Travis Stiles, CEO of Novoron Bioscience
An in depth interview with Travis Stiles, PhD, CEO and co-founder of Novoron Bioscience on how his research at UCSD led to a company working towards treating spinal cord injury.
About Founding Bio: It is becoming increasingly common for academic trainees in the life sciences, both graduate students and postdocs, to found and lead companies based on their academic research, a movement termed founder-led bio. The idea of starting a company when your whole career has been in academia can be overwhelming. I want this Substack to be a resource for aspiring founders to read about the experiences of people who have been in their shoes. These interviews will go into detail on topics like the tech transfer process, when to spin out, and getting initial funding.
“It was never about me feeling like I was the right man for the job. It was more like I was the only person for the job and then I just had to figure it out.”
-Travis Stiles, PhD, CEO and co-founder of Novoron Bioscience
Travis Stiles, PhD, is the CEO and co-founder of Novoron Bioscience, a San Diego-based pharmaceutical company developing drugs for central nervous system regeneration. The science behind Novoron came out of Travis’s work as a PhD student and postdoc at UCSD, where he discovered a novel function of the protein LDL receptor-related protein 1 (LRP1) in neuronal regeneration. Novoron’s lead asset targets LRP1 for spinal cord injury. In our interview, we discussed how Travis was convinced into starting a company by others in his PhD program (Question 3) and how the JLABs incubator in San Diego has changed the local biotech startup ecosystem (Question 5). We also cover the importance of finding investors that believe in what you are doing (Question 7), why inclusiveness is imperative for innovation (Question 9), and the importance of passion in running a company (Question 11).
1) Hi Travis, let’s talk a bit about yourself and your company, Novoron.
I'm Travis Stiles. I'm the CEO and founder of Novoron Bioscience. I grew up in Idaho and then I did my undergraduate degree in exercise science at Williamette University in Oregon, and a master's degree in exercise physiology at University of the Pacific. I had a circuitous route from exercise science and physiology to then neuroscience research for my PhD at UCSD. I did my PhD in the Biomedical Sciences program at UCSD with Steven Gonias and I did a postdoc also at UCSD in the Department of Ophthalmology with Jeffrey Goldberg, before he moved to take the position of Chair of Ophthalmology at Stanford.
I actually officially spun out the company (Novoron) while I was still a postdoc and the core technology was based on my PhD thesis work. We started primarily as a spinal cord injury company. The focus of my thesis was on the receptor LRP1 as a novel regulator of the underlying mechanisms for regenerative failure of brain and spinal cord neurons. Novoron was initially spun out to develop drugs against the LRP1 receptor to promote regeneration after spinal cord injuries. We've since expanded beyond that. We noticed in our early spinal cord studies that we were seeing benefits to myelination in addition to nerve growth, so that led into a remyelination program. LRP1, as well as other members of the low-density lipoprotein receptor family, are implicated in a lot of diverse diseases, and people have been talking about them as potentially being therapeutic targets for a long time. But the problem is that they didn't think that they were good targets for drug development.
[On why they were thought to be poor drug targets]
Many of the LRP family members have significant similarities in binding motifs, they basically all share two types of biting motifs, type one and type two binding motifs. When you look at any diagrams of the LRP family, you can see that they just look like varying sizes of the same functional domains. LRP1 has at least 40 ligands that it's been identified to bind. There’s this stigma that they are scavenger receptors, which is something I've never believed in. Even when I was an early graduate student, I was seeing that there were discrete binding domains within the proteins that were unique depending on the ligand, which is supported by the fact that these receptors, they don't all bind the same stuff. They don't overlap a great amount in terms of what they bind, and they certainly don't overlap in their functions. And the fact that one protein binding to LRP1 could lead to one effect and different protein binding to LRP1 could lead to a different effect always seemed like a paradox to me, if any binding was equivalent.
