Ep87: Bob Nelsen of ARCH Venture Partners on Biotech Investing

Welcome to The Long Run. This is a podcast for biotech adventurers. I'm your host, Luke Timmerman. Today's guest is Bob Nelsen. Bob is the co-founder and managing director of ARCH Venture Partners. He's one of the most prolific and successful venture capitalists in biotech history. Bob likes to get involved in startups in the very early days. He's willing to stick his neck out and do things that might seem weird or premature to most people at the time. He was an early investor in gene sequencing technology with Illumina, RNA interference with Alnylam, cell therapy with Juno, and infectious disease with Vir. He dreams big, thinks ahead of the pack, and isn't afraid to take risk. I've interviewed Bob too many times to count over the past 20 years.

He was one of the first people I met when starting out covering biotech at the Seattle Times. He was just getting established at Arch in those days. In 2016, when he made the Forbes Midas list, I wrote that he is, quote, whip smart, quirky, funny, profane, audacious, and quotable. Still true. He's always been a character. Love him or hate him for whatever reason. Now for this conversation, I focus mainly on what Bob and the Arch investing team want to do with the latest fund, Fund 11. It's a $1.85 billion colossus to invest in new biotech startups. He talked about some priority indications for investment, including some new higher priorities coming out of the pandemic, especially mental health and biomanufacturing.

I didn't ask Bob to cover his personal story in this conversation as others have covered it before. Matt Herper wrote a nice profile of Bob for Forbes in 2016. Now, before we dive in, a word from the sponsor of The Long Run, Synthego. Synthego is a genome engineering company that enables the acceleration of life science research and development in the pursuit of improved human health. The company leverages gene editing, machine learning, and automation to build platforms for science at scale. By enabling unprecedented access to cutting-edge genome engineering, Synthego is at the forefront of innovation, accelerating the development of truly engineered biology. Synthego's expertise in CRISPR, combined with their proprietary software and technology, means you have a trusted partner whether you are at early stages of basic research or ready to take your therapy to the clinic.

Visit Synthego.com/Timmerman to learn more. And if you like listening to The Long Run, check out Timmerman Report. This is where you'll get my in-depth coverage of startups, biotech trends, and thought-provoking commentary from a diverse cast of contributing writers. Go to TimmermanReport.com for details. Now, please join me and Bob Nelsen on The Long Run. Bob Nelsen, welcome to The Long Run. Hi. So Bob, I want you to know straight away that this is not a family podcast. So if you want to be as profane as you want to be, it's totally fine.

Yeah. I was swearing on Twitter a lot yesterday, so it was a good chance. I'll swear on this.

I've noticed. Does that mean you're in a good mood or a better mood than usual?

I tend to swear at the extremes, good moods or bad moods.

Okay, okay. Well, just for the listeners, you know, I want to say starting off that, you know, it's been, I realize you and I have been talking about the same stuff basically for 20 years. Taking science and trying to turn it into businesses that create products that actually help people. And I don't know what that says about either one of us that we've been doing this this long, but it's kind of endlessly fascinating to me. Why do you think you still do it?

I think it's just incredibly motivating to be, you know, with people that are way smarter than you all the time, trying to solve really, really big problems that are, you know, unsolved and have major impacts. So it's kind of a, to me, it's like the most fun job that you could have.

Yeah, and biotech has just gotten so much more interesting over the years, don't you think?

Yeah, I think we're just in this truly revolutionary, up-and-to-the-right kind of scientific and kind of even industrial innovation realm where a lot of vectors are kind of intersecting, um, that really will have a just a fundamental impact on the human condition, you know, more than just human health or human maladies, but, you know, things like, you know, reversing aging and, you know, fixing depression and even thinking about optimizing kind of your mental state, um, human performance, those kinds of things, um, you know, well beyond just, you know, fixing a malady like COVID.

So let's talk about—I want to go into a number of those things, because you mentioned them in this really, uh, dense press release, uh, that you sent a couple of weeks ago about your new fund, $1.8 billion fund. I think 11, is that right?

