diff --git a/e2e_tests/setup.sh b/e2e_tests/setup.sh
index 7a7556801..d7f80826f 100755
--- a/e2e_tests/setup.sh
+++ b/e2e_tests/setup.sh
@@ -1,13 +1,15 @@
 #!/bin/sh
 
 # Example values of environment variables ACTIVE_MODEL_VERSION=7.1.3 ACTIVEGRAPH_PATH=../ E2E_PORT=7687 E2E_NO_CRED=true
+
+rm -r myapp
 gem install rails -v $ACTIVE_MODEL_VERSION --no-document
 
 if [[ -n "$ACTIVEGRAPH_PATH" ]]
 then
   sed 's|.*gem '"'"'activegraph'"'"'.*|gem '"'"'activegraph'"'"', path: "'"$ACTIVEGRAPH_PATH"'"|' docs/activegraph.rb > template.tmp
 else
-  sed 's/.*gem '"'"'activegraph'"'"'.*/gem '"'"'activegraph'"'"', github: "neo4jrb\/activegraph", ref: "'"$1"'"/' docs/activegraph.rb > template.tmp
+  sed 's/.*gem '"'"'activegraph'"'"'.*/gem '"'"'activegraph'"'"', path: "."/' docs/activegraph.rb > template.tmp
 fi
 
 rails \_$ACTIVE_MODEL_VERSION\_ new myapp -O -m ./template.tmp