Next Unicorns: Manufacturing pharma drugs in space with Varda’s Delian Asparouhov | E1793 | Summary and Q&A

TL;DR

Varda innovates in space manufacturing with a focus on pharmaceuticals, leveraging new space infrastructure to revolutionize the industry.

Key Insights

• 👾 Varda's innovative approach to space manufacturing focuses on pharmaceutical production initially.
• 👾 Leveraging new space infrastructure from SpaceX and Rocket Lab enables Varda to revolutionize drug manufacturing in microgravity.
• 🪛 The company's strategic partnerships with pharma companies and government entities drive operational success.
• 🍉 Varda aims to scale its operations, integrate into pharma supply chains, and achieve sustainable unit economics for long-term growth.
• ❓ Aligning interests with pharmaceutical customers through equity partnerships creates additional profit opportunities for Varda.
• 🚂 Varda's co-founding team, including a venture capitalist, enhances strategic decision-making and liquidity management.
• 🥳 The evolving space economy resembles the early internet days, with potential for exponential growth and innovative business models.

Transcript

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Questions & Answers

Q: How did the idea for Varda originate, and what milestones have been achieved so far?

The idea for Varda stemmed from a decade-long fascination with space manufacturing, and the company has successfully operated a trading post in space for pharmaceutical production.

Q: What are the primary customers for Varda's space manufacturing services?

Varda serves both government entities, such as the DOD, for space infrastructure testing and pharmaceutical companies for advanced drug manufacturing in microgravity.

Q: How does Varda manage payload delivery to space, and what role do SpaceX and Rocket Lab play in this process?

Varda leverages SpaceX and Rocket Lab rockets to transport cargo to space, with specialized containers provided by Rocket Lab and space delivery services by SpaceX.

Q: What are the key milestones that Varda aims to achieve in the short to mid-term for its business success?

Varda plans to consistently solve pharmaceutical manufacturing challenges, integrate into pharma supply chains, and achieve sustainable unit economics to scale operations successfully.

Summary

In this video, the guest discusses the trends in U.S. foreign investment in China, the importance of U.S. technological advancements, and the potential impact of China invading Taiwan in 2025. The guest also talks about the incubation model at Founders Fund and the unique aspects that make it successful. They then introduce their own company, Varda, which focuses on in-space manufacturing in low Earth orbit. The first phase of their business is centered around pharmaceuticals, taking advantage of the microgravity environment in space to develop new and improved drugs. The guest also mentions their partnerships with the Department of Defense and their plans to work with top bio-pharmaceutical companies.

Questions & Answers

Q: What are the trends in U.S. foreign investment in China and the impact of China invading Taiwan?

The guest mentions that there is a growing trend of U.S. foreign investment in China, including the increase in iPhone components being produced there. They also express concern about the potential invasion of Taiwan in 2025 and the possible impact on the U.S. The guest believes that there is a four to five year gap where the U.S. could be relatively weak, but remains confident in the strength and potential of the country in the long term.

Q: How does the incubation model at Founders Fund work and what makes it successful?

The guest explains that Founders Fund follows an incubation model where they actively invest in and incubate companies. They emphasize that they only incubate companies when certain conditions are met, such as the company having a strong need for their support and being in an industry they want to dominate. The guest believes that the success of their model comes from their approach of not incubating companies too regularly, as well as the lack of infrastructure and support they provide, which challenges the founders to be resourceful and focused.

Q: What is Varda's focus and how did the idea come about?

Varda is a company that focuses on in-space manufacturing in low Earth orbit. The guest explains that the idea for the company originated almost a decade ago when they became fascinated with the concept of in-space manufacturing, particularly after observing the economic incentives behind permanent human settlements throughout history. They decided to start Varda after seeing the successful commercialization of space technologies by companies like SpaceX. The initial focus of Varda is on pharmaceuticals, leveraging the microgravity environment in space to produce new and improved drugs.

Q: What is the first commodity that Varda will manufacture in space?

