Friday, April 1, 2016

April Fools

Browsing the web on April 1st feels like one giant "Island of Truthtellers and Liars" logic puzzle. But, no joke, there seems to be a promising treatment for amyloidosis in the pipeline. Nova writes about a virus called M13 which is adept at destroying amyloids, mis-folded proteins that are responsible for many symptoms of aging.

The company that is developing a treatment based on M13, NeuroPhage, is beginning human trials. Though, the FDA and biotech field being what it is, it's always best to remain skeptical. In business school, we had a founder at a biotech firm talk about how regulatory compliance imposed enormous, even fatal, costs on his startup. His particular firm had developed a promising treatment for AIDS which was essentially a cure.

In my mind, that's a home run. The superstar or unicorn that VCs are always chasing.

And yet, years later, AIDS sufferers cannot try it. Startups like his did not have the billions of dollars it costs to get a drug approved by the government. Normally, even this isn't an insurmountable hurdle if there is enough money to be made. If it costs two billion to get a drug tested with a fifty-fifty chance of passing, you need a very significant upside for such an investment to make sense. Given that profits are never guaranteed and that there are many other investing options that take on far less risk, a drug needs to be worth much more than two billion dollars to get investment.  

Unfortunately, AIDS is largely a third-world problem where the potential market does not clear the government-created artificial threshold for success. Advocates of regulation can probably point to situations where the FDA has saved lives by banning harmful drugs. Some people want more regulation and testing and some people want less. A utilitarian might want to find the balance that saves the most lives although such a number is impossible to compute. 

Thankfully, the constantly decreasing cost of travel and the lower barriers to biotech firms in regimes with less regulation will mean that promising treatments will still have a chance outside of the "capitalist" United States. Treatments, no doubt, that the nomenklatura will avail themselves of while expounding on the need for more regulation and the evils of corporations at home.

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