02:02:37 · John Coogan, D.A. Wallach
[02:02:37] S1: Oh, yeah. [02:02:37] S0: This is real. This is already material. This is already changing the whole industry. So what's happened is over the past, let's call it five to ten years, China has both invested tremendously in early stage development, like discovery work. So this is the idea generation part. And then preclinical biotech outsourced labor. So before you take a drug into a clinical trial, you've got to run it through this whole battery of tests. You're testing it in mice, maybe non human primates, you're doing a lot of laboratory work. You're trying to characterize this thing as well as you can to minimize the risk to people. And then in The US, you take it to the FDA and you ask for permission to go and put it in people. In China, what they have tried to do is all of that work at a quarter of the price. And because the big pharma companies are multinationals, increasingly they've been comfortable doing that work in China. And just like any outsourcing, if it's faster and cheaper, why not send it there? Now it also turns out the quality of the work is outstanding. Because guess who's doing it? Lot of Chinese scientists who got their PhDs in The United States and then we kicked out because we're idiots. [02:03:48] S1: Yeah. Sure. [02:03:48] S0: So we've got all these... That's what I'm talking about. [02:03:51] S1: It's crazy. Mean, that's
02:03:51 · John Coogan, D.A. Wallach, Jordi Hays, Keller Cliffton
[02:03:51] S1: It's crazy. Mean, that's [02:03:52] S0: what it sounded like, right? Yeah. That's what it sounded like. So Stephen Miller out here kicking ass Yeah. Sure. Our new our new chief of staff. Congratulations. By the way, hear Susie Wiles is gonna be joining TBPN as a nice week. That's huge [02:04:04] S2: for you guys. Don't even know what's [02:04:06] S0: going on. China is ascendant And now Yeah. The lifeblood of big pharma, which is buying new drugs from little biotech companies Yeah. Now they are buying double digit percentages of their new drugs from China. That's what that's what I said when I heard this. [02:04:27] S1: Yeah. [02:04:28] S0: And it's it's a normal... Buy American. Yeah. Yeah. Course. [02:04:32] S3: The new balance. [02:04:33] S0: Of course. You know, buy American, make American, buy American. [02:04:35] S1: Yeah. So [02:04:37] S0: this is this is a big story and and like as with a lot of outsourcing, the potential to bring... [02:04:43] S2: Here's here's like Got all it. Where we we potentially... So automation is one thing. The other thing is like so much general excitement around AI Mhmm. Is gonna push it... Has already pushed a huge amount of capital Mhmm. Into bets that traditional biotech investors would be like, I've never... Right. I would never... I could never underwrite that. [02:05:01] S1: Right? Sure.
02:05:01 · John Coogan, Jordi Hays, D.A. Wallach
[02:05:01] S1: Right? Sure. [02:05:01] S2: Sure. Because all the... Because like we're dealing with like, you know, the singularity and super intelligence and curing all disease within ten years. When you just have sort of like big ideas about things and they're not like based around, you know, decades of investing in the category. And so I would say that that's like prop... Maybe the way that America saves itself by having a bunch of new investors that aren't like experts just flood the space with capital. Because even if we get if we get... [02:05:30] S1: It flows the right way. [02:05:31] S2: Yeah. We we overbuild or we get, you know, we we a bunch of a ton of zeros as always where we get four or five new companies that become like, you know, flagship, you know, public public companies that that solve some of these issues. Is that like... [02:05:45] S0: I think that'd be great. I will say the Chinese approach to AI generally and to biotech seems very different and I must admit I think it's more intelligent. [02:05:53] S1: Okay. [02:05:54] S0: Which is, you know, writ large, China's strategy is make AI free, cheap and good so that every business person in China can use it and out compete whoever else around the world wants to give a run at something. Interesting. Here Yeah. We're in a way, we're throwing crazy venture money at these like millennium problems. [02:06:12] S1: Right? [02:06:12] S0: Yeah. Insane like, oh, this would change everything. Now, I agree. If any of them works, it's worth it. [02:06:18] S1: Yeah.
