In this series, we talk with Maryland biotech industry executives about their business, and what it takes to be a successful entrepreneur.
Chief executive: Dr. M. Javad Aman, President and CSO, Integrated BioTherapeutics, Inc. (IBT)
Location: Gaithersburg, MD
Started in: 2005
- R&D pipeline lead candidate: Staphylococcal enterotoxin B (SEB) vaccine
- R&D services: early research to support infectious disease vaccines and therapeutics (e.g., in vitro screening assay development, in vivo disease models/testing, immunogenicity and serology testing)
Customers: Pharma and biotech companies, government agencies, universities
Revenue: privately held
Funding: Product R&D is government-funded (NIH and DoD); bioservices division is profitable, and contributes funding to the product side
IBT started in Frederick when you were working at USAMRIID. Did you ever consider locating anywhere else?
The company was a spin-off from the U.S. Army Medical Research Institute of Infectious Diseases (USAMRIID), where I worked with Dr. Kelly Warfield, IBT’s VP of vaccine development. We started in the Frederick incubator (FITCI), graduated after two years and moved down to Germantown, then Gaithersburg. It was very natural for us to stay in Maryland, with the scientific environment here: NIH, FDA, and lots of biotech companies.
You have two business lines: an R&D pipeline, and bioservices. Can you tell us more about that?
This approach is very common in Europe. A company explores some products as a strategic goal, and offers services that keep the business running. Right now, our business is about 50% services. That area has grown recently, as some of our development work has come to an inflection point, where development slows down as we consider the future path. We’re at about a 50/50 split for budget and effort.
How do you fund your R&D?
Our R&D is all government-funded. We do supplement R&D with revenues from our services department, which is already profitable.
That seems like a smart business model. Why don’t more companies follow this approach?
It has its challenges; this model dilutes your attention. We’ve been able to keep the company 100% undiluted in terms of equity, which is a good thing. But we’ve had to have a “dual life.” Each side of the business has its own challenges. It’s not an easy model, but our experience says it’s do-able. One thing we do to keep it viable is keep the two sides integrated. We don’t just develop service capabilities to market; we are opportunistic about that. When capabilities are required for our internal R&D, we try to transition those to the services side. Likewise, if a new capability is developed on the bioservices side, we look at possible synergies on the R&D side.
That approach requires a focus on strategy. As a scientist, did that come naturally for you?
No. “You need to suppress your scientific enthusiasm sometimes to focus on the business strategy.” We learned by making mistakes. We do have some advisors too. When your livelihood depends on it, you learn.
How did you get start-up funding?
We started with grants from the state, NIH and DoD. From the State of Maryland, “We got almost every grant they had.” Those small grants (TEDCO, MIPS, etc.) got the company started. (Editor’s note: check out the Maryland Biotechnology Center’s Access to Capital page for links to more funding sources.)
Tell us a little about your partnering strategy. What are you looking for?
We used those grant studies to generate proof-of-concept data that shows our vaccine is the right approach. We are using this data to find a larger company that can support going into human clinical trials. It is our hope that a company with significant experience in microbial vaccines will be sufficiently interested that they will consider a license or a collaborative research agreement. The milestone payments and royalties generated from these agreements will help keep our products moving forward. On the services side, we would consider spinning off the already profitable division to an investor if they were willing to take over and invest in its growth.
Congratulations on getting your SEB vaccine into clinical trials. Can you tell us about being first in humans?
No vaccine has ever been tested in humans against the SEB group of toxins, to which SEB belongs. So this is the first vaccine candidate for SEB, as well as superantigens. Pathogens generally stimulate a normal and often protective immune response. Superantigens bypass the normal immune response and cause a massive, overwhelming activation of the immune system. For example, an influenza antigen might stimulate a response from 0.2% of your immune cells, whereas a superantigen would stimulate about 30% of your immune cells. You get intoxicated with your own hormones, factors and proteins that the immune system produces, and it can lead to toxic shock and multi-organ failure.
SEB was developed as a bioweapon, and superantigens are also naturally produced by bacteria like staph or strep. Our vaccine candidate is a purified protein vaccine funded by NIAID and the DoD to prevent this superantigen response to SEB exposure. The Phase 1 clinical trial is currently enrolling.
You’ve also worked on filovirus vaccines (Ebola, Marburg), correct?
Yes. We completed our existing four-year contract, and the government is pursuing various options for the next step. We took it from early research to preclinical development.
How has the economy and current government environment impacted your business?
The reduction in funds has certainly impacted our development work, but it hasn’t had much effect on services. Our services clients are mostly pharmaceutical companies, and we do see continued interest. We offer our services for government contracts as well, but that’s not a major piece of our services business.
What advice would you offer to entrepreneurs?
It takes a very strong will—you really need to want it. If you get disheartened by every setback, you probably shouldn’t start a company. You have to stay upbeat in the face of constant setbacks. You get setbacks as a rule, and successes are exceptions. Build on those successes.
You need to have a plan. Most entrepreneurs underestimate the importance of a long-term strategic plan, and understanding of where they’re going. It’s very easy to get lost in minutiae. “If you don’t know where you’re going, you’ll never get there.” That sounds like common sense, but a lot of people who start a business don’t have a plan. I’m not claiming that I had a very clear plan, but I learned—the hard way—that you need to know where your company will be in five years. If you don’t know that, you’ll be nowhere. You shouldn’t necessarily adhere rigidly to your plan, but having a plan is crucial.
You’ve successfully acquired government funding. Can you offer advice to others who may be considering that path?
You need to have very strong science, and you need to have people who have a proven track record in science. If you have that, you can get SBIR grants. The government SBIR review system, especially the NIH review system, which I know very well, doesn’t favor anybody. If you have good ideas, a good team with a good track record, and you’re persistent, you can get your ideas funded. If you’re not successful, reapply. I submitted 12 NIH grant applications before the first one got funded.
Any final thoughts?
It would be a big benefit to both troops at risk of biowarfare and for public health if a MRSA vaccine could make it to market. Our SEB vaccine, as a stand-alone, could protect the troops from intoxication with weaponized SEB. It is also a component of a vaccine against MRSA that we are currently developing. This is a high goal that motivates us greatly. It drives us, and I think other entrepreneurs also want to play an important role in the solutions to big health problems like this. We will continue to be an engine of discovery fueled by our previous successes, of which I hope there will be many more!
This article is based on a conversation between Dr. Aman and April Finnen in April 2013. If you’d like to recommend a CEO for a BioBuzz profile, please contact April.