A Research Nonprofit Shutters TB Vaccine Effort and Lays Off Scientists
Dr. Casper said that the institute was also speaking to research institutions to relocate the work, and was also looking to license technology like the vaccines to ensure the research could continue elsewhere. “We’ve made it very, very transparent to all of our investigators in our departmental programs that we want to do everything we can to enable their work,” he said.
Since its founding in 1993, the research institute has positioned itself as a nonprofit that operates like a biotech company, with a mission to bring new products to market for neglected diseases like tuberculosis, leprosy and leishmaniasis, a parasitic disease found mainly in the tropics. Early in the institute’s history, Dr. Reed and Rhea Coler, the head of the tuberculosis vaccine program, played a role in the development of the GlaxoSmithKline vaccine. The institute also focuses on developing adjuvants, which are used in some vaccines to stimulate the body’s immune response.
But like many nonprofits, it has struggled to stay afloat. With revenues of $23.6 million in 2017, it operated at a loss of about $4 million in 2017 and 2016, according to Internal Revenue Service filings. In 2018, its filings showed, it operated at a smaller loss — about $47,000.
Former executives and board members at the institute pinned much of the blame on Dr. Reed, whom they described as a passionate scientist but expressed concerns about his financial stewardship and potential conflicts of interest, including ties to for-profit companies to which the institute had licensed some of its technology.
In the spring of 2018, the institute’s chief financial officer, general counsel, board chairman and two of its other board members resigned.
“One of the concerns was that nobody really seemed to understand how the money was coming in and how it was being spent,” said R. Douglas Bradley, the general counsel who stepped down. He said he did not see evidence that Dr. Reed misused funds. “There was a moment where it was just clear that his behaviors were not going to change.”
Dr. Reed said he never did anything improper and acknowledged that keeping the organization going had “been a challenge for many years, but we’ve always met the challenges.”