors and recruit patients? We don't have the intention of becoming a CRO, we just want to commercially exploit our devices.
Answer: 

As opposed to other instruments, the SME instrument (Phase 2) does not have any restrictions when it comes to subcontracting of tasks; see article 13 (p. 370):

[…]
The rules on subcontracting for SME Instrument Ph2 actions are similar to those of the General MGA (see Article 13 General MGA).
However, subcontracting is not restricted to a limited part of the action.
[…]

This means that the participating SMEs can subcontract the services of a CRO and/or a hospital without a problem.

Answer: 

As phase 1 and phase 2 will be considered as different projects, and for different steps in the innovation cycle you might need different partners, yes you can change partners.

Question details: 
Also in which phase should research organisations appear, already in phase 1 or in phase 2, where the RTD activity is conducted?
Answer: 

Research organisations can only be subcontractors, this is possible in both phases (depending on the topic); it depends on the applicants - what they intend to do during the phase 1 or phase 2, and for which kind of activities they ask for funding.

Answer: 

No problem from where your consortia partners are coming from, provided that the SMEs are established in a EU-member state or associated country; SMEs can be from the same country - but make sure that you can show that the business idea will be disseminated Europe-wide esp. internationally (which might be easier with partners from different member states).

Answer: 

As long as your company has an application for phase 1 or 2 open, OR has a phase 1 or 2 project running, you cannot apply again. For phase 3 application which is not yet possible, we do not know.

Answer: 

As subcontractor that MIGHT be possible, but as PARTNER definitely NOT

Answer: 

The high growth potential is intended to help Europe achieve the EUROPE 2020 goals which is: jobs, jobs, jobs!

Answer: 

Innovation has many facets; important ones are of course SUCCESS. How many new products/ technologies have your company launched successfully in the past years, how many patents filed, etc.? If you can show this for past innovations, evaluators might trust you that with your new idea you will be successful again.

Answer: 

Those SMEs are legally not excluded, but the commission aims at SMEs with HIGH growth potential with at least European market potential; as a start-up or very small company this might be difficult to argue, but most important will be the POTENTIAL.

Answer: 

The Commission would like to give higher chances for phase 2 applicants, but of course this depends on the number of applicants. SMEs that have gone through phase 1 first MAY have some advantage when applying to phase 2 - as the Commission likes to have SME go through all the phases (make it properly).

Answer: 

A complementary funding is not excluded in the work programme.

Answer: 

The commission does not ask for financial details, so no hourly rate; just try to reach the 71,000 euro (of which the 70% will be reimbursed as the lump sum).

Answer: 

The 50.000 EUR can be used for any kind of activity (personnel costs, subcontracting, costs for patent search etc).

Answer: 

The lump sum will be paid in two portions - 40% with project start, the rest afterwards, at end of project. The projects that you might get financed as phase 1 and phase 2 are seen INDEPENDENTLY.

Answer: 

Pre-clinical studies would be TRL 3 (maybe even lower); for the commission, clinical studies phase I and II is still research (could be TRL 4); so far we have never received such a "translation" of TRLs into medical research but will push for it.

Answer: 

For the section 4 talking about the members of consortium, there is no page limit; but for sure you should not go too much into details - and only list experiences relevant for your proposal. Try to be precise and to the point.

Answer: 

Yes for the PHC topic, funding rate is 100%

Answer: 

No, the feasibility assessment in phase 1 is addressing activities like risk assessment, description of bottlenecks, market study, user involvement, IP regime, partner search etc. Clinical studies are activities planned in phase 2.

Answer: 

Please use the definitions as shown here (and please see also the corresponding literature)

A biomarker is a characteristic that is objectively measured and evaluated as an indicator of normal biologic processes, pathogenic processes, or pharmacologic responses to a therapeutic intervention (NHI Biomarkers Definitions Working Group; 2001)

A valid biomarker is defined as “a biomarker that is measured in an analytical test system with well-established performance characteristics and for which there is an established scientific framework or body of evidence that elucidates the physiologic, toxicological, pharmacologic, or clinical significance of the test results

(FDA. Guidance for industry - pharmacogenomic data submissions. 2005)

Answer: 

Yes. In principle you can directly apply for phase 2; this really depends on how far advanced you are with your market assessment/business plan (for phase 2 you really need some deep insight into your market and competitors!) At the end of phase 1, you will write a short final report. As summary of your findings, you will come up with a conclusion of your feasibility study.
This can be: yes it is feasible, but we need xyz budget for conducting this and this --> go and apply for phase 2; if you come to other conclusions (no freedom to operate; no market, market not attractive enough or too complicated,...) you will of course NOT continue the development and not apply for phase 2.