Yeah.

so um i noticed right off the top that you mentioned that this is going to be for early stage company creation the bread and butter the stuff that arch has done for 20 plus years uh but um you you mentioned like that you're still gonna do these like fifty thousand dollar checks all the way up to 250 million whatever the the thing requires And I wonder, now that you've been more successful in recent years, you've gotten some big returns, some big wins, you raise more money. Does that create something of a challenge for you to stay true to your roots, to do those like three guys and a dog kind of startups that really only need a million dollars? Does that really even make sense in a fund this big?

Or do you have to become something different, like a growth equity kind of fund?

I mean, that is the challenge. And, and so, you know, many funds that get big have lost their edge and they tend to either it's the kind of the old guys who have made most of the money handed off to other folks who don't know how to make money or don't know how to build companies, or it's, they start thinking about what we would call putting the money to work, which is like a bad phrase in arch. Um, it should just be about doing cool stuff and having impact. So if you can have impact with a million dollars, that's awesome. If it takes a hundred million to have impact, that's fine. And so some of the things we do, we couldn't have done, you know, some things really do need a hundred million dollars or $200 million to have impact because you need scale and you need to invest and you need multiple things.

And some things, you know, really do just need to be, uh, brought to the next technical risk reduction. Um, so.

Do you think you, um, can do both the, the early-stage, you know, small companies and the, the really big audacious plays like a Resilience, uh, in the same fund?

Yeah, I think that, you know, we we've done it in, uh, you know, fund eight, nine and 10. So I think we'll be able to do it in 11. I think, um, But you do have to kind of just keep the scientific bar high. That's really the key thing is to just keep that love of the scientific innovation. One of the things that we're doing to innovate within the innovation model is starting to incubate some of these smaller things within the companies we already have, because the biggest scarce resource right now is actually not capital it's it's human capital like it's great managers it's you know great company builders it's great scientific innovators within companies and and that is actually the hardest thing so we're doing a bunch of companies where we're actually in we kind of create these innovation divisions within a company like Sana has Sana X

Resilience has Resilience X. And those X divisions are meant to be kind of the R&D innovation, high-risk money. And we can take a new idea, incubate it within those companies and actually invest in it from the other fund, not have it be controlled by the company. It can be a completely independent company. And then, kind of in exchange for being incubated, it might give a pick or two, a market-rate kind of pick or two to the company that's incubating it. So we're experimenting with this model to be able to do more things and also be able to be more effective at company building because, um, we've just found that the—the biggest risk that we have is picking the wrong people and trying to build these teams over and over. And when every graduate student, you know, with a new paper thinks that they have a new company, you really need to figure out a way

to not build, you know, a thousand different companies because you're sub-optimizing. It's really interesting.

Is there a historical analogy here? I'm trying to think of, like, a past ARCH investment, like something like, say, Agios, you know, where you bet on a founder and then, you know, he brings in some people around him, like, say, a John Evans who, you know, gets to work on, learn a whole bunch of cool new things. And then eventually, you know, out he comes to join ARCH and start Beam.

Well, I think an example would be that Prime has incubated within Beam. And we have other companies that are unannounced that are incubating within some of our other companies. So while Flagship might incubate a bunch of companies within Flagship, we have a model that's kind of incubating companies within companies. And then we still have our conventional model that is incubating just new companies, doing kind of the classic venture model. We're doing a little bit of both.

This is a way for you to scale a bit without building a whole bunch of new infrastructure at ARCH.

It's not even scale per se. It's more just efficient allocation of human capital, right? There aren't that many great company builders out there. So when you find one or multiple of them, um, you know, the—the amount of effort that it takes into that, you know, building that first year-one or year-two team is immense. If you can apply some of that human capital across, you know, kind of multiple projects and they can handle it. Uh, and that's how we've done it within these X divisions is—is really build the X division to be, you know, kind of great, early-stage risk reducers, right? But it's a big risk.

