Episode Transcript
Mike: Welcome to the Leaders in Life Sciences podcast powered by Enterey Life Sciences Consulting. In this podcast, you'll hear from leaders in the life sciences industry, how they grew with their current roles, the lessons they learned along the way, and advice for those aspiring to follow in their footsteps.
I am the host. My name is Mike Ferletic, and I'm the CEO of Enterey Life Sciences Consulting. At Enterey, we help leaders orchestrate the positive change they want to see in their organization. Are you ready to be recognized for your leadership success? Take a listen.
Okay, welcome to the Leaders in Life Sciences podcast. My name is Mike Ferletic, and I'm the CEO of Enterey Life Sciences Consulting. Excited to have you here today for our show. I want to first welcome Courtney Boudreaux, our co-host. Welcome, Courtney.
Courtney: Hi, Mike. How are you?
Mike: Good, good. How are you?
Courtney: I'm doing well.
Mike: Awesome. And today we have a second co-host, Dani Petrunich. Welcome, Dani.
Dani: Hi, everyone. I'm glad to be here. Thanks for having me.
Mike: Sure. It's great to be here. Great to have everybody here. We'll introduce our guest in a second. I'm really excited about our guest today. But first, the time of this recording at least, I know it's probably going to be a little while before people actually hear this, but we're right around St. Patrick's Day. I'm pretty excited about that. What about you guys?
Courtney: Yeah, it's always a super fun holiday. I always remember as a kid I would always have to wear green to school so you don't get pinched.
Mike: That's right.
Courtney: It's going to be mean, but yeah, it's super fun.
Dani: I don't remember that one, Courtney, but I'll take your word for it.
Courtney: Really?
Mike: You don't remember getting pinched?
Dani: No, I've heard that from a couple of people. I must have just missed the memo on that one. But apparently, it was a thing.
Mike: I'm always very worried about that. When you'd forget you always say no, I've got a green underwear on. Well, cool. Hey, as a tribute to our guest, I did some research on St. Patrick's Day on a website called Katie Talks Carolina. Our guest today is from one of the Carolinas. But I've got a couple of interesting potential myths or facts about St. Patrick's Day for you guys. Let me know what you think. The first one here is among St. Patrick's many accomplishments, has he banished snakes from Ireland. Myth or fact?
Courtney: I want to say fact because that's what I've always heard, but it also sounds too good to be true. Banishing snakes, they probably weren't a good place.
Mike: What do you think, Dani?
Dani: I'm going to say true. That's what I've always heard. Although what I've heard about St. Patrick's Day is proven to be inaccurate so far, so who knows?
Mike: What's really funny is I've heard a lot about St. Patrick's Day, but never the real story, apparently. Well, according to Katie who talks Carolina, this is a myth. Apparently, snakes were never on Ireland because they can't get there. It's a myth there. All right. Number two, in an ironic twist until the 1970s, Ireland mandated that pubs be closed on St. Patrick's Day. Myth or fact?
Dani: It has to be a myth, right?
Courtney: I would say it's a fact because I think that's why America overcompensates.
Mike: I don't know if that's why but it is a fact. I think actually, it was a religious holiday. So it became like a holiday holiday and the pubs were not allowed to be opened and stuff. So yeah, as long as I can remember, the pubs are always open on St. Patrick's Day. All right. Next one here. Full-grown leprechauns are about two feet tall.
Courtney: I want to say that's a myth because leprechauns are actually inches tall. Because when I was a kid, my brother and I used to build leprechaun traps every St. Patrick's Day. It was just whatever we could find in the backyard. We had a strategy. My brother was still too young to figure it out. But I knew better but we still built the leprechaun trap. So in my world, they are like, maybe a foot high.
Mike: Okay. What do you think, Dani? Two feet tall?
Dani: I'm going to defer to Courtney. I'm recalling the movies I've seen and I think they were all like, you can hold them in your hand. So I'm going to stick with Courtney that they're smaller than two feet.
Mike: All right. Well, this is kind of a trick question because according to Katie on Katie Talks Carolina, they are about two feet tall. But are there really leprechauns? I guess, is that the myth? So we'll see. If you get a hold of one, be sure to get the pot of gold.
Courtney: So we always used to have a bucket with a stick, and I used to distract Dylan and I'd go kick the stick. I'd be like, Oh my God, the trap went off and it was never there. It's because they're magical. They teleport out. Dylan insist that I saw it and I would describe it. Yeah, well, we'll have to keep trying, Mike.
Mike: That's right. All right. Last one here. The original shamrock shake contains actual shamrocks.
Dani: Myth.
Mike: Of course, it's a myth. There are no shamrocks in the shamrock shake. It's all just a famous recipe. All right. Well, thank you again to Katie Talks Carolina. You know there's a special recipe for a shamrock shake on Katie Talks Carolina. We'll have to put that in the show notes. Courtney, what do you think about that?
