00:48:30 · Jordi Hays, Kevin Weil
[00:48:30] S1: Yep. What's what's happening... Like, over the last year, I I I heard some number about how how much, like, US and and and sort of allied pharma companies and allied countries are are spending on, like Chinese licensing, Chinese, like pharmaceutical advancements. Like, what what more can you share on that front? Just how much of like the drugs coming down our pipelines were actually made outside of the country? [00:49:00] S6: I mean, almost all of them had had big parts of their programs that happened in China. It very much rhymes with what we did with the manufacturing industry where in the early days, it's like, it's like a bunch of sensible local decisions where you're like, oh, well, this is low skilled labor. It can happen more cheaply elsewhere, so we'll move it out. And then over time, it it becomes not just low skilled labor, but you know, there's innovation that happens and suddenly our muscles atrophy, theirs grow and all of a sudden we can't manufacture a lot of the things we need. There's this amazing quote from Andy Grove from like years ago when he was running Intel. He said abandoning today's commodity manufacturing can lock you out of tomorrow's emerging industry. Yeah. It happened exactly in manufacturing and it is on the way to happening in pharma and we can't let it.
00:49:00 · Kevin Weil, John Coogan
[00:49:00] S6: I mean, almost all of them had had big parts of their programs that happened in China. It very much rhymes with what we did with the manufacturing industry where in the early days, it's like, it's like a bunch of sensible local decisions where you're like, oh, well, this is low skilled labor. It can happen more cheaply elsewhere, so we'll move it out. And then over time, it it becomes not just low skilled labor, but you know, there's innovation that happens and suddenly our muscles atrophy, theirs grow and all of a sudden we can't manufacture a lot of the things we need. There's this amazing quote from Andy Grove from like years ago when he was running Intel. He said abandoning today's commodity manufacturing can lock you out of tomorrow's emerging industry. Yeah. It happened exactly in manufacturing and it is on the way to happening in pharma and we can't let it. [00:49:47] S0: So with with manufacturing, I remember the story of d... American deindustrialization as driven by two factors. One is what you said, lower labor costs abroad, but two is, it's dirty nimbyism. I don't want the smoky steel mill in my backyard. Let's put it halfway across the world where I don't have to see it or worry about it or think about the pollution. With CROs, is is nimbyism a factor whatsoever? I feel like no one would care, but how how how has that played into it, or has it been a nonfactor?
00:49:47 · John Coogan, Kevin Weil, Richard Starson
[00:49:47] S0: So with with manufacturing, I remember the story of d... American deindustrialization as driven by two factors. One is what you said, lower labor costs abroad, but two is, it's dirty nimbyism. I don't want the smoky steel mill in my backyard. Let's put it halfway across the world where I don't have to see it or worry about it or think about the pollution. With CROs, is is nimbyism a factor whatsoever? I feel like no one would care, but how how how has that played into it, or has it been a nonfactor? [00:50:22] S6: I don't think that's a huge factor here. I think it's been much more of the first that you identified. It's it's the cost, and it's this feeling of, oh, well, maybe this won't be so strategic. And then, of course, it turns out that it's massively strategic. Yeah. We don't wanna lose the ability to turn ideas into medicines here in The United States. [00:50:38] S0: Yeah. So then, on the labor cost, it feels like by leaning into higher volume tests testing driven by robotics, you can be more competitive on the economic side. So I would imagine that within, I don't know what your timeline is, a year or two, like, on on a cost per experiment, you would be competitive internationally very quickly. Correct? [00:51:00] S6: Yeah, and so the, like, just to step back, because I bet a bunch of people don't know how these processes work. So let's say the three of us go start a biotech company. We're going to develop new medicines. We're going [00:51:09] S5: to try and cure
00:51:09 · Richard Starson, Kevin Weil, John Coogan
[00:51:09] S5: to try and cure [00:51:10] S6: a particular form of cancer. You usually start with some biological target, right? We might say it's usually a protein. So we might say, you know, maybe because of Jordy's grad school research, we've got, you you either want to like, you either to accelerate or inhibit some protein. [00:51:28] S0: Sure. [00:51:29] S6: And you've got that idea. You find a molecule that maybe sort of does it, but it probably is toxic or it's not soluble, so the body can't process it the right way, or it's not potent. So instead of taking a tiny amount of it as a pill, you [00:51:44] S0: have to take [00:51:44] S6: a kilogram of it, which, you know, all of these things disqualify it as a drug. And so the next step in the process is we would go through three to five years of making variations of that molecule to try to optimize it, to make it more potent, to make it more soluble, to make it less toxic. So there's this like three to five year process and that entire process is outsourced to China. That's the problem. And that's what we're bringing back. And the only way you're going to bring it back to your point about economics is if you do it a different way. You've got to use AI and robotics and that's what we're doing.
00:51:44 · Kevin Weil, Jordi Hays
[00:51:44] S6: a kilogram of it, which, you know, all of these things disqualify it as a drug. And so the next step in the process is we would go through three to five years of making variations of that molecule to try to optimize it, to make it more potent, to make it more soluble, to make it less toxic. So there's this like three to five year process and that entire process is outsourced to China. That's the problem. And that's what we're bringing back. And the only way you're going to bring it back to your point about economics is if you do it a different way. You've got to use AI and robotics and that's what we're doing. [00:52:19] S1: Talk about like how you see demand over the next couple years. I can imagine in the same way that we're seeing an explosion of new cybersecurity vulnerabilities, we might see an explosion of new pretty promising, even concepts or ideas for new drugs. Do you imagine you're gonna very quickly be, you know, even as you're expanding capacity, like turning away a lot of opportunities just because of how many opportunities there are?
00:52:19 · Jordi Hays, Kevin Weil
[00:52:19] S1: Talk about like how you see demand over the next couple years. I can imagine in the same way that we're seeing an explosion of new cybersecurity vulnerabilities, we might see an explosion of new pretty promising, even concepts or ideas for new drugs. Do you imagine you're gonna very quickly be, you know, even as you're expanding capacity, like turning away a lot of opportunities just because of how many opportunities there are? [00:52:48] S6: Yeah. I think this is the this is the exciting thing about where we are. It's... This is this is a a real existing industry. Billions of dollars are going right now overseas to these players to help develop every drug that, you know, that you ever see or take. And so there's already a big market for it. And every player would prefer to have that done in The US where they have, you know, strong IP guarantees and everything else. And to your point, you've got lots of exciting new players in AI. Every one of the frontier labs is getting involved, which I think is amazing. And you've got all kinds of new startups that are using AI to do bio. I think that's only going to accelerate. So there's a there's not just a big market today. There's a big and growing market going forward. [00:53:34] S1: On the robotics side, how much... What what is the opportunity to pull stuff off the shelf? I'm assuming there's like a ton of companies working specifically on that and you can sort of acquire existing existing robotic, tools. Or I imagine a big part of this will be building your own, but what do you think your your view is?