Vivek Ramaswamy is worth an estimated $600 million and is transforming the way biotech projects are funded. We profile Big Pharma’s rising star and his latest $1.1 billion investment round.
Bringing new medicines to market requires three things: world-leading expertise, time − and pots of cash.
Drugs can take up to 12 years from initial discovery to licensing approval. As such, the Association of the British Pharmaceutical Industry estimates the cost at a jaw-dropping £1.15 billion per product. Moreover, in the US, the figure is around $2.6 billion.
Only one in 5,000 new medicines make it onto the chemist’s shelf. As result, attracting investment is notoriously tough. But not, it would seem, for US biotech entrepreneur Vivek Ramaswamy.
Big Pharma’s new hero
Ramaswamy shot to fame in 2015 when the initial public offering (IPO) for his clinical-stage company Axovant raised $360 million. It remains one of the largest biotech IPOs in US history.
Now, the Harvard graduate has just raised $1.1 billion in funding for Roivant Sciences, the company he founded in 2014. In addition, Ramaswamy, whose net worth is an estimated $600 million, is Roivant’s CEO.
Unique funding model
The 32-year-old former hedge fund manager is transforming the way pharmaceutical projects are funded.
Ramaswamy’s strategy is to raise big money for Roivant, in this case from the likes of Softbank Vision Fund and Dexcel Pharma. That money is then used to start more companies, which in turn do their own public or private fundraisings.
Roivant has invested in multiple spinouts, including Arbutus (viral diseases), Axovant (neurology) and Myovant (women’s health and endocrine diseases). In addition, the company has funded Dermavant (dermatology), Enzyvant (rare diseases), and Urovant (urology).
Ramaswamy’s latest $1.1 billion windfall will help fund DataVant. Consequently, the startup will use data to measure the odds of success for drugs in clinical trials.
“The ball’s in our court, but I hope we’re going to be doubling down or tripling down on the business model in the coming months if not the coming years,” Ramaswamy told Forbes.
The Alzheimer’s test
Sounds simple enough. However, in Big Pharma, as in most industries, results are everything.
Axovant’s $360 million IPO in 2015 had a lot to do with the potential success of intepirdine. Ramaswamy is banking on the new drug relieving symptoms and improving memory among Alzheimer’s patients.
“It’s Alzheimer’s disease,” he says. “We’re swimming against industry odds. My feelings haven’t changed since we started the study. As much for our sake as for a field that needs it, I hope it works.”
Moreover, if a trial next month proves that intepirdine works, then it could earn Axovant – and Ramaswamy – billions.