Is this a place where company builders are made? 'Cause they're not necessarily born, and they don't just, like, present themselves with a great resume to you. And it's like obvious, like, 'Bob, you should fund this guy out of MIT.' Like, they need to learn somewhere, right?

Yeah. I don't think we've proven that we can make them there, but we definitely are excited about reducing the risk, you know, in that context, right, where we're reducing technical risk within these, um, within these kind of X divisions or within companies within the X divisions, um, and then decide whether these are, you know, independent companies that we should put a lot of money in later. Okay. Um, well, I don't want to spend—so that's one of the innovation models that we're playing with.

Let me ask you a little bit about this fund, though. You got $1.8 billion. It's a lot of money. I mean, maybe not in the grand scheme of things, like how much money people put into things like Uber and whatever. But you got $1.8 billion. There's a lot of things you can do with it, places you can put it. I mean, you list something like 11 different categories in your press release: infectious disease, mental health, immunology, oncology, neurology, manufacturing, clinical trials, anti-aging, genomic, biological tools, data sciences, and then new ways of reimagining diagnostics and therapies. There's a lot there. How did you come up with that list, and, and maybe like, like why did those things get on there, and what were some things you left off? Um, I just think it's a following-the-science, um, list, right? And following the clinical or kind of market need,

You know, clinical trials need to be reinvented. Manufacturing is a huge issue. You know, we think the frontiers of science will go into kind of in vivo gene therapy and in vivo potentiation of cell state, you know, rejuvenation of cells, organs, people, things like that. There's—so some of it is kind of... And then in the mental health area, nobody needs explaining kind of why mental health is a problem. I think it's kind of the problem of our time, more than viruses and cancer and other things.

Well, it was there and it was big before the pandemic. But now, I mean, doesn't this look like just a huge iceberg coming out of it?

I was looking at this epidemic of suicides in Japan. I mean, there's, there's just, um, I think the Japanese, the Japanese government just appointed a Minister of Loneliness. Um, you know, it sounds like the, uh, Trump post-presidency or something, but, um, but basically, um, I think it's, it's this, um, viruses will be handleable. You know, the next pandemics, I think, will be prepared. Uh, the science isn't the hardest science, um, and it's a lot more about, um, you know, some pretty good R&D and a lot of engineering and scale. So I actually think viruses will, will be handleable. I think cancer will be a lot either prevented, you know, with early detection, or treatable. So, you know, you start kind of going down the list, and then you get into the hard ones, and they're mostly in the neuro space of Alzheimer's, Parkinson's, mental health—really hard.

And then when you think about rejuvenation and, you know, kind of reconditioning the body, then you can think about liver and kidney and, and heart. And, you know, then those are kind of the next frontier, with the brain being obviously the most complicated, both to access, you know, from a kind of blood-brain barrier-protected status, and also to even understand from either a genetic, a circuit, or kind of phenotypic level. So I think there's a lot of redefining of the existing paradigms that need to be done to really kind of fix the brain.

Do you think, Bob, that the neurodegeneration and some of that mental health stuff is that ripe or mature for venture investment? Or is this an area that where a lot of the basic biology, like NIH funds, needs to be allocated and worked out?

I think it's both. I think there's, you know, you can approach mental health from what I would say kind of is the soft side of it, right? In terms of things that you can do or to make you feel better. And then you can approach it from the hard science, which is really the kind of the genetics and the quantitative phenotyping and, you know, the real biology that's going on that drives, you know, a mental illness or something, you know, neuroinflammation, something that might drive a disease or, you know, whenever we figure out what drives Alzheimer's. So some of it is risky science. Alzheimer's would be the perfect example of that. At the same time, there is a hook in Alzheimer's, right? We know if you have an ApoE44, you're probably going to get it.

