Pharmaceuticals Are Getting A Blockchain Makeover

In late August, centuries-old pharmaceutical company Pfizer did something new: embraced the blockchain.

In a request to join VitaDAO, a blockchain-based biotech collective that requires cryptocurrency buy-in, Pfizer expressed interest in VitaDAO’s pursuit of drugs that could extend one’s lifespan and wanted to work with the collective as a stakeholder (Pfizer declined to comment for this article).

The decision is likely to pass (so far 100% of the votes are in favor of Pfizer joining the DAO). If so, the pharma company will join VitaDAO in mid-October as a stakeholder and, potentially a future acquirer of any intellectual property that comes out of it.

Pfizer’s interest represents a shift in the decades-old biotech lifecycle, one dominated by public research universities and large pharma giants, both of which work hand-in-hand to create many of the drugs we see today.

Enter DAOs

DAOs, decentralized autonomous organizations, allow anyone to join and vote on what kinds of research to fund, and what to do with those findings later on. These initiatives are popping up as another way to fund research projects, often acting like the National Institutes of Health (which provides research grants), venture capital firms and startups themselves. In some cases, intellectual property that comes out of research belongs to the DAO as a whole.

“A DAO is almost like a collaborative and it has to be agile, trying to not fall into a very strict box, and see where they can make the most impact,” said Laura Minquini, founder of biotech collective AthenaDAO. “And that, to me, is the biggest advantage of a DAO.”

The research gap and ‘replication crisis’

Most therapeutics on the market today have gone through a process that looks like this: Scientists at a research university discover a molecule that could treat a disease, the school patents it, and that patent spins out into a budding biotech startup searching for venture capital funding. After enough research and development, a large pharmaceutical giant will pluck the assets or acquire the company altogether.

Because of this, taxpayer dollars that fund research at public universities often lead to privatized therapeutics that are sold back to the public—though the argument could be made that much of the drug making process happens when the research is privatized. And because universities benefit from needle-moving scientific discoveries, some subjects are far more researched than others.

“Scientific research incentivizes novelty over replication,” said Erik Van Winkle, head of operations at DeSci Labs, an organization aimed at decentralizing science. “If you’re a postdoc, what gets you tenure? What gets you a promotion? What gets you funding? It’s finding this incredible truth about the world.”

This has partly stoked the replication crisis, an ongoing issue in the scientific community whereby the majority of research that is published cannot be verified because it cannot be replicated, which is a key step in the scientific method.

“One paper cites 40 others, which all cite 40 others which cite 40 others,” Van Winkle said. “It turns into this giant tree of knowledge where, if you have underlying support structures that don’t replicate, that’s a little bit of an issue.”

A way to fund underfunded science

You may remember Ryan Breslow as the founder and former CEO of fintech platform Bolt who went on a Twitter rant lambasting competitor Stripe and Sand Hill Road venture firms. After stepping down from the helm of the company, he started Love, a biotech startup that came out of stealth in August with $7.5 million in funding.

Perhaps it’s strange that the CEO of a prominent fintech platform is now heading up a biotech company that uses intense science and chemistry to feed a slow-moving regulatory body like the Food and Drug Administration. But Breslow’s startup is leveraging cryptocurrency and the blockchain through a DAO.

The research gap is where DAOs like Breslow’s come in. On one side, Love will act as a nutraceutical company. On the other side is the DAO that will crowdfund money for research and clinical trials for mostly homeopathic cures that are anecdotally well known but don’t have the empirical evidence to back up their efficacy. They often can’t be patented and therefore don’t see a lot of love in the research space.

Breslow said part of the inspiration came from his two-year-long issues with chronic back pain that made it hard to exercise and hampered his mobility. After seeing a wealth of doctors who suggested medication and surgery (both of which proved to not alleviate his pain), Breslow turned to meditation and therapy to reduce stress. After three months, his back pain was gone.

“It’s not just me who believes in these less traditional healing [methods]. There’s a lot of people. The problem is, there is no data to support that,” Breslow said. “For me, it’s just a story. For the next person, it’s just a story. For the people who believe in homeopathic solutions, herbs and plants, psychedelics, it’s just stories. There’s no clinical data.”

Homeopathic methods are often clinically inconclusive, but that doesn’t mean they aren’t useful for people.

How Love’s DAO works

In the case of Breslow’s venture, people can buy tokens to enter into the DAO and participate in conversations, suggest what sorts of plants or supplements they want more research on, write proposals and vote. The money collected by the DAO will be used to run clinical trials on whichever plant and clinical indication gets the most votes (for example, using turmeric to reduce inflammation).

“How do we get data on these alternative paths for healing? Because pharma won’t produce the data, because you can’t patent a plant and you can’t patent yoga or meditation,” Breslow said. “… we want to put an end to these age-old debates by providing data.”

Not the only one

It’s difficult to say how many DAOs are operating in this space, but the blockchain has long been heralded for its use cases in the health care world, especially in patient data. Most patients don’t have access to their entire health record since birth, making it difficult for doctors to accurately assess the full scope of one’s allergies, injuries or illnesses. Startups have popped up to make it easy to share patient data between different providers, like a primary care physician and an OBGYN, who can add to the patient record without making their own.

Per Crunchbase data, blockchain-related health care startups raised $34.6 million at its peak in 2019, and only $18.7 million so far in 2022.

Love’s DAO is far from the first to attempt this new structure of drug development that effectively circumvents the traditional research and development model. Perhaps the most well-known biotech DAO is VitaDAO, which focuses on early-stage drug development related to helping people live longer. The organization has funded around 15 research projects from university scientists that may not otherwise receive research grants.

VitaDAO was spun off of Molecule, a software platform that recently raised $13 million in seed funding to create DAOs that will support a variety of different kinds of research.

Heinrich Tessendorf spent years at a German pharmaceutical company, siloed from the research and development firms that were creating the drugs he was selling. He joined VitaDAO in 2021, then became the community and marketing manager for Molecule a few months later.

“All of a sudden I was like part of this community interacting with everyone around the world. We’ve got researchers in Denmark. In the U.S. there were people from Harvard, MIT, Stanford, all coming together and collaborating,” Tessendorf said. “… it just creates these incentives for collaborating.”

There’s also AthenaDAO, which is pursuing life longevity for women. Minquini, who was an active participant in VitaDAO before creating her own, started AthenaDAO. The DAO looks to fund women-led research at a time when female scientists receive 24% less money in research funding from national grants than male scientists.

“I think one of the most difficult things that you realize is how many things don’t happen because of the structure that we have now,” said Minquini. “How many [scientists] don’t get their ideas to fruition because of a lack of funding. … So how can you support scientists and do research in a way that is efficient so that it actually gets to somebody like you or me and makes an impact in our lives?”

Illustration: Dom Guzman

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