NIH awards $3.7M contract for toxicology studies to Arisan Therapeutics, a new entrant in federal contracting

Contract Overview

Contract Amount: $3,692,037 ($3.7M)

Contractor: Arisan Therapeutics Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2023-09-22

End Date: 2026-12-31

Contract Duration: 1,196 days

Daily Burn Rate: $3.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: TO CONDUCT NON-CLINICAL GOOD LABORATORY PRACTICE (GLP) IN VIVO GENOTOXICITY AND REPRODUCTIVE TOXICOLOGY AND GLP DEVELOPMENT AND REPRODUCTIVE (DART) TOXICOLOGY STUDIES.

Place of Performance

Location: CARLSBAD, SAN DIEGO County, CALIFORNIA, 92008

State: California Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $3.7 million to ARISAN THERAPEUTICS INC for work described as: TO CONDUCT NON-CLINICAL GOOD LABORATORY PRACTICE (GLP) IN VIVO GENOTOXICITY AND REPRODUCTIVE TOXICOLOGY AND GLP DEVELOPMENT AND REPRODUCTIVE (DART) TOXICOLOGY STUDIES. Key points: 1. Contract focuses on critical non-clinical toxicology studies for drug development. 2. Arisan Therapeutics, a relatively new entity, secured this award. 3. The contract duration of nearly four years suggests a significant, ongoing research need. 4. The award was made under full and open competition, indicating broad market access. 5. The use of a Cost Plus Fixed Fee (CPFF) pricing structure is common for R&D contracts. 6. NIH's investment supports the advancement of potential new therapies.

Value Assessment

Rating: fair

The contract value of $3.7 million over approximately four years appears reasonable for specialized toxicology research. Benchmarking against similar contracts for in vivo genotoxicity and reproductive toxicology studies is challenging without more specific service details. However, the Cost Plus Fixed Fee (CPFF) structure allows for flexibility in research scope while providing a defined profit margin for the contractor. The absence of prior federal contract history for Arisan Therapeutics makes a direct value comparison difficult, suggesting a need for close monitoring of performance and cost efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit offers. The solicitation resulted in seven bids, indicating a healthy level of interest and competition for this type of research service. The presence of multiple bidders generally supports price discovery and encourages competitive pricing, although the specific nature of specialized R&D can limit the pool of qualified offerors.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that aims to secure the best value for specialized research services, preventing potential overpricing and ensuring a wider range of qualified contractors can compete for federal dollars.

Public Impact

The primary beneficiaries are researchers and the public, through the advancement of potential new drug therapies. Services delivered include critical in vivo genotoxicity and reproductive toxicology studies. The geographic impact is primarily within California, where Arisan Therapeutics is located, but the research supports national health goals. Workforce implications include specialized scientific and technical roles within Arisan Therapeutics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited federal contracting history for Arisan Therapeutics may present initial performance risks.
The CPFF contract type requires careful monitoring to ensure costs remain within projected bounds and are reasonable.
Ensuring the quality and GLP compliance of the toxicology studies is paramount for regulatory acceptance.

Positive Signals

Awarded under full and open competition with multiple bidders suggests a competitive process.
The contract supports critical research areas for the National Institutes of Health.
The defined contract period and scope provide a clear framework for the research objectives.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on life sciences toxicology. The market for contract research organizations (CROs) providing GLP-compliant toxicology studies is substantial, driven by pharmaceutical and biotechnology companies seeking to advance drug candidates through regulatory approval. NIH's spending in this area is crucial for supporting early-stage research that private industry may not fully fund due to high risk and long development timelines. Comparable spending benchmarks are difficult to establish without detailed service scope, but R&D contracts of this nature often range from hundreds of thousands to several million dollars.

Small Business Impact

This contract was not set aside for small businesses, and Arisan Therapeutics' status as a small business is not explicitly indicated in the provided data. The contract's value and specialized nature suggest it may be beyond the typical scope for many small businesses unless they possess highly specialized expertise. There is no immediate indication of subcontracting requirements for small businesses, but this could be a factor in future performance monitoring.

Oversight & Accountability

Oversight for this contract will be primarily managed by the National Institutes of Health (NIH), likely through designated contracting officers and technical monitors. The Cost Plus Fixed Fee (CPFF) structure necessitates diligent review of incurred costs and contractor performance to ensure adherence to the contract's objectives and budget. Transparency is facilitated through federal contract databases, and while specific Inspector General (IG) jurisdiction isn't detailed here, the NIH IG would have oversight authority over potential fraud, waste, or abuse.