Courtney: Yeah, mint chip ice cream.
Mike: I love it. That's my favorite shake, by the way. It's shamrock shake. Well, exciting stuff. You all know, I am Irish by education. My middle initial is O, so I am Michael O. Ferletic. So that's why I love St. Patrick's Day so much. But all that and it's time for us now to move on to our guest. We're really excited to have our guest today. Looking forward to hearing all the insights that we're going to gather.
Our guest today is Paul Garofolo. Paul is the CEO and co-founder of Locus Biosciences. And with a career that spans manufacturing, research and development, information technology, and corporate transformations, Paul has a broad range of experience and capability that's going to help him deliver on the Locus vision.
Prior to Locus, Paul was Chief Technology Officer at Patheon Pharmaceuticals, and also held the role of global head of operations for Patheon Pharmaceuticals' development services business unit. He previously served as a Global Head of Manufacturing and Chief Information Officer at Valeant Pharmaceuticals, among other roles.
Paul was a visiting professor at North Carolina State University's Poole College of Management and volunteered as an Executive in Residence for the High Tech Graduate Program, which is NC State's entrepreneurship collaborative. That is where he identified the technology that would form the basis for Locus. Paul earned a BSBA in Management Information Systems from the University of Arizona—go Wildcats—and completed the Advanced Management Program at Harvard Business School.
So without further ado, please welcome our guest, Paul Garofolo. Welcome, Paul.
Paul: Thank you, Mike. Thank you to all of you guys, Courtney, Dani. Nice to meet you all.
Mike: Yeah. Great having you. Let's get started. Tell us a little bit about how you got to where you're at today leading Locus through this amazing journey,
Paul: I was trying to think of a joke to tie back to your St. Patrick's Day thing. It certainly wasn't, let's say, green underwear or getting pinched in high school. It might have had something to do with drinking with you, Mike, while we were at Ernst and Young early in our career. I guess that's a different story for a different podcast.
Mike: That's right.
Paul: I guess just by way of sort of an intro in the Locus admin, it was sort of a little bit of serendipity. I was really just working at NC State as an executive resident. This Ph.D. candidate walked in the door with this invention called CRISPR-Cas3. I think it was a payload without a delivery vector. So it was kind of a Ph.D. idea without a home for a little while.
We started to work together, not only with the Ph.D. candidates but with the professors that surrounded that person. We pretty rapidly started to point towards what could we combine together here to get this delivered into the human body and what can we do with it. Lo and behold, we sort of became really, really clear that the enzyme itself worked like a PacMan. Much like the old arcade game.
That's kind of the best way to explain it to folks on a podcast. You just point it toward something. If it found the right address, it would just chew back the target genome of that bacteria cell. Then trying to figure out how to deliver that payload was another saga of a bunch of different types of which over time, bacteriophage, which is a virus, came to be the one that was the winning formula.
Yeah, the early days of the company were really fun. After 25 years of working in big pharma, so to speak, to be back on a university campus, playing around with petri dishes and professors, was actually pretty cool. We spent about six to nine months at the universities before we decided we had to kind of get serious about it, put some real money behind it, and start the business. But anyway, that's a little bit of the story of how we all got started.
Mike: That's great. Now, maybe just for those of us not completely informed about CRISPR and phage technology, maybe tell us a little bit about it. Tell us about CRISPR. Tell us about phage.
Paul: I don't know how scientifically oriented your audience is. Luckily, I'm not a Ph.D. So I can only describe it in layman's terms.
Mike: It's probably perfect.
Paul: A bacteria cell is a single-cell organism, right? The idea is that everything that it needs to survive and evolve has to be contained within that cell. Of course, it has an immune system. In fact, it has a couple of different immune systems. But one of the best known is CRISPR. So people know CRISPR is a gene editing tool. It's not. Actually, it's biological origins or it is a single-cell bacterial organism's defense system.
There are a bunch of different enzymes that it could use, depending on the type of CRISPR system it has to defend itself. The one that's most prevalent and about 50% of the known CRISPR systems that are out there are these Cas3 enzymes, which would work like a PacMan. I think somewhere between 12 and 15%, somewhere in that general range is Cas9. I think Cas9 is very well known, obviously. Works like a molecular pair of scissors and sparked a whole generation of new innovations.
But Cas3, I think, is just much less known even though it's more dominant in nature. The way CRISPR works is essentially as an RNA Guide, which you could think of as something that finds an address. When it finds that address, it recruits essentially the rest of the CRISPR system, associated tool, or enzyme to do some function. But its primary function is to defend its main host.
So what we figured out how to do is basically pull that machinery out of a bacteria cell and embed it into the genome of a virus, and essentially port it to other targets, taking that same defense mechanism and pointing it where we might want it to be. How's that for quick and dirty biology and on CRISPR and bacteria?
Mike: Pretty good, pretty good. I definitely appreciate the layman's version versus the Ph.D. version.
Courtney: Yeah, it's super excellent. So you mentioned something about gene editing with CRISPR-Cas9, which is what we more commonly hear in the news and media. We know CRISPR-Cas9 is a very new hot technology with an incredible amount of potential. But it can also be a little bit controversial with some of those ethical implications involved. So how does Locus address that in the way you're applying your technology to bacterial cells and as an antibiotic alternative?
Paul: That's a great question. So Locus is exclusively focused on bacterial targets, not human cells. We actually don't have the ability through our viruses, bacteriophage, which I guess we could do a quick bio lesson on too. But those particular viruses cannot bind to and or infect, or in this case, inject the CRISPR-Cas3 payload into a human cell. It's probably the world's safest microscopic syringe because it only binds to and delivers its payload to a bacteria cell.
Maybe a quick step back. Over billions and billions of years, bacteria have evolved on the planet. Like all organisms on the planet, you have predators and you have prey. The reality is, bacteriophage is the predator to bacteria as prey. So over billions and billions of years, trillions of bacteriophages have evolved to attack and really maintain, I guess, viable amounts of the target bacteria that they're paired to.
This is kind of a weird one. But lions on a prairie with zebras, the lion does not kill all of the zebra or it would then die from having no food. So at one point, you reach this in nature, you reach this sort of natural level of balance, and predators back off of the prey. Either because they're full or there's not enough food present. The idea is to keep populations under control. That happens at a microscopic level between bacteriophage and bacteria.
Most people as well aren't really aware of how much bacteria is floating around a human body, but it is a lot. Depending on what time of day, somewhere between maybe 60, even upwards of 70-80% of the cells that are in your body are bacteria. And bacteriophages are also in there floating around. So actually, if you think about it, CRISPR-Cas3, when delivered to a bacteriophage, doesn't have any way to edit a human being. We're sort of completely removed from that ethical concern, and thankfully so. I don't think I'd really enjoy answering that question. We're in the ballpark of editing human genes.
Courtney: Of course, fair enough. So I have a question for you, Paul. I noticed or it sounds like there are applications right now that's focused on infectious diseases. But are you looking at other applications for this technology?
Paul: Yeah, we actually were looking at them in two different ways. I think if we look at using CRISPR-Cas3 to remove bacteria, that's not pathogenic in your body. Maybe a great example would be ulcerative colitis. We don't know whether it's good bacteria that might be in the intestines or "bad bacteria", that would be in the intestines. But I think it's pretty commonly understood that the immune system is attacking likely bacteria in your body, which is not essentially shutting down.
Through long term attack on your immune system, you get inflammation, lesions, and all kinds of horrific, therapeutic side effects, if you will. We think that if we can target the right bacteria in the intestines to get it removed with this tool, we might be able to get the immune system to calm down. If we do that and the immune system stops attacking, then in theory, the inflammation, the lesions, and the rest of the damage that the immune system is causing inside the body should relax.
We're pretty excited about taking the technology and moving from infectious disease into immunology. We think there's a broad swath of potential indications and ailments that the platform can be used for. Honestly, science is just beginning to learn, now that the veil of antibiotics is kind of coming down, what bacteria's role in the body really is. I think there's a definitive role for removing certain bad actors selectively while leaving all of the good actors in place.
I think we're probably one of the only modalities in the world that specifically targets selective removal of bacteria. So there's a broad, hopeful field of therapeutic areas that we can hopefully port the technology.
Courtney: Sounds like all of those very strong broad-spectrum antibiotics that have led us to, MRSA or methicillin-resistant staph, or VRE vancomycin-resistant enterococcus, but all of those broadspectrum, highly toxic antibiotics can essentially fall by the wayside, potentially, with your new technology. So I think it's awesome and could result in amazing clinical outcomes for those patients affected by those diseases.
Paul: Yeah, and you're on to something there. I think we even think about it one step further. When you think about advanced diseases, for lack of a better way to describe them, I don't think the common person understands the volume of antibiotics that are involved in all treatments.
So take cancer treatments, typically, before a patient undergoes even at this point, sort of older therapies like chemotherapy, doctors tend to use high amounts of antibiotics to pre-treat those patients and really effectively blow out their microbiomes entirely just trying to clear out all the potential infections before then you go under radiation treatment. So you leave radiation really beat down.
That's why they tell you your immune compromised. You need to kind of stay at home. You can't really go out. Don't be around grandkids. These types of things are not only from what radiation did to you, but from long term antibiotic pretreatments. That's true for checkpoint inhibitors like Keytruda or Opdivo. That's true for gene editing technologies.
You don't really realize this, but many times before the treatment of an advanced disease, you go under 14, 21, and sometimes even 28 days of antibiotic treatment before you even get to the therapy that your doctor is after. What we've been beginning to find, especially in the world of precision medicine, is low drug response rates. Average drug response of checkpoint inhibitors is quite poor, certainly well below 50%.
There may very well be a need to eliminate antibiotics from that pretreatment if you had viable antibacterial treatments that could deal with the infections that do come along for the ride. It's not uncommon for a cancer patient to get a urinary tract infection or a respiratory infection.
Let's say you're on Keytruda for two years, it's working, and you end up getting a urinary tract infection for some reason. Maybe they hit you with nitro for 14 days. You'll have to go to the data yourself, but you have a high probability of being knocked off Keytruda.
I think the field of science is beginning to try to look at what is the collateral damage that's really involved from taking these antibiotics. And I think it's far broader than what you might originally think. I think time will tell, but I think there's a much bigger need for replacement for antibiotics than just the treatment of MDR.
Mike: That's great. My wife has a dairy allergy. She's not lactose intolerant, but just like what you described, she can drink. Milk is fine, or yogurt or whatever. But over time, her body started to attack her immune system because of it. It's exactly what you just described she deals with. So she has to eliminate that from her diet. Those are some things that'd be great to see that application.
I was going to switch gears here. But just wanted to get a little bit more into your personal experience in terms of the startup and whatnot, kind of looking back in 2015 is that right when you started things up?
Paul: 2015.
Mike: Almost seven years. I can't believe it's been seven years. When you look back on things, are there things maybe in that early time period that you say I could have done something differently or you wish you would have done something differently?
Paul: I should have dyed my hair, Mike, is what I should have done.
Mike: I don't dye my hair. It's natural.
Paul: Right. I got to figure out whatever you're doing. Now, I think when you look back on any portion of your life, there are always things that you probably wish you could know. Maybe if had you done something differently, what would be the outcome? I'm not sure I changed much, to be honest with you. If I did it again, I wouldn't do it the same way.
Maybe some of those things would be the original startup licences that kicked the whole thing off. Maybe some of the initial early players who both were involved with the company or investors that kind of came around the table. Honestly, I think all of them, anytime you're in one of these, they're all learning too. That's actually part of the fun is learning together all these different pieces.
I don't think any of the decisions that we made in the early days are stopping us from being successful today by any stretch, and a lot of them have made us stronger, whether we want to do them or not. But I think there are those pieces. I do think that there are sacrifices that you make in the early, early days of a company in terms of probably how broadly you apply your platform based on how much money you do or don't have.
Platforms are very different in my mind than individual assets. So I suppose my biggest regret was not fanning out beyond infectious disease at a far earlier time in the company. When we started the company, Cubist just sold to Merck for $7.5 billion. We were like, woohoo, this is going to be great. Then next 24 months, you had just about every strategic pharma exit the space.
Within another two years, you had multiple bankruptcies from pretty much all these third and fourth-generation. Small molecule is failing out, and it became a very difficult space. Had we fanned out earlier, we might have had a couple more legs to stand on. That being said, you know this pretty well, Mike, but we fanned out towards services, and not necessarily towards other therapeutic areas so that we could bring in revenues so that those revenues could basically supplant the need for outside investors.
Basically, we've built a going entity instead of going into the beg and burn, as I like to call it, where you're out with venture begging for money and burning it down, and then going back out and begging for money and burning it down. We decided we had to do it a different way here. I think we have a lot more stable operational organization to benefit from as we now move out into these other therapeutic areas.
We're essentially funding that ourselves, which may not be as fast as you might like it, but it's quite sound in a way that we're able to expand. I mean, there are probably a thousand other lessons I could have focused on but maybe those two are the best.
Mike: Yeah, I love the answer that you probably wouldn't change anything like, hey, you learn. Not everything was perfect but you learned a lot along the way. A lot of great partners go in with you. So that's cool.
Paul: Yeah. I suppose if you're still in business in seven years in a space you want to invest, you don't have that many complaints about what you did wrong.
Mike: That's right. That's right.
Paul: We're doing well, man. We've got a billion dollars of contracts with Johnson and Johnson and the US government. We have more revenue than 95% of the publicly traded biotechs that are out there.
Mike: That's pretty great.
Paul: Yeah. Honestly, this is probably something to be said about not being an entrepreneur and just being somewhat ignorant about what you need to get it done. I mean, we grew up in corporate pharma and you got to make money.
Mike: Exactly, yeah.
Paul: You need free cash flow. I'm just used to quarterly reporting as well. We sort of carried all of that with us into how we built the company. I think we're in a very different space based on that.
Mike: Hey, Courtney. A lot of our clients we work with have great ideas on how to improve their business, but they just run into challenges that seem to get in the way of accomplishing their goals. Have you ever seen that?
Courtney: Yeah, of course. It happens all the time. I've seen clients struggle with a lack of visibility into all the work that's happening within their organization. I've seen clients that are focused on manual tasks, which takes away from focusing on the actual project work. I've seen leadership struggle to make decisions due to lack of timely information.
Mike: That's so true. It seems like just knowing the problems to fix is only half the battle. How do you help your clients address those challenges?
Courtney: Well, we of course first work with our client to design a structured management process that fits their culture and team. In a lot of situations, we bring in tools like Smartsheet to help the entire project team be more efficient. With the help of Smartsheet, we were able to create dashboards, automate routine tasks, and have the information ready in real time to help support leadership's decision-making.
Mike: Wow. It sounds like you not only execute the project, but your work helps everyone get more done with less work.
Courtney: I hope so. Smartsheet is a powerful tool, and my clients seem to be really happy with it.
Mike: That's great. Now, if somebody needs help on their project, what should they do?
Courtney: They should check out enterey.com and schedule a call with us to see how we can help.
Mike: Sounds like a great idea.
Courtney: Well, thank you.
I think you were touching on some points that I definitely wanted to ask more about, which includes—Mike, maybe you might want to answer this question as well—what was it like venturing into creating your own company out of the safety of working for a larger organization or that kind of secure feeling and taking that risk and making the jump?
Paul: Well, Mike did it first. He probably got some—no, I'm just kidding. Actually, I'm sure it's probably not that different, right? It's freeing, to be honest with you. I don't know how you ever felt about it, Mike. But in corporate America, there's a lot of politics. I was telling my people, it's very unique to have everybody in the same boat. Everybody has an oar in their hand, everybody's oar is in the water, and we're all rowing in the same direction.
That's not what you get in corporate America by any stretch. So navigating all of that and having to do transformations to recover from mistakes, having to do, let's say, I guess, big exciting deals, it would be maybe the other side of that sword of what you don't necessarily have access to. But I think, sort of the big business living on an airplane managing teams, for me, it was like 14 different countries simultaneously. Going from that to like, I'm on NC State's campus in shorts and a t-shirt working with professors and students.
It was really freeing. It was great. It was super fun. It's sort of back to our very creative days where anything was possible and years sooner not beat down over time by [...] struggle for a couple of margin points. I don't mean to belittle corporate America in any way, shape, or form, but I mean, I feel like a 25-year tour of duty was long enough. For me, anyway, seven years in the entrepreneurial and emerging space has been super refreshing, super rewarding.
It's incredibly difficult. It's much harder. It's much less forgiving. But it's also, you and your team are responsible for everything. That, at least for me, was quite freeing to be able to be in control of our own destiny as a team. Believe me, we made mistakes. I'm sure we have more in front of us, but we can attack them faster when we're more honest with each other about where we stand. We have no choice but to power through.
I think that builds excitement around a challenge that's a lot more exciting than margin points on 90-day earning calls for me. Anyway, that's my take. Mike, you've been doing this longer than me.
Mike: Yeah. Courtney, I've been asked that question a lot over the years. When the first time somebody asked that question of me or probably the first few times somebody asked that question on me. I was like, did I really take that big of a risk? I was like, I had no idea that that was such a huge risk. People then ask the second time, I'm like, oh my God, what did I do? This was like three or four years down the road. But you look back and it is. You got to kind of jump. You don't know what you're going to land on, but you got to take the jump.
Things obviously worked out from our perspective. But yeah, there is this element of you hear all these stories of you're your own boss, you don't have to listen to anybody. Paul will tell you that it's absolutely not true, right?
Paul's got investors and a lot of people that are knocking on his door, probably. We've got clients and things like that. There is that side of it, but I do like what Paul mentioned there. It's all on your shoulders. That's a good thing and a challenging thing. You have total responsibility and I think total control of what you can and or will do in order to address those concerns of people.
The freeing part is you're not necessarily relying on everybody else. You have that freedom to do as you think is best and push forward. But yeah, I do look back on that and go, wow, I think that my son was a year and a half old at the time. People were like, wow, you had a baby? I'm like, yeah, oh my God. It's a whole different ball of wax, but yeah, a lot of fun.
Courtney: That's amazing and admirable for both of you. From our perspective, it is a huge jump. It's so interesting to hear that you guys both have similar perspectives and that it's awesome and you love it. I'm sure there are anxieties. You haven't mentioned it. There's always that factor in everything, but it's excellent to hear that it's positive and you're happy with the choices.
Paul: There's always stress. I think I got probably more pressure and more stress. I remember the day we announced that we started the company. My old boss, Jim Mullen, who used to run Biogen Idec and then Patheon, he sent me an email and said, I wish you all the best of luck in the world. I hope you don't have as many sleepless nights about payroll. I think that's a CEO's number one concern. It's mine.