[On the new direction of Novoron]
Now, Novoron has evolved. Spinal cord is still our long program, and it's the one we're most passionate about. The newest iteration of Novoron is really as a low-density lipoprotein receptor drug development company. In 2020, a paper in Nature from the Kosik Lab identified LRP1 as the master regulator of tau spread. Obviously, tauopathies are a big focus and there's a lot of enthusiasm about them. Tau spread is one of the newer, mechanistic aspects of tauopathies that's unique to these diseases. The ability to potentially interrupt that spread drew renewed interest in LRP1 from the (pharmaceutical) industry in terms of being a drug target. That really motivated us. We've known for a while that we think we can elucidate very specific binding domains of LRP1, but we haven’t needed to do that for spinal cord injury, because you're only treating (patients) for a short period of time after the injury. A broad-spectrum antagonism of LRP1 is a perfectly fine approach. But if you want to treat something like Alzheimer's, which you're treating for decades, shutting down a receptor that's as abundant in the body as LRP1 is not necessarily a great idea. The Holy Grail for this family of receptors would be to block specific interactions and leave other interactions intact. And that's really what we've demonstrated that we have the ability to do with our screening platform. We can elucidate very, very specific domains of interest to precise interactions and disrupt those without interrupting other important interactions that are important to basic biology.
2) How supportive were your PIs in starting Novoron? What is their involvement now?
Jeff (postdoc advisor) was an amazing mentor. When I was getting ready to graduate and I knew I would be doing a postdoc with him to continue studying LRP1 in spinal cord injury, we were already submitting SBIR grants for Novoron. We were trying to try to get SBIR grants so that we could actually launch the company before I even graduated. Steve’s lab (PhD lab) was mostly pathology focused, I was the only neuro project, so he had told me, “I want you to know you have my blessing to keep working on it wherever you go.” And I was obviously very excited about that. But it was really hard in postdoc interviews to find people that were open-minded to me doing that. They were interviewing me to do their stuff. While interviewing, I met Jeff at a seminar, and I knew he had started a couple of companies of his own. His thing is eye regeneration. One of his big, bold projects is being able to do eye transplants and regenerate the optic nerve, which has a lot of parallels to spinal cord regeneration. I thought it was an excellent opportunity for me to learn from a mentor who had also done startups, learn another model of CNS nerve repair, and learn more about regenerative neuroscience. And he was extremely supportive and excited to also mentor me on the entrepreneurial side. I was working in this hybrid postdoc role, and eventually, when Novoron got grants, I basically transitioned out. Jeff stayed on as an advisor. He's a brilliant guy, and he was extremely supportive. The postdoc was synergistic in supporting the growth of Novoron.
Steve is a very successful clinical pathologist in addition to running a successful research lab, but he doesn't have experience in startups. There wasn't a lot of good synergy with him starting the company and he had a whole department to run so he's not formally involved. But he is an inventor on the original IP, so he's obviously got a stake in the success of the company. There were also some mismatched expectations of what equity he thought he should have in the early phases, given that the project and IP had originated from his lab, which complicated discussions of his founding involvement. I think these are really common misconceptions for first time founders and PIs and those are conversations that can be tough to navigate, but since launching Novoron, he has been very supportive.
3) Was spinning out a company a goal you had coming in to graduate school?
Absolutely not. I did not want any part in it. There was a grad school classmate of mine, Taylor Bright. We were both in the same PhD program, and he had actually come to grad school with a main focus of getting technology out of universities and into the private sector. He had tried on a couple of other people's projects to try to help them spin out ideas. And when he heard about my project, he thought it was a really good opportunity to do that as well. He approached me about starting a company, and I was like, “Absolutely not. I don't even have a PhD yet. The last thing I should be is a CEO of a company.” And for about a year, he was trying to nudge me towards doing it. One year, I was watching March Madness with Taylor and my other friend, Shawn Gahr, who's my third co-founder and they ganged up on me until I finally agreed to start the company.