Related Government Programs

NIH Research and Development Contracts
Toxicology and Safety Testing Services
Drug Discovery and Development Support
Biotechnology Research Grants
Life Sciences Research Services

Risk Flags

Contractor Performance Risk (New Entrant)
Cost Reasonableness Oversight (CPFF Structure)
GLP Compliance Assurance
Data Integrity and Quality Control

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $3.7 million to ARISAN THERAPEUTICS INC. TO CONDUCT NON-CLINICAL GOOD LABORATORY PRACTICE (GLP) IN VIVO GENOTOXICITY AND REPRODUCTIVE TOXICOLOGY AND GLP DEVELOPMENT AND REPRODUCTIVE (DART) TOXICOLOGY STUDIES.

Who is the contractor on this award?

The obligated recipient is ARISAN THERAPEUTICS INC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $3.7 million.

What is the period of performance?

Start: 2023-09-22. End: 2026-12-31.

What is Arisan Therapeutics' prior experience with federal contracts, particularly for toxicology studies?

Based on the provided data, Arisan Therapeutics Inc. appears to be a new entrant into the federal contracting space, as there is no readily available history of prior federal awards for this entity. This lack of established track record necessitates careful monitoring by the awarding agency (NIH) to ensure performance, quality, and adherence to Good Laboratory Practice (GLP) standards. While new contractors can bring innovation, it also introduces a degree of uncertainty regarding their ability to navigate federal procurement regulations and deliver complex research services on time and within budget. The agency will likely rely heavily on the contract's performance metrics and reporting requirements to manage this risk.

How does the $3.7 million contract value compare to similar toxicology study contracts awarded by NIH or other agencies?

Directly comparing the $3.7 million contract value is challenging without a precise breakdown of the specific toxicology studies (e.g., duration, species, endpoints) and their scope. However, contracts for GLP-compliant in vivo toxicology studies, especially those involving reproductive and genotoxicity assessments, can range significantly. For complex, multi-year studies supporting drug development, values in the high six figures to several million dollars are not uncommon. Given the nearly four-year duration (1196 days) and the involvement of multiple study types, the $3.7 million figure appears within a plausible range for specialized R&D services. A more granular comparison would require access to detailed contract databases and specific service descriptions.

What are the key performance indicators (KPIs) and risk mitigation strategies for this contract?

Key performance indicators for this contract would likely include the timely completion of study milestones, adherence to Good Laboratory Practice (GLP) regulations, the quality and integrity of the data generated, and accurate financial reporting. Risk mitigation strategies employed by NIH would involve rigorous oversight by contracting officers and technical monitors, regular progress reviews, clear communication channels with Arisan Therapeutics, and potentially performance bonds or other financial assurances if deemed necessary. Given Arisan's limited federal contracting history, NIH might implement more frequent reporting requirements and closer monitoring of expenditures and progress in the initial phases of the contract to proactively identify and address any emerging issues.

What is the significance of using a Cost Plus Fixed Fee (CPFF) pricing structure for this type of research?

The Cost Plus Fixed Fee (CPFF) pricing structure is commonly used for research and development contracts where the scope of work may evolve or is not precisely defined at the outset. In this case, it allows NIH to fund the necessary research activities while providing Arisan Therapeutics with a predetermined fixed fee (profit) upon successful completion of the contract. This structure incentivizes the contractor to control costs, as any savings below the estimated cost do not increase their fee, and overruns do not increase it either. For NIH, it offers flexibility to adapt research directions as findings emerge, but it requires robust oversight to ensure costs are reasonable and allocable to the contract.

How does this contract align with NIH's broader mission and strategic research priorities?

This contract directly aligns with the National Institutes of Health's (NIH) core mission to seek fundamental knowledge about the nature and behavior of living systems and the application of that knowledge to extend healthy life and lessen the burdens of disease. Conducting GLP-compliant toxicology studies is a critical step in the preclinical evaluation of potential therapeutics, ensuring safety before human trials can commence. By funding these studies, NIH supports the pipeline of innovative biomedical research, potentially leading to new treatments for a wide range of diseases. This investment is crucial for advancing scientific understanding and translating discoveries into tangible health benefits for the public.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › N – Health R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HHS-NIH-NIAID-BAA2023-01

Offers Received: 7

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 5825 AVENIDA ENCINAS, CARLSBAD, CA, 92008

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $3,692,037

Exercised Options: $3,692,037

Current Obligation: $3,692,037

Actual Outlays: $3,132,288

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline