In 1997, Dr. Anne S. De Groot founded EpiVax Inc. in Providence, backed by a Small Business Innovation Research grant from the National Institutes of Health and a little state funding.
Two decades later, De Groot is as an internationally lauded researcher and a respected leader in the local biotech and academic scene. And EpiVax has carved out a niche in biotech and immunoinformatics, built on the company’s innovative tools and discoveries. Well-situated on a trajectory De Groot described as “upward and stable,” EpiVax is now gearing up to launch a venture-backed spinoff called EpiVax Oncology.
De Groot discusses plans to grow the new business and the challenges in building a diverse workforce.
What exactly is EpiVax Oncology?
EpiVax is not a venture-backed startup, but this will be venture backed. We’re generating enough profit that we can seed-fund [the new] company. When we started EpiVax, we always wanted to design vaccines, and now we’re going to be making personalized cancer vaccines.
That means if you have a tumor, I sequence your tumor, I run that analysis through my immunoinformatics tools, I come up with a design for you that’s based on your tumor that’s different from any vaccine that I would make for anybody else. That’s all possible now with fast sequencing and the tools we’ve built over the last 20 years. So, we are on the cusp of basically starting a company that could help every cancer patient with a vaccine that’s designed specifically for them.
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SUCCESSFUL GROWTH: Dr. Anne S. De Groot, CEO and chief strategy officer of EpiVax Inc., and William Martin, EpiVax chief information officer and chief operating officer, represent two of the three-member EpiVax management team. De Groot says the company does not have a board, but rather she, Martin and Clifford Grimm, managing director, make all of the decisions, a model that has seen the company grow by 30 percent each year. / PBN PHOTO/MICHAEL SALERNO[/caption]
Are any other companies making personalized vaccines?
There’s a company in Boston called Neon Therapeutics that’s doing it. There’s a company called Gritstone Oncology that’s doing it. Some of these companies could be valued at $150 million with barely any clinical data. And all of these companies starting out as small, academic-based companies are being bought by larger companies [such as] Merck & Co. So, I would say there’s potential for us to sell as well, and that’s why we’re starting it as a venture company rather than as any other kind of startup.
As for EpiVax itself, it’s going to remain as it is?
Yes. We’re happy with the way the company is. Bill [Martin] and Cliff Grimm and I run the company. It’s really a three-person management team. We don’t have a board; we make all of our own decisions. If we think something is interesting, we pursue it. If we want to spend money on something, we do; if we don’t, we don’t. Nobody tells us what to do. It’s very difficult to knock that model. … We’re growing by 30 percent per year, something like that.
Do you have any expectations about EpiVax Oncology’s success?
I think we’re going to be looking for $25 million [from investors] to start out, Series A, and then we’ll go higher. The Series A should be this year and the Series B should be sometime in the next 24 months.
We tried to do that with EpiVax 20 years ago but it just wasn’t the right time. Vaccines weren’t appreciated the way that they are now, so it just never happened that way.
EpiVax Oncology will be in startup mode, and we’ll get a return on investment or it’ll fail. But either way I’m OK with it because we’ll just reabsorb that technology back into EpiVax and sell it as a commercial service. So, there’s no downside to EpiVax Oncology.
Could a small, individual investor invest in EpiVax Oncology?
I would say, yeah, I would invest. I mean, I am investing, we’re investing. We’re in for about $200,000 right now. Follow EpiVax Oncology on Google, and you’ll see when we have our IPO, probably not before 2019.
Gad Berdugo has joined as the CEO of EpiVax Oncology, and he has a lot of experience in startup funding. EpiVax Oncology will probably start with a CEO, maybe an administrator, but we’ll leverage people that we have here. The tool will move to EpiVax Oncology but the people running the tool will be here. Depending on where the funding comes from, that company could end up living in New York or Providence or California.
EpiVax also recently sold its first commercial license for the Tregitope platform, correct?
And another one coming up, we hope.
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PBN FILE PHOTO/MICHAEL PERSSON[/caption]
You’re seeking more partners on that front as well?
We are. Tregitope is a technology that can be applied kind of like peanut butter to a lot of different things. It basically reduces inflammation, so you could use it for arthritis – that could be one application, so we sell that to one company. It can be used for skin disease, it can be used for transplantation, it can be used for allergy treatment.