[On why he felt like he was the best fit for CEO]
I mean, initially it was just because I was the only person to do it. It was necessity. I was writing the grants, being the PI on the grants, and then the company was really just me and Taylor. Shawn was a co-founder in terms of equity and his contribution, but he didn't have the bandwidth to be full-time with Novoron. It was really just me and Taylor initially. Taylor was the COO and I was the CEO. And just sink or swim, you got to make it work, right? It was never about me feeling like I was the right man for the job. It was more like I was the only person for the job and then I just had to figure it out.
4) Did you have a patent for your technology? What was it like working with the tech transfer office to license out your IP? Do you still rely on your initial IP?
We filed the initial IP much earlier. It was like 2010 or 2011 (Novoron was officially started in 2013). My boss had not filed patents before. We hadn't published yet, but somebody in UCSD’s Tech Transfer caught wind of what we were doing and they approached us. They thought what we were doing was interesting and that we should file some patent protection on it. And I was like, “That's awesome, let's do that.” I had no idea what it even meant. I helped them write the initial disclosure and I eventually helped them write the PCT phase, et cetera. At the time, I just thought it would be cool, I thought it was a fun thing. It's like a publication, but a little bit cooler. It wasn't until it was probably two years later that we thought about licensing the technology. We actually didn't even try to license the technology until we got a hit on an SBIR from NIH. And when the SBIR got funded, they (NIH) basically came to us and said, “Okay, you have to license the technology now.” That's when we came back to the university and said, “We'd like to license this.” That was not a fun process. The UC system in general has always been notorious for being difficult with tech transfer, primarily for small companies and spin outs because they tailor a lot of their tech transfer business towards big pharma companies who are able to write big upfront checks, which we obviously could not do. So being able to write license terms that don't cripple the company financially, and allows them to develop the technology further is not something they were particularly excited about doing. It took us a while, six months to a year to negotiate, and honestly, it wasn't a great deal. We’ve renegotiated the deal since then.
The licensing process was pretty tough, but then as soon as we got it all figured out sequestration hit, which immediately slashed our budget timelines. It was tough because we finally got the green light to go ahead because we had gotten the license, but right out the gate, Novoron almost died because our two years of runway got slashed to one year at about ⅓ of the original budget. But the expectations on the work we were supposed to perform (for the SBIR) didn't change. We're actually pretty lucky to survive that.
[On the importance of initial IP]
We now have additional IP on top of that. The original IP is old enough now that it's no longer that we look at it as the ‘breadwinner’ IP. It's more like it's the foundational IP that enables everything else that we've done. And so as long as it's under protection, we have to own it so that nobody else can.
[On the terms of the IP]
I think we did about $15K upfront. It was a lot of milestones and maintenance fees. If you actually do advance the technology to a point where you created value, the milestones are actually pretty manageable. What was egregious and was the part we had to get out from underneath was the maintenance fees. The maintenance fees were independent of progress and escalated over time to the point where at some point, they get to, like, $50,000 a year. And those fees were based on a schedule. That's the same schedule whether it's an oncology drug or a device or a diagnostic or a spinal cord therapy. And the reality is, none of those things are the same. Their timelines aren't the same. When we got to 2019 and we started having these absurd milestone payments that we couldn't pay, it would have crippled us. We basically came back and said, “We have no problem with the milestones, we have no problem with royalties. But you've got to get rid of these maintenance fees because they're just arbitrary.” They already bill us for legal fees, so it's just this arbitrary dollar amount that they throw on there to nickel and dime us. We did successfully negotiate out from underneath the maintenance fees, which is to the credit of the Tech Transfer Office for being willing to do that.
5) Let’s talk about the logistics of how you got Novoron up and running. How did you find a lawyer, incorporate the company, find people to hire, and find lab space?