We actually run a KPI, how many payroll turns do we have in the bank. That number needs to be at a level that Paul can sleep. It's important. As the company grows, the payroll burden grows, and so does the bonus burden and all that stuff. That's one that on troubling days, it gets you out of bed real fast and gets you to work. There's certainly stress that comes along with it.
I can remember being just as worried about other things as a corporate executive. There are so many problems on that side too that you control a lot less. That lack of control sometimes is also really difficult for people to deal with. I don't know if it's any more or less stressful.
Mike: It's different, right?
Paul: Yeah.
Mike: I can agree. The number one thing Courtney and Dani hopefully appreciate is payroll is number one. If everything else can wait. We got to make sure that happens.
Paul: Yes. That's the right answer, Mike. I like that you're paying attention to our payroll. Good, yes. That's true.
Courtney: Paul, we were recording a previous episode the other week. I was doing rapid-fire questions for our games. I asked our co-host, who's your favorite boss? And without missing a beat, he says Mike Ferletic, and we're all laughing so hard. Yeah, of course that's the answer.
Mike: Yeah, a lot of fun. All right. Hey, Paul, a couple of comments ago, you mentioned your partnerships with BARDA. I know you've got a number of investors. You've obviously worked with NC State.
These are all different big entities. I'm just curious if you could comment on, how do you deal with what is sure to be like the various personalities, the various perspectives of all these different stakeholders in your business?
Paul: I think you can separate them a bit. Investors are one sort of group of people that you need to deal with. That's evolved a lot over time starting with individuals and moving to institutions. I lumped government and strategics like Johnson & Johnson. I lumped them into basically clients. I guess you could say the last are sort of either universities or folks that maybe were from our early days of creating the company and moving forward.
Each one you deal with somewhat differently that the university is honestly—we sort of pay our royalty/contract commitments these days. When we started the business, we actually had a bunch of things that we licensed and a bunch of things we optioned. Seven years deep now, we've sort of cleansed all that. We know which ones we converted to licences, which ones we freed up, and now we're just sort of paying numbers to people.
Basically, probably beyond two years, there wasn't too much interaction with the universities. You're sort of beyond that, but very impactful in the early days. The investors sort of changed as well. In the early days, these first two years, there are a lot of people that you and I both personally know, Mike, because you're raised with friends and family usually to get started.
You'll land early investors, which are kind of local investors, and then you finally hit a big institutional. From there, the board gets essentially redone, players get changed, and the information rights change. In fact, you need to kind of cut off some information to some of the older individual audiences and then move more of your concern to the new ones.
All those I find to be very normal for any startup. I think the clients are what's different here. We have these four major programs. Frankly, there are two strategics, not just one. We just can only talk about one, and then there are two government/government public-private partnership deals that we're in.
I credit even all the way back to the days of Ernst & Young, Mike. All the things we've done through the years in providing management consulting services is creating engagement teams for each of those major accounts. It's a team effort and a team problem. Each of those has essentially like handshake roles from top to bottom in the company marrying clinical teams, CMC teams, discovery, and R&D teams. Everybody faces off to their appropriate pair inside that organization and our organization, and you run it.
We run it like we always did, right? We have steering committees and we have governance bodies. Each stream has their own teams, their sub-teams. I think that's rare from what I'm finding. I think every partner we come up to like Johnson & Johnson or say another strategic, they're like, whoa, we weren't expecting this.
We just said, look, we signed a contract. We've got to deliver X, Y, and Z. We've got a plan to execute. You're coming along for the ride. That actually, usually is pretty well received. In that part, as we've grown, we've had to grow that. We've had to make pretty big investments in it.
I think one thing that maybe we're quite unique in is 10% of our employment base is targeted as PMO. Project managers, program managers is a heavy population for any company. But one I always believe should have been there in corporate from the work that we always had to clean up, it's proven to be probably one of our greatest strengths. It helped us to grow our accounts like you would anywhere else.
Mike: Right, nice.
Paul: Anyway, that's probably the best answer I got.
Mike: That's awesome. I know we're getting close to our time here, but one last question maybe. I'm just thinking about your team and maybe a combination of when you look to bring people into Locus and maybe your advice for people in general that are trying to grow in their career. What are some of those key characteristics that you want to bring into Locus?
I think probably the same thing with [...], what's your advice to people that are trying to make that next step? And what are some of those key characteristics that will help them be successful?
Paul: Yeah, I wonder. We're a little different, I suppose. We have a core set of values. I think the two that throw people the most, and it sounds good on paper and it's very hard, are team first and transparency. I always tell we have a lot of academic graduates that work here and then we have a lot of institutional.