We’re cutting off small parts of the technology to sell to companies for different applications. The first one was to a large company that signed a commercial license in December or January … and we’re talking to a lot of other companies about it. So, it’s something that we continue to invest in internally in terms of research and development, and then license out.
What other commercial revenue sources does EpiVax have?
There’s also something we discovered in 2013 called JanusMatrix, which looks at – are there sequences in pathogens that resemble sequences in the human genome, and if they’re there, why are they there, and do they allow the pathogens to camouflage themselves?
Because if your immune system is looking at the pathogen and it sees something that looks like itself, it won’t attack it. So, we developed a tool to find those sequences, these camouflage-like sequences, and we found if we take them out of vaccine proteins, the vaccines get better.
We have one vaccine in a clinical trial right now, and that’s the H7N9 flu vaccine that we’ve been talking about for ages. But the technology that we applied to H7N9 can be applied to other pathogens for which there are vaccines that don’t work well. Take HIV for example, or hepatitis C, or tuberculosis. There are all these pathogens that have successfully hidden from immune response by integrating human-like sequences into their own genomes.
So that is a fundamental discovery that we made in 2013 that now allows us to engineer better vaccines … and that can be a service, or we can license an entire portfolio of vaccines out.
All of a sudden, people are understanding the importance of immunoengineering.
Is that something you’re planning to do soon?
We’ve been talking to people about it. There’s a lot of interest. All of a sudden, people are understanding the importance of immunoengineering, which is a concept that originated here. That’s taking protein engineering, which has been applied to biologics, and applying it to vaccines.
We can basically license out a portfolio – we could sell a license to our flu vaccine or our Ebola vaccine, the ones we’ve improved. Or a company might come to us and say, “We have something in the clinic. We want to make it slightly better with your technology. So, can you redesign it for us and we’ll take it from there?” So that would be a service and we’d probably take a royalty from that.
On the infectious-disease side, we’re fixing vaccines that already exist, and on the cancer side, at EpiVax Oncology, we’re applying that to the cancer technology to make better vaccines against cancer as well.
Do you think EpiVax’s successes and discoveries would’ve been possible without the level of federal funding that you’ve had?
No. There were years when we had no funding except federal funding. And over the years, all of the R&D has been done with NIH funds.
I don’t remember how much we’ve had, but we’ve been the beneficiary of many SBIR grants, which have funded the preliminary research on lots of different programs. There are cycles, so there was a boost in SBIR funding right after 9/11, which we benefited from. We did a lot of vaccine development at that time for biodefense – we’re still in that space. And then there’s kind of this recession period where there’s no more money and people flee science and young scientists aren’t getting funded.
We’re now in a kind of upswing, so we’re getting more funding, and the concern that the NIH has – there are two areas of concern, there are certain labs that have become grant machines. … So, there are these kind of “silos” and they’re trying to take those apart now.
They’re also trying to fund newer investigators to try to get people back, but it may be too late. That’s what I’m concerned about, that a lot of people who were going into science have left and are no longer doing it because there were no careers for a while. If you had your Ph.D., you were driving a taxi. I mean, it’s been really bad.
If you had your Ph.D., you were driving a taxi. I mean, it’s been really bad.
But you think it’s on an upswing now?
I think funding is coming back. We’ll see. We have a new administration that doesn’t seem to be very supportive of science, to say the least, that wants to cut money from the NIH, which is the engine of the biotech economy. I mean, that is ridiculous. … You want to create jobs and good jobs? Then invest in the NIH.
Our funding has been, over the years, probably 50 percent grant-funded and 50 percent contracts and services. The grants fund basic R&D and they barely cover those costs. The money that we get that allows us to reinvest in the company and spinouts comes from contracts and services, and that’s been very successful. It’s mainly immunoinformatics, some lab services. And what we’ve done there is we’ve basically created tools, we sell access to those tools but we also use them for our own purposes. So that’s really been driving the company for a while.
How do you think potential federal funding cuts could affect Rhode Island?
In terms of the funding for research, I think it’s clearly an issue, but I think the constituencies involved in research funding are a lot more vocal and so that won’t happen. That’s my bet.
But meanwhile, they’re going to decimate community-level funding, [such as] the Community Development Block Grants. They’re going to take away the safety net. They don’t care about poor people. And those are the people in this state who are motivated to get into scientific careers, for example. It’s a mistake not to support those people – I’m talking specifically about immigrants, refugees, people who are transitioning from poverty and actually getting an education and getting into technical jobs.