In terms of incorporation, we got really lucky because one of our early advisors was Eddie Rodriguez, who at the time was the founding partner of the San Diego branch of (the law firm) Mintz Levin. He helped us navigate the legal, IP, and incorporation, and he ended up charging us the same as using a paralegal. For finding space, we grew up with this group of companies that came out of this group called Scholar Nexus. Several guys from the same PhD program as me, Nate Heintzman, Will Alaynick and Jose Morachis, had started Scholar Nexus as an incubator to help people spin out tech from UCSD. They had spun out their own company too, at the time it was NanoSort, and now it's NanoCellect, which is one of the big flow cytometry companies in the area (San Diego) now. They had a small amount of space at Allele Biotech and they basically let us use a bench for a little while until we moved to JLABs (Johnson and Johnson’s incubator space). And we moved into JLABS when it opened, it really changed the face of San Diego innovation because it really does bridge the gap that allows companies to get started. It used to be that startup companies in San Diego could only raise money from Boston or San Francisco, and those investors wanted you to move to one of those cities. There wasn’t really the ability to stay and thrive and grow in San Diego and JLABs really changed that.
[On finding people to hire]
And then in terms of hiring, if I'm being really honest with you, one of the first big mistakes that I made was in hiring because I just scoured LinkedIn for people with the right pharma experience. We interviewed them but didn't really know them. For early hires, I think personal connections and references matter because you want to have a lot of confidence in your early hires. They need to be people that are not only competent, but who will fit in. For the culture of a startup, they're going to have to be willing to hustle and wear multiple hats. When I hired someone with experience from big pharma, diversifying and thinking outside of their old responsibilities was tough. The most successful hires we've had been personal connections and references. Don't get me wrong. Now that we're a little bit bigger, we've done big job postings and interviewed dozens of people. And that works. It's just when you're first starting, you don't have the bandwidth for that. You also don't have the cash for that. Like, you can't recruit from outside the city because nobody's going to move here to work for a start-up. When you're first starting off, I would really try to rely on your network.
[And how many employees do you have right now? And are you still pretty involved in ultimately deciding who comes on?]
Very much involved with who comes on. I'm kind of the final decision maker, although I try to make a democratic process. In San Diego, we have 13 employees. We have two people in Kentucky who are working with the University of Kentucky on our spinal cord program, and we have one person in Australia working on our remyelination program and we are about to hire another. So right now we're at 16.
[On outgrowing JLABs and moving out of an incubator]
So we were at JLABs for a while. JLABs is supposed to be like two to three years, and then you move on. I think we were there for six. And so it just came to the point where they're like “Guys, you're literally our longest-tenured company here. It's probably time.” And so we moved into BioLabs, which is another great incubator here in San Diego. But with this last round of financing we're now looking for our first private lab. Incubators make a ton of sense of the small size but they don't scale well. Every headcount that you add, it starts to be less and less efficacious to be in an incubator space. At our size, as long as you have the runway, as long as you have money in the bank, this is when you really want to start looking for your own space. But I think we are lucky here in San Diego to have places like JLABS and Biolabs.
6) Novoron’s lead asset is for spinal cord injury, but you also have several other programs. What do you consider when bringing on a new program?
Bandwidth really becomes the most important, to be honest with you. When we were supported by grants, taking multiple shots on goal was just an opportunity to make sure that we are keeping the company funded by getting multiple different diverse grants. We’ve gotten great data for a lot of indications, but have ultimately been focusing on spinal cord injury and remyelination. The Tauopathy stuff was really just too big of an opportunity to pass up. It also really forced us to get our new platform polished up. Going forward, we have a much more regimented and disciplined approach to how we do this, much more than in the past, because now we have a platform and that platform has dozens of potential indications that could spin out of it. Our vision is that we will use the platform to screen three to five indications at a time, and that based on the strength of the data and clinical path, we will pick one to two indications a year. As programs progress, it opens up bandwidth here to start doing another discovery program. So we're thinking like every six to twelve months is when we will try to onboard a new program based on other programs either falling off or advancing to the point where the core team here in San Diego isn't working on them day-to-day.
7) How did you find your investors and establish those relationships?
