Invest Like the Best with Patrick O'Shaughnessy
· Patrick O'Shaughnessy, Alex Karnal
[00:00:00] S0: I think it was OpenAI that came out with this announcement, maybe working with Ginkgo or somebody, where they've created a closed-loop automated lab and discovery process of not just models, but physical world testing as well. If you close your eyes and think five, seven, ten years from now – what's your best guess, knowing what you know, at what the discovery process will look like at that point? [00:00:00] S1: I think it's going to be completely automated. I was up at Lila Sciences the other day and you go into their labs and what you see is all of these robotic arms and you see petri dishes that are moving around in an automated fashion, moving from one spot to the next spot. To me, I think what that means is the scale of data that's going to be required to be able to train these models, the trillions of tokens that are required – has got to move beyond the constraints of human hands because it would just cost so much money to do it in a human capital-driven manner. It has to be done robotically and for that to be done, it has to have an agentic engine behind it and needs to produce data at a scale that's kind of unprecedented. What I think the future of discovery looks like is agentic systems that can drive robots to do most of the experimentation that we're doing today with human hands. And I think that's a big unlock for the ability to crack the codes. [00:00:00] S0: That's the top of the funnel.
· Patrick O'Shaughnessy, Alex Karnal
[00:00:00] S0: That's the top of the funnel. [00:00:00] S1: Exactly. And so now, superstar, brilliant, amazing scientists who go down their life journey to become a scientist that wants to fight against disease, wants to do work that matters – are no longer going to spend two-thirds of their career at the side of a bench pipetting all day long. They're going to have all that time back to point their energy and their enthusiasm, their optimism towards trying to figure out, how do I use the systems and machines that I have and point them in the right direction at the codes that we should be cracking? That's really enabled when you have the combination of brilliant human scientists, force-multiplied by the agentic power of these systems that are being built. And the more those agentic systems can be fully automated, where all of that lab experimentation is happening in real time and without the need for human interaction, I think the quicker and quicker it can scale, and I think the quicker and quicker we can achieve that level of scientific superintelligence.
· Patrick O'Shaughnessy
[00:00:00] S0: What do you make of this whole peptides plus citizen pharmacology side of things? I think they just came out and said, there's going to be 14 something peptides that are allowed to be compounded. And it seems to be like deregulation of sorts happening in this space. People say peptides, I think not really knowing what that even means. So maybe define it. I'm just curious what you think of this. It really plays to your earlier point about these generations – these younger generations especially – seem to be a new attitude towards all of this stuff, which is like, I want to own this. And part of owning it is a willingness to take risks that are above and beyond what is mandated or regulated that I'm allowed to take. This subculture is fascinating to me. You read about BPC-157, I think that's the number. All these interesting different things that are being tried. Do you have a take on the impact that this will have?
· Alex Karnal
[00:00:00] S1: I think it's hard to know whether it's the commercial success of GLP-1s or you look to the massive movement around peptides. Honestly, it's not even limited to just peptides. Like if you go on Reddit, you can see people are experimenting across all sorts of different dimensions. And I think what's happened is we live in a world where people want to go and figure things out that help other people. And now we've got platforms that allow people to share that. And so we see the creation of groups that can exist today that couldn't exist in the future before we had the technology like we have today, and the communities that can get formed. Whether you're looking at it from the perspective of people coming together under shared missions – that's happened throughout the history of all of humanity. This is a shared mission where people are saying like, I want to take my future health into my own hands. And I'm not willing to wait for scientists to go take on this problem independently, for it to go down the traditional pathways. I don't have the time. I need to know the answers now. Because I think, for myself, this is going to really matter. And people have a hypothesis for this and they want to test it, and so they're fighting really hard to go and get those hypotheses tested. At the same time that you see what I would call that grassroots peptide movement, you also have a recognition by the FDA that we've got to move a lot faster. So long as we have all these frictions in the system of going from a hypothesis for a medicine to the testing of a medicine in people and then ultimately in approval, disease is going to keep winning. I think we're seeing, under Marty Makary, real leadership to want to go and try to break down those barriers and those frictions that are making the drug discovery and the drug development process be incredibly time consuming and incredibly complex. And some of the manifestation of the real world impact of that spans everything from – Marty brought in an AI system to help them be able to comb through the thousands of pages of filings that sponsors behind medicines have to submit in record time, versus the armies of people that would have to comb through that, and the days and days of days of time that are wasted.
· Alex Karnal, Patrick O'Shaughnessy
All the way through to starting to challenge every aspect of – okay, well, in what settings do we not need nearly as much evidence in animals and we could rely on cell-based experiments? In what settings do we no longer need multiple redundant studies that show us the same thing? We can cut through it with one study. I think across anywhere you look, we are seeing a movement to be able to do things more efficient, faster, and having a greater impact. And in some ways that circles back to where I began. To me, 2025 was such an exciting year because we saw not just amazing medicines doing amazing things for people's health, but we saw real movements across the consumerization of this medicine, across people wanting to take health into their own hands. And across every layer of what we just described, what we see is people wanting to be far more proactive about their health than has ever been true before. [00:00:00] S0: I've had this experience with you countless times, where I'll introduce you to somebody, we'll have a conversation like this, and somewhere between 30 minutes in and 230 minutes in, the person has a thought, which they rarely say, which is – who the hell is this guy? We've done the same thing yet again, which has gone hours into the conversation without laying any sort of groundwork for your background. Can you just tell us your personal story a little bit?
· Alex Karnal
[00:00:00] S1: I've just been super lucky. Reflecting back on my childhood, I guess my parents were training me to be a biotech builder and investor since the time I was five, but man, I had the greatest childhood ever. Grew up in a typical American home. My dad was this relentless entrepreneur. He was the type of person that worked harder than anybody I knew. And he was so all-in in any business endeavor he was pursuing, like our entire family was all in on it. Mom was doing the billing. My brother and I were in the garage refinishing furniture. Kind of grew up around business by being around my dad, and he was just such an inspirational force in my life. Despite the fact that he was such a relentless businessman, he was never successful, really, at any of those. And I think if he were sitting here today – sadly, he passed of Parkinson's over a decade ago. One of the things he told me in those last few days is that he felt like he never stuck with anything long enough to see it through over the tougher moments, and would just quickly move on to the next thing and the next thing. And so I learned that lesson from watching him in real life and kind of being in business with him. But you pair my dad with my mom, who has been an absolute force in my life. My mom is this incredible ever-optimist. From my earliest memories of my mom, I can remember her drilling into my mind – we always commit and we never quit. She pretty much convinced me that I could do anything I wanted if I put my mind to it. And so I feel like from my dad, I got to experience and see what it means to take risk, and that you can fail and life goes on. And from my mom, I developed this sense of resilience. And I think both of those attributes are very much probably connected to why when I found medicine, I fell in love with it. Particularly the discovery and the development of it. So from that early childhood, I was the first in my family that got a chance to go to college. I graduated from MIT and had just an amazing experience there. For me, being at MIT and learning more and more about business and economics and science, and connecting it back to my early days of working alongside my dad and getting a chance to – at the time not realizing – but put money into some of the deals that my dad was doing. I could put $2 into a rocking chair that we bought.