Answer: 

Any SME must be (re)checked, if it was not validated within the last two years.

Answer: 

During the submission process you can name up to 3 people (companies) you wish to exclude; honestly, I would also write it on the cover page of part B.

Answer: 

At least 2 evaluators are planned to evaluate a proposal.

Answer: 

The obtained results in phase 1 will be reported at the end of this phase, but not evaluated once again. However, those results are the basis for the application in phase 2 (and consequently will thus be evaluated when submitting a proposal for phase 2).

Answer: 

You have to provide a report at the end of the project. This will comprise a business innovation plan, recommendations for further, additional activities and your private financing needs as well

Answer: 

Business Coaches are selected from a pool that is offered by the EC. You will select one of them based on his/her expertise, as of course there are specialists in the particular fields that can assist you. Together with the coach you will work on a coaching plan for phase 1 and coaching will be important also to help you in preparing the application for phase 2. This procedure is intended to be accompanied by the Enterprise Europe Network (EEN).

Answer: 

The SME instrument is targeted at all types of innovative SMEs showing a strong ambition to develop, grow and internationalise. It provides staged support covering the whole innovation cycle in three phases complemented by a mentoring and coaching service. Transition from one phase to the next will be seamless provided the SME project proves to be worth further support in a further evaluation. Each phase is open to new entrants.

 

 

a)  SME instrument (phase 1)

Description: Feasibility study verifying the technological/practical as well as economic viability of an innovation idea/concept with considerable novelty to the industry sector in which it is presented (new products, processes, design, services and technologies or new market applications of existing technologies). The activities could, for example, comprise risk assessment, market study, user involvement, Intellectual Property management, innovation strategy development, partner search, feasibility of concept and the like to establish a solid high-potential innovation project aligned to the enterprise strategy and with a European dimension. Bottlenecks in the ability to increase profitability of the enterprise through innovation shall be detected and analysed during phase 1 and addressed during phase 2 to increase the return in investment in innovation activities.

Funding rate: Funding will be provided in the form of a lump sum of EUR 50,000 (70% funding rate).

b) SME instrument (phase 2)

Description: innovation projects that address a specific challenge and demonstrate high potential in terms of company competitiveness and growth underpinned by a strategic business plan. Activities should focus on innovation activities such as demonstration, testing, prototyping, piloting, scaling-up, miniaturisation, design, market replication and the like aiming to bring an innovation idea (product, process, service etc.) to industrial readiness and maturity for market introduction, but may also include some research. SMEs can subcontract or buy in work and knowledge that is essential for their innovation project in the spirit of the innovation voucher concept. Proposals should be based on a strategic business plan either developed through phase 1 or another means.

Funding rate: 70% [or in exceptional cases, where the research component is predominant, the reimbursement rate may be 100%, as specified in each topic].

c) SME instrument (phase 3)

Support to commercialisation promotes the wider implementation of innovative solutions and customers and supports financing of growth by facilitating access to public and private risk capital. This stage will not provide for direct funding, but SMEs can benefit from indirect support measures and services as well as access to the financial facilities supported under Horizon 2020.

d) Mentoring and coaching

Each beneficiary of the SME instrument will be offered business coaching support during Phase 1 (up to 3 coaching days) and Phase 2 (up to 12 coaching days) in addition to the grant offered. This support will be provided through the Enterprise Europe Network (EEN) and delivered by a group of qualified and experienced business coaches. The local EEN office will introduce the beneficiary to the coaching process and propose a selection of coaches from the database managed by the Commission for the beneficiary to choose from.  The objective is to accelerate the impact of the support provided through the SME instrument and to equip beneficiaries with the necessary skills, business processes and relevant competencies for long-term growth. Phase 3 does not include individual business coaching, but SME instrument participants will be able to count on continuing EEN support in linking to relevant support services within the Network, regionally or nationally.  It is important to note that the objective of coaching is not to support the company in project management or reporting obligations related to Horizon 2020 participation.