It’s rare that a company comes out of nowhere to dominate an established industry, but WIRB Copernicus Group, a company with a 30-person headquarters in Carnegie Center, has done just that. At the beginning of 2012 WCG did not exist. By January of this year, the firm said it was playing a key role in the pharmaceutical industry, providing ethical and regulatory oversight to 70 percent of all clinical trials for drugs submitted for FDA approval in the country.

For Donald Deieso, CEO of WCG, building the company was not a matter of starting from scratch, but of buying the existing largest players in the business. It all started in 2011 when Deieso went to work with Arsenal Capital Partners, a New York-based private equity firm. “We were quite interested in investing in healthcare companies,” Deieso says. “So Arsenal put together a team of healthcare professionals. Our goal was to build a healthcare practice.”

Deieso, who has an engineering doctorate from Rutgers, is a former Rutgers professor and industry veteran who ran eight publicly traded life science, healthcare, and technology companies before joining Arsenal. He began putting together companies that served the pharmaceutical industry, but which themselves did not undertake the costly risks of developing new drugs.

“Our business model is to serve the pharmaceutical industry by making the development of drugs less costly and more expedient through the many services we deliver,” he says.

The main service WCG provides is to furnish clinical trials with institutional review boards. IRBs are the groups of experts who decide whether scientific research using human subjects is ethical. Typically, IRBs are composed of scientists, academics, doctors, sociologists, and even clergy members who evaluate proposed studies with a view towards safeguarding the rights of the human subjects.

In the United States no study using direct or indirect federal funding and human subjects can proceed without the approval of an institutional review board, so they are a major factor in both the speed and cost of clinical trials. IRBs are a relatively recent innovation in the pharmaceutical industry and can trace their origins back to unlikely roots — the war crimes tribunals of Nuremberg following World War II.

The postwar trials brought to light abuses perpetrated by Nazi researchers, who performed medical experiments on unwilling concentration camp prisoners. The experiments were tantamount to medical torture and often killed or maimed the test subjects. Doctors hit subjects with hammers, froze them in ice water, infected them with diseases, exposed them to poison gas, burned them with incendiary weapons, and committed numerous other atrocities.

Determined to never let medical professionals act in such a way again, two American doctors proposed a set of rules called the “Nuremberg Code” that required researchers to obtain informed consent from patients and not subject them to unnecessary pain and suffering. That code was never adopted.

Unethical medical experiments continued, even in the United States. The U.S. government was notorious for cruel and harmful Cold War-era experiments. The CIA, in a secret project called MKULTRA, gave LSD to unsuspecting test subjects and observed the effects. Other government agencies exposed subjects to radiation. The U.S. Public Health Service even withheld penicillin from black men who suffered from syphilis in an experiment that ran from 1932 all the way up to 1972.

The National Research Act, passed in 1974 in the wake of reporting about these abuses, created the requirement for IRBs.

“Proper balance between risk and benefit would have to be established,” Deieso says. “And you couldn’t trust that decision to those that had the greatest to gain, like drug companies. Third parties were institutionalized to study those clinical trials,” he says.

IRBs already existed at some institutions but weren’t mandated by law until that point. Most organizations conducting research used boards that were part of research institutions, or independent nonprofit IRBs.

Western IRB — the largest company to be taken under the WCG umbrella — started off as one of the latter. According to a company history, WIRB was founded in Olympia, Washington, by Angela Bowen in 1968 to oversee her endocrinology research. The board began overseeing other scientists’ projects and incorporated in 1977.

As research regulations grew more strict in the early 1980s, WIRB became a for-profit company and greatly expanded its operations to include international clients as well as many large drug companies. In 1996 the company began offering its services to institutions such as large universities. WIRB says it is the largest company of its kind.

Arsenal bought up WIRB along with North Carolina-based Copernicus, the second-largest company in the field, in 2012, to form WIRB-Copernicus Group. The group soon acquired five other companies, all of them in the field of pharmaceutical services.