It's sort of have either a lot of younger professionals coming in for their first job because it is in this sort of synthetic biology, gene editing space, and not a lot of people out there that know how to do this stuff outside of that. But then you have all these industry veterans that got to come in and run the clinic, the accounts, and those types of things.
I always tell a pretty simple story. If you're the type of professor who wants to take their students' work, stand on stage, and present it as your own, you're not going to survive here. If you're the type of person that wants your students to stand on stage and present their own data, you're going to do very well here. We're looking for people who are humble.
I can ask you 1000 questions if you're humble and you're going to tell me you are, I'm just going to tell you if you're not, you're not going to make it. Then on the team first side, I always start to say to people, I think if you think back through your career of all the different bosses you've ever had, you know the difference between someone whose best interest is in you versus themselves. If you're the latter, you won't survive here because there are no individual superstars that are going to get done. The absolute almost impossible tasks that are in front of us, only a team can get them done.
If you're not humble and you can't put a team before yourself, you won't make it. I try to weed out anybody from getting in here, Mike, that actually can't answer that question well. I try to say it as firmly as I can so they know that we're serious about it. We do have a fairly high turnover rate, certainly higher than 10, less than 20. And it varies in between.
By that, I don't mean Locus. I always try to clarify. You don't need to be a company person. You're on a team of somewhere between three to eight people, that team means everything. All that matters is that team is successful.
I don't care how many hours it takes, I don't care how difficult the task is. None of that stuff matters. You got to be ready in a startup and in an emerging company to tackle that. And only you can answer that question. If you want to be a part of that, and you want to be a part of a team that does something that gets praised for a team, come to Locus.
Mike: That's awesome.
Paul: It works a lot. Honestly, I do think everybody walks in the door with great intentions. Just over time, you have to work with people. You just have to work with people. Sometimes you get great people, you just need to coach them, push them, and you end up getting where you need to be.
Everybody can get there. Everybody's got strengths. Everybody's got weaknesses. You just got to get the right person in the right role. Anyway, maybe that's my best answer for you.
Mike: That's awesome. No, that's great. I love that. I love that you're really helping to kind of focus on the people that you have and grow them, put them in the right spots to succeed, and give them the chance to do it. That's great.
Hey, we are just about out of time. I want to keep a few minutes so that we can keep Paul on for our little game here. We're going to talk about some of our key takeaways here in just a few minutes. I love that part of the show, but the next part of the show is one of the most fun parts of the show.
Paul, if you've got just a few minutes, I'm going to keep you on the line for this. Nobody knows what the game is because I created it today. We'll see how fun it is. We're going to go with Ernst & Young trivia since we have some alumni here. Courtney, I'm going to see if maybe you can beat out the others.
Courtney: I doubt it.
Paul: You're going to beat it out because it's been 28 years. I don't ever remember. Go ahead, Mike. Let's see what you got.
Mike: Yeah, we should be okay. There's probably some stuff here, Paul. I think you're going to get a couple of these. All right, first question. What were the two immediate predecessor firms for Ernst & Young? I've got options for you. A is Ernst & Ernst and Williams & Young. B is Ernst & Whinney and Arthur Andersen. C is Ernst & Whinney and Arthur Young. And D is Ernst & Williams and Arthur Young. Who wants to go first?
Paul: I want to say B, but I don't know if I'm right.
Mike: B, all right.
Dani: I'm casting my vote with D.
Mike: D?
Paul: D sounded like it had legs, for the record. I think that's D, but B, multiple choice. You got the percentages with you.
Mike: What do you think, Courtney?
Courtney: I couldn't tell you. Let's just go with A because nobody has picked it.
Mike: A, all right. All right, second question. In what year was the original firm that became Ernst & Young founded? I won't give you which that firm name was yet. But is it A) 1989, B) 1946, C) 1895, or D) 1929 right as the Great Depression started?
Courtney: I'd say 1989.
Paul: I'm going to say 1895.
Mike: All right. How about you, Dani?
Dani: I wrote C down.
Mike: All right.
Dani: I forgot what the actual date was.
Mike: I've got two Cs and an A. Okay, next question. In the year 2000, after all was safe from the Y2K potential disaster, the consulting practice of Ernst & Young was acquired by which European company? Was it A) Renault, B) Capgemini, C) A.T. Kearney, D) None, they were acquired by Microsoft?
Paul: I so want to pick B, Capgemini.
Courtney: I vote Capgemini too.
Mike: Both says B. Dani, did you say that too?
Dani: Yup.
Paul: Do you want to have a whole different outcome for you and me? I've never been to that. That would have been a much different outcome.
Mike: That's right. What do you think, Courtney?
Courtney: I'm going with the crowd here. I'll follow the subject matter experts.