We need those people. We can’t hire people in this company. It’s very, very difficult to hire entry-level people who have the skills we need. We’re hiring. If you look at the website, we have three or four jobs that are open right now.
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GEARING UP: Dr. Anne S. De Groot is CEO and chief strategy officer of EpiVax Inc., a biotechnology and immunology company in Providence that is gearing up to launch venture-backed startup EpiVax Ongology to make personalized cancer vaccines. She says the startup will be looking for $25 million from investors in Series A funding this year. / PBN PHOTO/MICHAEL SALERNO[/caption]
Would you say federal funding levels, or being unable to fill jobs is a bigger problem for EpiVax?
For EpiVax in particular, I don’t think federal funding is a major issue right now because we’re doing well on the commercial-contract front. We sell access to our tools to nine of the 12 biggest pharma companies globally, so commercially we’re doing very well.
I’d say the skills gap in Rhode Island is a big issue, and the governor’s working on that. And I want to push here for her initiative to have free college for Rhode Island residents. That’s what we should be doing. If we want to promote better jobs for Rhode Island, we should get people trained. They want to go to college, let’s help them. You’d be crazy not to invest in your youth.
It’s not one person here that makes the discoveries, it’s the mix. And that’s why it’s so important to have people who have a business background, people who have an immunology background, people who have an IT background. You have to have all of those people at the table, whether they’re white, black, Asian, Latino, female, male, gay, straight – they all have to be at the table to make the science happen.
There’s been a spotlight in the media on the issue of diversity in the tech industry. How does EpiVax address the issue?
At EpiVax we’ve been very supportive of women in the company. I think we have 50 percent women, and we are working on diversity. I would say we haven’t solved that issue yet and it’s really about what we’re getting given to work with. The people who want to work in Rhode Island, the people who are trained in the fields we need them to be trained in aren’t necessarily people of color or people of different ethnicities. That has a lot to say about the way the academic institutions work as well, and whether people of color have access to college and professional training, and that’s a huge problem.
So, while gender is improving, EpiVax as a company [and] biotechnology and technology in general are lagging behind in terms of ethnic and racial balance.
Is that a result of having specific policies in place or is it more of an attitude?
I think it’s an attitude. We give a lot of consideration to whether a person that’s applying for a job is a member of a race or an ethnic minority that’s underrepresented in our company, and that does factor into the decision because we do want diversity. But it’s tech, so people who work here already have an advanced degree. So, it’s not like we’re hiring people straight out of Olneyville – it’d be great if we could, but people have to get an advanced degree before they come work with us.
Now, we’re not a 300-person company, so we don’t have all perspectives represented here, but … I think having people who are of different persuasions in the office makes people more aware of the need to be open to people who have different perspectives. … You achieve an awareness of “otherness” that makes people who are other more comfortable.
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NO DOWNSIDE: Dr. Anne S. De Groot, CEO and chief strategy officer for Providence-based EpiVax Inc., is preparing to launch venture-backed startup EpiVax Oncology to make personalized cancer vaccines. She says if the startup fails, EpiVax will reabsorb the technology and sell it as a commercial service. / PBN PHOTO/MICHAEL SALERNO[/caption]
How do you see the tech industry’s issue with diversity reflected in Rhode Island and the regional community?
Diversity and lack of representation and lack of pay equity. I mean, there’s documentation that is quite evident with no change in sight in terms of people’s income, and that’s been going on for years.
In academics, I can say that it’s absolutely certain that the people who run academic institutions are primarily male … and women aren’t paid the same in academic institutions as men. Women aren’t offered the same opportunities for promotion as men. There’s a whole study on startup packages, just looking at the difference in the value. Women might get $100,000 and men might get $600,000 at a startup, and I can tell you that’s basically the same thing that happened to me.
I’ve worked at Brown University, I’ve worked at the University of Rhode Island, I’ve worked at Tufts Medical Center, and I was also at the NIH, and I can say – I’m not going to specify in which setting – there was sexual harassment. I experienced sexual harassment like many women in tech, and I don’t think that’s unique to any industry. I think it happens to every woman at some point in her career.
Do you see the attention on this issue in the industry effecting change or is it just a lot of talk?
Sure. I mean the CEO of Uber [Travis Kalanick] got kicked out, that’s positive change. [Justin Caldbeck], who was harassing women in Silicon Valley, got kicked out of his venture firm, so I would say absolutely.