“We didn’t start this from ground zero,” Deieso says. “We put together the largest and best companies with the finest reputations.” The other companies in the group are IRBNet, a web-based research management application; Midlands Review Board, a Overland Park, Kansas-based IRB company, Aspire Independent Review Board, a woman-owned IRB based in San Diego; New England Independent Review Board, a Boston-based IRB company; and ePharma Solutions, a clinical trial consulting company.

The common purpose behind all the WCG companies, Deieso says, is to make drug development safer and less costly. And there is no doubt that such a service is badly needed.

Forbes magazine recently divided 100 pharmaceutical companies’ total research budgets by the number of drugs approved, and found that on average, across all the companies, each product brought to market accounted for $5.8 billion in spending. Some companies were spending as much as $11 billion on research for every successful drug that went out their doors, and even the less costly drugs were north of $100 million. The entire industry spends an astounding $150 billion a year on drug development.

Deieso says he chose Princeton as the headquarters of the company because it is near so many potential clients — with Covance, Inventiv, Bristol-Myers Squibb, Novo-Nordisk and Johnson & Johnson close by, Princeton is a good location for companies that want to cater to life sciences companies. (It also helps that the move for Deiso from his previous company was a short one — he was formerly in the same building as his current office at a company called Eduneering, where he was CEO.)

The companies that make up WCG are also located at research hubs throughout the country. With its broad reach, WCG now oversees about 11,000 clinical trials a year at 1,300 institutions and has about 550 employees around the world. Deieso says WCG companies oversee IRBs at every major hospital where clinical research is done.

In December WCG signed a deal to provide regulatory and ethics reviews to Cancer Treatment Centers of America, a cancer research organization with hospitals in Atlanta, Chicago, Philadelphia, Phoenix, and Tulsa. WCG has an oncology division that specializes in cancer research.

“Cancer trials are becoming more and more complex,” Deieso says. Cancer treatments increasingly involve not just one drug, but “cocktails” of different drugs, in addition to new immunotherapy treatments that turn the human immune system against cancer cells. Other research is exploring the genetic underpinnings of cancer. All of this means more regulatory and ethical complexity when running a clinical trial.

New areas of ethical complexity are arising all the time. For example, technology companies have created new ethics battlegrounds with their use of consumer data to run experiments. Facebook drew the ire of its users when it performed an experiment to see whether it could manipulate the emotions of its users by increasing the proportion of positive or negative items in their news feeds. Although the experiment showed only a negligible effect on the 689,000 users chosen to participate, many ethicists objected to running the experiment without providing informed consent to the users.

“I think the digital world is opening up a whole new frontier that we’re all coming to grips with and trying to understand,” Deieso says. “What most people don’t know is that when you register and log on to that software, in fine print it says that you have actually assented to letting them have your data.” Deieso wonders if the clicked-through but never-read user agreements truly give companies the right to experiment on users in this way. “It’s not like letting people with syphilis die, but it is intrusive,” he says.

Another area of debate in the world of IRBs is “broad consent.” Traditionally, test subjects allow researchers to look at their data for particular experiments. But increasingly, researchers have been gathering DNA and other information of the people they study and building large databases that can be used for all kinds of research.

A more traditional quandary that comes up in IRB deliberations is risk versus benefit. How much risk is acceptable in medicine? For example, Deieso says, face transplants are new and incredibly risky procedures, and the gain is only cosmetic. But various IRBs have allowed several surgeons to perform face transplants on people who were disfigured in accidents.

“IRBs have taken a position that there were ample instances where the individuals were so disfigured that they chose to take their lives. It’s interesting from an ethical point of view because without the surgery, there is the risk that the individuals would terminate their lives, and that offsets some of the risks of the procedure.”