[On investors’ willingness to invest in neuro companies]
Spinal cord injury is one of the riskiest areas. But in terms of risk aversion, institutional investors, VCs, private equity, angel investors, whatever, their risk tolerance really goes in ebbs and flows. So there was a time in 2020 when people were loving neuroscience because the upside is huge. Everybody knows the upside is huge. So people were willing to take bigger risks on that upside. Now the markets contracted quite a bit and people don't want to take any risks and that makes neuro tougher. In 2020 there were a lot of neuro companies that were raising a ton of money off preclinical data. Now for neuro companies, you probably need clinical data to be able to get a good Series A. There's always going to be unicorns or people that really align with your vision out there. We were lucky.
[On finding Novoron’s lead investor for their seed round]
We found a great investor in Two Bear Capital. As long as they believe in the science and they think it's a worthwhile cause, they're not so much beholden to the whims of the market. They were always believers in what we were doing. When everybody else was contracting and saying they didn't want to invest anymore, Two Bear said they wanted to keep this going. The science is still good, everything's making progress. What I really respected about them is other VCs were saying, “Here's what we're going to give you money to do and when you get to this point, we want to invest again.” But then the market changes and they move the goal post. And a lot of good companies will die because of that, because they raise money to get to a certain point and when that point moves, the money doesn't change. And so I think Two Bear has been great because they've always recognized that as long as we're delivering on the milestones that we promised, it's still a worthwhile investment. And so I think that we've been very lucky in that sense to have investors that have supported us so that we can keep doing what we do.
8) Novoron has received several NIH SBIR grants and also has raised a seed round. How did you decide between taking non-dilutive and dilutive funding?
The really oversimplified cost-benefit ratio is that the non-dilutive funding is great because it doesn't cost you any equity, but it is slow and it is super time-consuming. When we were grant dependent, 50% of my job was writing grants. With dilutive funding, the con is that you have to give up equity and you have to kiss a lot of frogs before you find a prince kind of situation. But you get much bigger checks and you get more runway, you’re not having to go back to the well every year. We got lucky because Two Bear had invested in another company that we had started a strategic partnership with. We got years of exposure to Two Bear just based on that collaboration. They were really familiar with what we were doing well before we started looking for fundraising.
There's this expectation that to raise a good amount of money, you have to meet with 50 to 60 VCs a year, which is insane, right? You're doing a non-confidential pitch deck, maybe a 15-minute presentation, and then they're basing their entire judgment of you as a company on that. If you're lucky, you can get to the diligence process. They’re seeing hundreds of opportunities and it becomes very superficial, like who can make the best pitch deck, who's the best salesman. Our long relationship with Two Bear gave them the ability to get a deeper insight into what we're doing without it having to be this quick back and forth and going through this stepwise process. We needed an investor that was interested in what we were doing, which Two Bear was. So to be honest with you, it's a very unique story. It wasn't just like we were sending out pitch decks and we met with them and we went through a standard process. So who knows, maybe if it wasn't for them, I still wouldn't know how to raise money.
9) Why is creating an inclusive company culture important to you and what do you do to promote that?
I always make sure that we bring in for interviews a diverse candidate profile. During grad school and even my postdoc, I participated in the STARS program (undergraduate research program at UCSD for underrepresented groups in STEM) and other mentorship programs that tried to give opportunities to underrepresented groups in STEM. Let's be honest, I'm a white guy, but I come from a Cherokee background. I'm actually a registered member of the Cherokee Nation. My grandparents are very much tied to the struggles that come with that. So I've always been very sensitive to the fact that there's almost no Native American representation in STEM.
