Making a drug company is really fucking hard. But it shouldn’t be impossible.

The economics of biotech are broken- making drugs just isn’t that valuable today. XBI has been flat for over a decade. No bio co started in the past 20 years has cleared $40B market cap. The business model doesn’t work (your average seed stage bio co will never become a full-fledged, independent drug company). Chinese biotechs are more of a threat to US pharma than home-grown US biotechs.

Technology-centric biotechs are important but don’t change the macro state of the industry. There will continue to be capital-intense, risk-on startups that get acquired by large Pharma’s (thereby directionally molding the types of technologies we work on). Something needs to change.

Need two things: Consolidation of many small biotechs towards concentrated swings with the explicit goal to create modern day, global Pharma’s (critical mass of thoughtful assets, translation capabilities, access to deeper pools of capital that bridge over to drug commercialization).

Why is this important:

Bio landscape inflation = too many companies housing 1 - 2 assets, competing for the same pool of capital. Leads to many corporate vessels that are basically hedge funds leveraging binary readouts per drug.

Lack of fresh Pharma companies = trickle down of the problems we (the biotech industry) focus on. White space drugs (huge, non-incremental efforts to change human health) will remain hung out to dry when time comes to actual late-stage developing and launching drugs. SV can only support so much (R&D; seed - series A/B). Who shows up to write the $1B+ checks that are necessary in drug development? Companies need to think pragmatically about this/find a workable solution in today’s reality, not bank success on shifting governmental infrastructure/policy (although this would be great, it’s not an action plan for a company). Beyond the long term independence to make non-trad swings, fresh pharma’s can build out better translational vehicles (finding & testing the right pharmacology and modalities for drugs) Shift drug development from human science experiments to strategic bets that aim to eliminate all risks but the key: does modulating xyz improve the human condition?

What I want to build: Modern day Pharma co (drug company with the financial independence to impact human health without being beholden to the tastes and risk appetite of trad Pharma today). What if Pfizer were built today? What would we double down on? What would we change? As a startup, you are limited in scope of things you can work on and build through to the end (the tail can’t wag the dog). Need US attempts to build global pharma’s to rival those of China’s, or else we will be overtaken in biopharma innovation.

How & where to start:

Stack the odds of launching a drug in a Rx area with blockbuster potential to underwrite next-gen R&D pipeline. Ideally, in an area that gives unique edge against Pharma incumbents. What is different about how you start that uniquely enables you to grow into an independent company? Spend & raise with that as the north star. Mitochondrial dysfunction therapeutics (start with skeletal muscle / metabolic)

Platforms don’t really work to launch enough drugs for a Pharma. Better to accept bio is unpredictable and build a resilient vehicle to cherry pick and test drugs based on well-known underlying pathology. Can adopt new platforms if technology outpaces our understanding of science.

The actual translational breakthrough from aging research: mitochondrial dysfunction is an aspect of many chronic diseases. Most drug dev efforts around mitochondrial drugs develop for genetic diseases (where there is something intrinsically wrong with the mitochondria, rather than the gradual lower efficiency). But the latter is where this technology is likely more impactful to actually correct the disease phenotype. There is a major breakthrough in our ability to modulate metabolic rate & mitochondrial function. Most people are only applying it for obesity, but this may have diminishing returns for weight loss (body may compensate by eating more). There are many other chronic diseases where these technologies should be applied.

1. Acquire and develop drugs that directly restore mitochondrial function (not indirectly via signalling pathways). Example = chemical uncouplers.

2. Pinpoint diseases where mitochondrial dysfunction is the driving mechanisms behind the pathology.

3. Who is the core team?

Build a resilient drug company than take bigger, bolder swings on indications and commercialization based on good science.

My worst fear: working on a really hard but meaningful problem for human health but focused on the wrong level of abstraction (many varying levels of ‘solving’ biological problems) & it never makes grows into fruition.