The bigger issue related to why there is too little money going into longevity biotech:
Of the many trends people chase in biotech, the only one that proves sure and consistent is declining returns. Even after adjusting for inflation, the number of new drugs approved per $1 billion of R&D spending has halved approximately every nine years since 1950. Deloitte’s forecast R&D IRR for the top 20 pharmas fell below the industry’s cost of capital (~7-8%) between 2019 and 2022. In other words, while the industry remained profitable overall, the incremental economics of R&D investment were value-eroding rather than value-creating. So, while other industries have a reason to treat the current market downturn as transient, the business of developing medicine has a more fundamental problem to deal with - it is quite literally shrinking out of existence.
Src: EvaluatePharma, IRR analysis
Pharma would need multiple $20 billion-per-year outcomes to reverse this trend, yet only three in history - Humira, Keytruda, and Pfizer’s COVID vaccine - have ever reached that scale [1]. This leads to the thought experiment motivating this essay: why haven’t our best current strategies produced a trillion-dollar biotech, and can we ever get there? Here, I focus on the mental models I saw others lean on to “get biotech off hard mode.” Human genetics, drug repurposing, and AI are the most common levers, and each promises to cut costs or derisk pipelines. But the more you look into specific companies and their stories, the more you notice that these strategies rarely work. This is especially true once you turn to age-related diseases, the only market large enough to rescue pharma’s economics, yet the one where our best heuristics work the least.