The guest states that the first commodity Varda will manufacture in space is pharmaceuticals. They explain that the microgravity environment in space provides a unique bioreactor setting, allowing for the optimization of certain chemical reactions. Varda aims to leverage this environment to produce pharmaceuticals that offer advantages over traditional manufacturing methods. By bringing back 40 kilograms of pharmaceuticals from space, they can generate over $50 million in revenue, making it a viable business opportunity.

Q: How does Varda plan to work with the Department of Defense (DOD)?

The guest mentions that Varda has collaborations with the DOD in the area of space infrastructure. They compare their trading post facility to a next-generation wind tunnel, where the DOD can test vehicle systems for missiles and other defense technologies. Varda provides a platform for testing and development before integrating these systems into operational projects. The guest highlights the potential for using their re-entry capsule to simulate the conditions experienced by hypersonic boost-glide missiles.

Q: Who are Varda's customers in the pharmaceutical industry?

Varda's customers in the pharmaceutical industry are primarily top 20 bio-pharmaceutical companies and mid-stage bio-pharma companies. The guest mentions that they have ongoing discussions with these companies and hope to announce the first contracts by the end of the year. They highlight the value proposition of using Varda's in-space manufacturing capabilities to develop and improve pharmaceutical products.

Q: How does Varda transport cargo into space?

Varda utilizes partnerships with SpaceX and Rocket Lab to transport cargo into space. The guest explains that they have conducted their first mission using SpaceX to demonstrate their capabilities and will be flying a customer's pharmaceutical product during their second mission, which is planned for the beginning of next year. They leverage the launch capabilities of these companies to deliver cargo to low Earth orbit.

Q: How does Varda plan to advance from basic science to scalable manufacturing in space?

Varda's focus is on transitioning from basic science experiments to scalable manufacturing processes in space. The guest mentions that they are working to standardize and optimize their operations to consistently solve specific customer problems. They aim to demonstrate repeatability and reliability in their manufacturing processes. The guest also highlights the need to gather more data and conduct more experiments to better understand and leverage the microgravity environment.

Q: What are the challenges and opportunities of in-space manufacturing?

The guest acknowledges the challenges of in-space manufacturing, such as the limitations of mass transport to and from space and the need to optimize processes for the microgravity environment. However, they also see numerous opportunities, particularly in the pharmaceutical industry where the improved quality and efficiency of manufacturing in space can lead to significant revenue growth. They believe that in-space manufacturing has the potential to become a crucial part of supply chains, enabling the creation of new products and advancements in various industries.

Q: How does Varda's in-space manufacturing benefit from microgravity?

Varda's in-space manufacturing benefits from the microgravity environment as it allows for the optimization of chemical reactions and the production of drugs with novel properties. The guest compares it to having a bioreactor with a new knob to adjust gravity's influence on the manufacturing process. They emphasize that gravity is a critical factor in many chemical reactions, and the unique environment of space provides an opportunity to explore and exploit this factor to create unique and improved pharmaceutical products.

Q: How does Varda plan to expand beyond pharmaceutical manufacturing?

The guest explains that while the initial focus of Varda is on pharmaceuticals, they aspire to expand into other areas of manufacturing in space in the future. They envision building a trading post that facilitates not only pharmaceutical production but also the production of various commodities using the unique capabilities of the microgravity environment. The guest acknowledges the gradual nature of this expansion and the need to establish Varda as a reliable and consistent provider in the pharmaceutical sector before branching out into other areas.

Takeaways

Varda is a company focused on in-space manufacturing in low Earth orbit, initially targeting the pharmaceutical industry. They leverage the microgravity environment in space to optimize chemical reactions and produce pharmaceuticals with improved properties. Varda operates as a trading post, providing a platform for testing and developing defense technologies through collaborations with the DOD. They partner with companies like SpaceX and Rocket Lab to transport cargo into space. Varda's long-term vision includes expanding into other areas of manufacturing in space, building on their success in the pharmaceutical sector.

Summary & Key Takeaways

• Varda focuses on space manufacturing, starting with pharmaceuticals, utilizing new space infrastructure from SpaceX and Rocket Lab.

• The company has overcome early challenges and is now working on solving specific problems for pharmaceutical companies.

• Varda aims to scale operations, integrate with pharma supply chains, and achieve sustainable unit economics for long-term success.