A lot of issues around inclusion, both from a gender and ethnicity perspective, a lot of it is just about wealth and generational wealth. White men in America hold a ridiculously disproportionate amount of the wealth. For me, because I didn't come from a family that had proximity to wealth, I feel like I am a good example of somebody who had to work disproportionately harder than other people who have more proximity to wealth, and that also means more scrutiny of the idea and if it’s good enough. Don’t get me wrong, I grew up comfortably middle class, but it can sometimes be shocking how many startups are initially funded in the millions of dollars by “friends and family” rounds. Who has friends and family with millions of dollars to spare? If Novoron is successful and creates a new spinal cord injury drug or a new tauopathy drug, it would be very sad if that had never been able to happen just because the barriers to that technology were arbitrarily higher than they would have been with somebody that had an inferior idea, but more proximity to capital. The little guy has to be better to compete, but we should be invested in the little guy if we want the best ideas, and not just the ideas that know rich people.
So that's, to me, why I feel like it's not altruism. To me, it's about if we're going to live in a true meritocracy, we have to stop allowing a perpetuation of a proximity bias in terms of wealth or comfort to allow us to view innovative opportunities differently from one person versus the next. And that won't happen until we equal the playing ground. So as much as I would love for everybody to just be blinded and have everything be anonymized in terms of how we evaluate technologies, I can't change the way things are. But what I can do is try to make it so the playing field is not as lopsided by giving people opportunities.
I mean, honestly, that's why the greatest federal institution in the history of the globe is the NIH. They're not perfect, there's a lot of bureaucracy. We all know that there's gender bias. We all know that there's racism. But for the most part, I've sat on those grant committees, and, at least in those committees, it's scientific ideas on a piece of paper that you decide on the merit of and current policies at least make you confront potential biases in review. And that's why I think that one of the greatest equalizing forces in terms of innovation really is the NIH. And honestly, I do believe that's one of the things that makes America unique. We still remain the single obvious driver of innovation on the globe. It's because nothing in any other country comes close to the NIH or the NSF. So I just wish that we had more of that kind of mindset in terms of how we did private investments.
10) How has your day-to-day role shifted over time?
It's changed a lot. And I don't love it. I still consider myself the inventor. I was the scientist who discovered all this stuff, and now my team doesn't let me touch pipettes anymore because I'm a liability in the lab now being so out of practice. It’s funny because what makes you successful in science does not prepare you for what that success leads to, like being a CEO (or even a PI). There was nothing in my training that gave me the skills to do the CEO gig, the customer discovery, the conversations with business development, intellectual property, team culture, mentorship, management, none of this stuff. For me, I have to continually be developing the strategy of how we get a drug to the clinic. And a big part of that is who are our strategic partners going to be? Who's our pharma partners going to be? What type of IP do we need? What are the data packages that people are going to be interested in? It’s never boring, but its a lot.
I still am very much involved, as much as I can be, on the scientific strategy. But I'm constantly feeling guilty because I don't get to be there on the day-to-day stuff as much as I want to be. I would love to be able to spend 50, 60, 70% of my time in these scientific discussions and working through the cool problems that are what I was passionate about to start this company in the first place. But a tremendous amount of my job is continuing to look at how to raise funds, create strategic ties, do the business development, generate good IP, and honestly make sure that the culture of the company is conducive to the type of innovation that I want to do here. In the beginning, it was just about doing the best science, and now I just have to hire good people that I trust to carry that torch for me. And then it's my job to support them and make sure that they continue to have the resources and the best path to that stuff, getting to where it needs to be.
11) What is a skill you had to develop since starting Novoron and what was the most useful skill you brought with you from doing a PhD and postdoc?
The project management aspect has been the hardest for me. I am not a good enough adult to manage this project. We just hired a project manager, and I'm already so excited to have them on board. So that's the easy answer. Project management was my biggest lack of skill.
I would say that the biggest skill that I brought in, it’s probably not even a skill, but the one thing I brought to the table that has been the most conducive to us being successful is passion. I think when we do get traction with people, they always say that the thing that hooked them the most is that I actually believe in what we're doing. I started this company because it was the only way for this project to not die. And I literally could not live with the idea that we might be able to help people walk again and then walk away from that potential. I just wouldn't have been able to live with myself. So it was very easy for that passion to come across because it was kind of like this desperation of not wanting to have to face that regret.