Mike: That's a good answer. All right, last question. When Ernst & Young was formed, there was also another merger in the industry which ended up creating the Big Six accounting firms. Today, how many big X accounting firms are there in the world? Is the answer A) Eight, B) Four, C) Five, or D) That's so 1990s. They don't use that terminology anymore?
Courtney: I think the definition of being one of the bigs can be vague because a lot of people want to be included but might got hit criteria and the definition is a little vague. I want to go with four, personally.
Paul: Four's got legs, for sure. I think it's B, I think it's four.
Dani: I'm the third guest for four.
Mike: All right. Okay, let's go through these real quick. You guys did very well overall, except for number one. Nobody got that one right. The initial predecessor firms were Ernst & Whinney and Arthur Young. You guys picked all the other options.
Number two, 1895 was correct. I'll give Courtney an honorable mention because Ernst & Young was founded in 1989. But in 1895, Arthur Young founded his original firm. Apparently, this guy was not very much a family man. He founded the firm with his brother. His brother, they got ticked off at each other. He left and there wasn't a lot of family love there, apparently.
Okay, question three. Everybody got that one. Capgemini bought our consulting practice. I was still there. Paul, were you still there?
Paul: No, I had left.
Mike: You'd left, okay.
Paul: I had left.
Mike: We had become Capgemini, Ernst & Young.
Paul: I came back to Microsoft, though. That could have been a different outcome.
Mike: That's right. That would have been a good one. Yeah. Too bad they didn't look at us that way. And then lastly, everybody got that one right. Yup. Today, it's the big four. But when Paul and I joined, it was the big six. Prior to that merger was the big eight.
All right, that's it. Thanks for sticking around for that, Paul. Loved it. Appreciate you joining us for the whole show and giving us your time and insights. I wish Locus the best. It sounds like things are going well and amazing stuff you're doing. I'd love to see the next few years ahead for you guys. Looking forward to hearing more.
Paul: It's great to see you, Mike, and very nice to meet you both. I will certainly think good things as well about the podcast and do as much marketing for this as I possibly can.
Mike: Awesome. Take care. Thanks again, Paul.
All right. That was awesome. It was so great to have Paul Garofolo, the CEO of Locus Biosciences on our show. Now we're going to move into the great part of our show where we talk about some of the takeaways that we have from that conversation. Either of you want to go first?
Courtney: Sure, yeah. I really enjoyed the conversation with Paul. I am thrilled about learning about the product that his company is trying to create. I think one of the main key takeaways for me was it's incredibly valuable with his mindset of just going past beating resistant bacteria to antibiotics. How do we influence patients' lives for the better and change clinical protocols to make their lives easier?
I think when he was discussing its potential application to cancer patients and eliminating all of that antibiotic use was incredibly profound because I think we all know somebody whether you're listening or participating on the call. I think everybody knows somebody with cancer. The amount of potential that this product has is limitless. I think that was incredible to hear.
Mike: I totally agree. What about you, Dani?
Dani: I really was shocked to find out that 60%-80% of our cells could be bacteria. I thought that was a crazy statistic. Just the technology in general, I love how it started out as this Ph.D. idea and it's now the basis of this company. The work that they're doing for the selective removal of all those bacteria cells to be able to target specific ones and fight them, I just think that's amazing.
Mike: I agree. I couldn't believe that number either. I had a good joke about it. I thought of a good joke about maybe on Friday and Saturday night, my bacteria level goes up higher and hopefully it comes down during the week when I'm not out enjoying dinners out and whatnot. I'm not sure if that is the cause of the fluctuation in our bacteria levels or not.
One of the things I thought was really kind of cool was, especially coming from a business owner perspective, is how he talked about the various relationships he had with the key stakeholders from the government stakeholders with BARDA, to Johnson &Johnson, to his investor groups, and how they handle that really like a project. Just focused on identifying what are our deliverables, what are the key things we need to produce in order to satisfy this customer, and executing a plan that satisfies the needs of those various entities.
I thought that was really, really insightful and is great information on how we can each make sure we're meeting the key needs of our stakeholders. That was pretty cool.
I think we are about at the end here, guys. That was a great conversation. We thank again, Paul Garofolo from Locus Biosciences, their Founder and CEO. This again has been the Leaders in Life Sciences podcast. It's so great to have you. Thank you, Courtney. Thank you, Dani.
Dani: Thank you, Mike.
Courtney: Thank you, Mike.
Mike: All right, let's wrap it up. Let's move on. Please be here again next time. We're going to have another great guest on our show. We look forward to seeing you then. All right. Take care, guys.
All right, let's wrap this up. If you liked this podcast, please don't forget to subscribe. That really helps us out. Also, leave us a five star rating. That's a big help too. If you'd like, please feel free to share your thoughts in the comments as well.
Thank you for listening, and hope to see you next time on the Leaders in Life Sciences podcast powered by Enterey Life Sciences Consulting, where people drive results. Take care.