02:06:18 · John Coogan, D.A. Wallach, Jordi Hays
[02:06:18] S1: Yeah. [02:06:18] S0: But it's kind of odd to me that we're not focusing AI on the low skilled labor first. Mhmm. I mean, call centers, everyone, that's the first example. Of course, it makes sense. Like, why wouldn't AI replace all the call centers? But part of the challenge with biotech is it's like, okay, this is supposed to replace white collar labor. So let's start with the most educated, most sophisticated form of human capital that exists. Yeah. Like big pharma, and I'll be the first to say, they're big companies. They're bloated, they're inefficient, they're bureaucratic, all of that. [02:06:56] S1: Yeah. [02:06:56] S0: They employ more PhDs Yeah. Than any companies in the world. [02:06:59] S1: Yeah. Yeah. [02:07:00] S0: Yeah. Okay? And they're they're not idiots. Yeah. So it's like the Silicon Valley is going to come and show the gray beards how it's done. [02:07:07] S1: It's sort of silly. [02:07:08] S0: It's it's going to fall. [02:07:09] S1: Do you think of the the electronic lab notebook, notebook like the dev tools play in Benchling. Benchling. I I was... A lot of people were pitching like, there'll be like a cursor for bio. And I was a little skeptical in the short term of that because VS Code is open source and so Cursor was able to fork it. That doesn't really exist in the... I don't know what you're doing. Was just... [02:07:31] S2: Added a little Christmas lighting. [02:07:32] S1: Yeah. Oh, perfect. Perfect. [02:07:33] S0: That's nice.
02:07:33 · D.A. Wallach, John Coogan, Praveer Melwani
[02:07:33] S0: That's nice. [02:07:34] S1: But but but there there isn't like an open source software stack for bio that I'm aware of. But at the same time, software development is so cheap now. Maybe you could bootstrap that quickly. Like is there is there a play for software for bio that you're excited by? Or is it a sign of just like a sideshow? Because it feels like an answer to your question of like how can you make things more efficient without needing to go after the no... You're not trying to replace the Nobel Prize winning PhD, you're just trying to make the average lab technician more efficient. [02:08:03] S0: Right. Look, I think in principle it's the right kind of thing. It's like go after the prosaic stuff. Yeah. So for example, big pharma's already seen a lot of yield increase when it comes to manufacturing process. Put cameras over the whole manufacturing line, you can do quality assurance much faster, that [02:08:19] S1: kind [02:08:19] S4: of thing. [02:08:20] S0: What you're talking about is the very early stages. Academics or researchers working in the lab. [02:08:26] S1: Historically, [02:08:28] S0: I'd say the bounty has been quite small for software and biotech. [02:08:33] S1: Yeah, yeah, yeah. They're really... IT spend is low relative to... [02:08:36] S0: It's low and it's all open source, right? Because it's [02:08:38] S1: Okay. [02:08:39] S0: It's it's a pipeline to analyze genetic Yeah. [02:08:43] S1: It might just be like a iPython notebook.
02:08:43 · John Coogan, D.A. Wallach, Jordi Hays, Praveer Melwani
[02:08:43] S1: It might just be like a iPython notebook. [02:08:45] S0: It's a lot of notebook. Jupyter notebooks and stuff. Jupyter notebooks. It all comes out of some lab at MIT, some guy needs to do an experiment, he writes the code for it. [02:08:53] S1: Yeah. A little library for this. [02:08:55] S0: And I think there's also that kind of ethos, which isn't unlike software development where people just, you know, they're trying to cure disease. Yeah. There's kind of a bias against being proprietary. [02:09:06] S1: SaaS guy. [02:09:07] S0: Yeah. Like being SaaS guy. [02:09:08] S1: You're saying the industry needs a Mark [02:09:10] S0: We... Every industry needs [02:09:11] S2: a Mark Benioff. [02:09:12] S0: We need a dream force of of biotech. We need Tony Robbins. Need Metallica. [02:09:19] S1: On stage. [02:09:19] S0: We need all of [02:09:20] S1: it. [02:09:21] S0: Love it. For Tony. [02:09:24] S2: Ice... On the regulation on the regulation side Yeah. If you were running the show, which I'm sure you could get a job an admin. Don't know how long you'd last. [02:09:34] S1: Any any admin. [02:09:35] S4: Yeah. I'd lucky to... [02:09:36] S2: But what would you do? What would you do? [02:09:39] S0: If I were the regular, it's a good question. [02:09:40] S2: Bailouts for my whole portfolio. [02:09:45] S0: Listen. I [02:09:47] S2: think... We need to bail out my early stage book from my 2015 vintage. [02:09:58] S0: The the the United States FDA plays a really important function globally Globally. Yeah. Because everyone trusts us to be hard asses about drug safety and...