Where are all the trillion dollar biotechs? asked Lada Nuzhna in her rarely updated blog. I will paste only the conclusion but the entire post is thoughtful and well-documented:
Drug development, like any other industry, is greedy - it addresses the most tractable diseases with the biggest outcomes first. Genetic targets, clear biomarkers, and one-pathway wins gave rise to the biotech boom of the 70 and 90s, when recombinant insulin, monoclonal antibodies, and early gene therapies created a sense of an endless frontier. Unlike with other industries, reinvesting capital from those early wins back into the ecosystem didn’t accelerate industry’s progress – we’ve been on a reverse trend for a while now. Today, remaining problems resist the very playbook this industry was built on.
Most industries have eras when progress stalls before a new paradigm unlocks scale again. Electricity needed transmission grids, computers needed operating systems, and aviation needed jet engines. For biotech, whether the shift will come from new modalities, new regulatory frameworks, or entirely new ways to validate efficacy in humans is not yet clear, but we can, perhaps, outline the boundaries within that future will exist: manufacturing and trials should get cheaper with each run, regulations should become more adaptive, approval frameworks should increase and not decrease in variance, and new therapeutic modalities should focus on unlocking new biology, not just producing slightly better iterations on problems we already know how to solve. Until those new paradigms take hold, building a trillion-dollar biotech will remain caught in Lewis Carroll’s logic: running as fast as we can just to stay in place, and twice as fast to make any real progress.
Note that “trillion-dollar biotech” is (hopefully) just shorthand for a company that produces truly world-changing drugs, and is rewarded accordingly by the all-knowing all-seeing Mr Market to reach a trillion-plus valuation. But if you put dollars first and benefit to humanity second, would that not perhaps contribute to these Alice in Wonderland dynamics? Maybe it’s the gold-digging approach to this decades-long gold rush that caused the shovels to become so expensive, maybe even more valuable than hitting gold. More than that: hitting gold — i.e., developing an effective drug — in this topsy-turvy world can even get you punished.
As Kyla Scanlon stated so succinctly, it is a casino economy now. In biotech it isn’t just now but from its very inception, as I have recently learned, and surely there are downstream effects in this approach to drug development. Again, Nuzhna’s blog post is exceptionally well-written and researched but maybe just maybe the problem deserves to be reframed?