The dilemma goes back to the roots of scientific medicine. Paracelsus observed in the 1400s that even medicine can be toxic in large enough amounts, famously saying “The dose makes the poison.” Deieso says ever since, pharmacology has been a balancing act to find the fine line between the two. “The whole point of science is to determine that point,” Deieso says.

The idea of a for-profit company being hired to provide an independent IRB is not without its critics. There is an ongoing debate among bioethicists about whether companies like WCG should oversee the ethical performance of companies that are paying them. Professors Trudo Lemmens and Carl Elliot have argued that commercial IRBs have “a fundamental conflict of interest” because their clients have a direct financial interest in obtaining drug approvals.

But Ezekiel J. Emanuel, a bioethicist and Penn professor (and an advisor on Obamacare), says there is no evidence that for-profit IRBs perform poorly compared to their nonprofit counterparts. He notes that WIRB was the first organization to achieve the highest level of accreditation from the Association for the Accreditation of Human Research Protection Programs. He also says for-profit IRBs are subject to the same regulations and oversight as nonprofit IRBs.

But overall, the strategy of WCG is to deepen, rather than broaden its reach. Deieso says he has no plans to corner the market by buying more IRBs. “We’re happy with our growth,” he says. “We are much more focused now on expanding our services so our clients can benefit from more of a single solution that can accomplish more and more of what they do.”

WCG is now “looking at ways to help researchers be administratively more efficient,” Deieso says. “In a drug trial there are hundreds and thousands of hands involved,” he says. “They may have hundreds of trial sites and can be conducted by 100 or more individual physicians and 100 or more staff, and thousands of subjects. Can you imagine how much paper is created?”

One of WCG’s emerging services is to replace that massive paper trail with electronic records. WCG’s recent acquisition, Plymouth, Pennsylvania-based ePharma Solutions, is in the trial management arena. “We are very interested in moving clinical trials into the digital world,” Deieso says.

Another area of expansion is WCG’s biosafety division. In July the company bought Alliance Biosciences, a Richmond, Virginia-based company that specializes in overseeing safety, the handling of dangerous materials, regulatory compliance, and lab design.

“Our division has experts who specialize in the proper care and management of hazardous organisms — not just smallpox but Anthrax and the H1N1 flu.” While such samples are dangerous, Deieso says, they are also necessary to keep around in order to study or even to “weaponize” against diseases. Deieso says modified viruses could prove to be an extremely effective drug delivery mechanism. “Viruses are magnificent machines,” Deieso says. “They are able to mutate quickly. To capture that capability of a virus and turn it into good is a goal of clinical research.”

Genetic research also poses lab safety challenges, Deieso says. Researchers must be careful not to release modified DNA into the environment. “This segment of the market is growing in a quite dramatic way,” Deieso says.

Deieso’s background didn’t seem likely to point him for a career in biotech. He grew up in Elizabeth, and studied engineering at Manhattan College (and later environmental engineering for a doctorate at Rutgers) and music at Juilliard. He had always had an interest in engineering, going back to his father, who was an engineer. But he describes music as the true love of his life. He was an avid trumpet player in college and later served on the board of the New Jersey Symphony. “One of my greatest joys is just playing for myself and perfecting my skill,” he says.

Deieso is married and lives in Princeton. His daughter Cara works at WCG as a senior vice president of marketing.

Although he is still a lover of classical music, Deieso says he has discovered a passion for his work in drug research. “One thing that’s a shared trait at this company is the desire to make a contribution,” he says. “Everyone here, if you ask them what they do and why they are here, will say they want to transform healthcare. Most people here have stories about family members who have had healthcare adversity, or diseases they have succumbed to. This is one of those unique opportunities where you can use your energy to make a difference. That’s what drove me. I’ve become devoted to public health.”

WIRB Copernicus Group, 202 Carnegie Center, Suite 107, Princeton 08540; 609-945-0101. Fax, 609-799-2216. Donald A. Deieso, CEO. www.wcgclinical.com.

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