The well-known venture capital firm Andreessen Horowitz has recently set up a pool of money to invest in the biopharma space, which is a new area for them.You can read an interview with Vijay Pande here, who’s been brought in for this effort, and it talks about “computational biomedicine” and “cloud biology” as areas that they want to focus in. They’ve had quite a track record in technology startups; there are probably quite a few of us who wish that we’d helped bankroll the early days of Facebook and Airbnb, just to pick two. But there’s always a null-hypothesis question to ask about successful investors: was this expertise, or a run of luck? (To be sure, there were plenty of people who didn’t invest in these companies). If this was expertise, then, is it transferrable to another sort of industry?
And biopharma startups are another sort of industry, believe it. The folks running Airbnb or Über probably feel that they have a lot of regulatory headaches, since many areas that they’re trying to operate in are unhappy about their business models. Compare that to, say, mobile game development, where you code and test that sucker on your own and push it out onto the market. That’s the sort of thing that appeals to the classic Silicon Valley mindset – a fast, nimble, hard-working team of highly competent people, whose rate-limiting steps are how quickly they can think and how little they can sleep. The sharing-economy companies certainly came from that same greenhouse atmosphere, but dealing with the regulatory demands of many jurisdictions must have felt like running into a hip-deep steam of pancake syrup.
But that is nothing compared to what awaits you in drug development. In this business, you work for years before you can have the tiniest hope of ever selling anything to anyone. And before you can do that, you have to (by Silicon Valley standards) abjectly crawl before the regulatory agencies in the US and every other part of the world you want to sell in. Even to get the chance to abase yourself in this fashion, you have to generate a mountain of carefully gathered and curated data, in which every part of every step must be done just so or the whole thing’s invalid, go back and start again and do it right this time. The legal and regulatory pressure is, by Valley standards, otherworldly. If your new app doesn’t do what it’s supposed to do well enough, it will bomb on Google Play and you’ll have a lot of unhappy customers. If your new drug doesn’t do what it’s supposed to do, you will get off lightly by having it rejected by the FDA so that you never sell it at all. The alternative is to have something untoward show up after it hits the market, in which case you will be hit with so many lawsuits that you’ll think it’s snowing. Law firms will take out cable TV and radio ads, desperately searching to find more people who can sue you.
Arching over all these difficulties is that factor that I’ve spoken of many times as the “Andy Grove fallacy“. That link will take you to longer thoughts on this subject, but the short version is that software and hardware, for all their complexity, are human-built things, designed and annotated by humans. Terence was right: homo sum, humani nihil a me alienum puto (“I am human, thus nothing human is alien to me”). The chemistry and biology of a living organism, though, taken in detail, is as alien as anything we’ve ever dealt with. A few billion years of blind evolutionary tinkering gives you a mass of insane, irrational, tangled interwoven systems with no documentation in sight. Crazy new things keep getting uncovered all the time (siRNA! Who knew!), and the number and scope of the crucial things we have no clue about is just another one of the things that we have no clue about. If your worldview has been formed by using human tools to make human-designed applications for humans, you are in for quite a shock.
So with all these things in mind, I’ve been interested to see what sorts of companies Andresseen Horowitz is going to invest in, and how it’ll work out. The interview linked in the first paragraph suggests that they’re going to avoid actual drug discovery and development, probably for just the reasons described, and look for areas that are more specifically tied to the technology that they know more about. That’s probably a wise move, but there are other ways to sidestep those problems, unfortunately. Reports are that the firm is funding an outfit called Nootrobox (dang, that is an annoying name), which will sell nootropics to the public. Put crudely, they’re flogging smart pills in the nutritional supplement market. This isn’t actually the first investment in their new biotech pool, though – this one was in the works before that got organized, but that link above says that if the timing had been different, that’s where the money would have come from.
It is, unfortunately just the sort of thing I might have expected. The nutraceutical area is very lightly regulated indeed compared to actual drugs, as we all know, so that sidesteps one of the big problems mentioned above. And it’s not like these folks are going to do all that much actual CNS research to figure out mechanisms of action, either. Central nervous system work, as black boxes go in drug discovery, is matte, flat, stealth-bomber black, and many are the billions of dollars that have gone into it never to be seen again. So I don’t expect Nootrobox to do anything of the kind. No, they’re apparently selling “Rise” pills to improve your memory, and “Sprint” pills to give you more energy. This is the sort of thing I see advertised on the subway, next to the offers to learn how to be an HVAC technician – can “boost your immune system” be far behind?
I suspect that part of the pitch for this investment was a lot of stuff about biohacking, which would be an attempt to appeal to the Valley mindset. Take control, push your own buttons, don’t just take what Nature has given you, all that sort of thing. Applying the hacker metaphor to the brain, though, is wildly premature, since we have a pretty good idea of how computers work, since we built them, but we have very little idea about how the brain does what it does at all. So taken together, I have to say that I’m disappointed (but not all that surprised) to hear about this venture.
That, though, isn’t its point. Andreessen Horowitz is a venture firm, so the first question they’ve been asking is whether this idea will be able to deliver a return. From that perspective, I understand the call completely. I think that such a company has a good chance of being very profitable indeed. It’ll have cachet, given its background, and plenty of free publicity. I don’t doubt that its products will sell at a premium – that’s how you’ll know that this is really the good stuff, as opposed to those fly-by-nights who advertise on the subway. And there’s plenty of demand for its products, which don’t really even have to work. No, I think that Nootrobox could do quite well. It’s a pity.
Update: David Shaywitz has thoughts here on the firm’s entire approach to this sector, well worth reading.