So that's huge, right? We know that there's you know, at least you're going to get it in the definition of what it is. So in other words, Alzheimer's might be more than one, probably as likely more than one disease. So at least that version of the disease you get, if you have APOE44. And so, so there are these hooks that you, that you have. So it's not like totally in the dark. And the same thing with mental health, some things are, very specifically genetic, and some things are polygenic, and it's just hard to figure out, you know, the weights and how you look at it, but you know, it's, it's, you know, linked, and some things we don't really know much about. And you can get into the very soft areas, you know, like, how do you feel, you know, state of consciousness, type of things, but you know, there, there are some digital therapeutics and ways to kind of

manipulate brain chemistry to make you happier, which is, you know, ultimately where we want to get, right? Which is, we all want to be happier and more productive. And, you know, that, that kind of, and, and in an ideal world, we'll be happier, more productive and rejuvenated and younger and, and, you know, without disease for a longer period of time. Or if you have a disease, we'll be able to fix it. So I think we're really in that realm within our lifetimes. You'll be able to fix a lot of these things.

Synthego is a genome engineering company that enables the acceleration of life science research and development in the pursuit of improved human health. The company leverages gene editing, machine learning, and automation to build platforms for science at scale. By enabling unprecedented access to cutting-edge genome engineering, Synthego is at the forefront of innovation, accelerating the development of truly engineered biology. Synthego's expertise in CRISPR, combined with their proprietary software and technology, means you have a trusted partner whether you are at early stages of basic research or ready to take your therapy to the clinic. Visit synthego.com/timmerman to learn more.

Another thing that I noticed in your plan for your new fund is that you talk about healthcare delivery. And I haven't heard you talk as much about this in the past—things like how data gets collected, how therapeutics get manufactured, and, like, ultimately, like, where the rubber meets the road, where the care gets delivered to the patient. What kind of investment opportunities do you see there, kind of extending upon your foundation?

I think it's, you know, the biggest one when we think about delivery there is, is mental health. Um, but you can imagine in, in, uh, gene therapy or cell therapy, um, if you have high-impact therapeutics, um, that are, let's say you have, you know, things that cure solid tumors, you know, do you just have to go to the existing system with your cell therapy that cures solid tumors? Or maybe you create a cell therapy center that sits next to a big hospital, but it's, you know, essentially owned by the company that's manufacturing the cells. So you can imagine, as these complex biologics whose manufacturing is connected to the function of the therapeutic, maybe there is no drug per se, it's kind of a service, right?

You have cancer, you come in, we'll cure your cancer by giving you the cells. But you don't have to go to Stanford to get your cancer cured.

You're going to that partner with Stanford that's across the street.

We might partner with Stanford in a situation like that. Because there's reasons to go to the hospital, but getting your cancer cured might not be a reason to go to the hospital.

Okay, so that is healthcare delivery. You mentioned also manufacturing. You've got this big play here with Resilience. And I know that this one came out of your ruminations on one of the big gaps you've seen during the pandemic. Where did this idea come from? What are you trying to accomplish with it?

Pretty much what you said. I mean, it's just me being pissed off at observing the inability of our world to respond to the pandemic. And we did a great job in some context, right? It only took a year and a half, a million dead people, right? So it's like, I'm not satisfied that we should be patting ourselves on the back and saying like, 'Oh, this is great.' And so, I think that we can do things faster, better, cheaper, more effectively, more predictable, anticipating the next problems. And at the same time, solve many of the problems in gene therapy and cell therapy and gene editing that make them very kind of unpredictable, hard to manufacture and regulate, and riskier. You can systematize all of those things

and make them a lot cheaper at the same time. So, more accessible and, you know, more consistent, decentralized, data-driven therapeutics versus the existing system that we live in right now, which is, you know, shit happens in CMC, shit happens in clinical trials, you know, there's... It's just a messy first inning. We're in the first inning, and we just have never really invested in systematizing cells or viral vectors or editing.

Instead, everybody's got their own proprietary thing, and they do it in small batches.

Every university has one, and every biotech has one, and every pharma has one.

So, but you're, you're thinking of like a go-to resource where these are the guys that make, you know, AAV vectors at scale and...

We want to be the best manufacturer of cells and genes and edits in the world, right?

It's like, you know, an mRNA vaccine comes along.

Yeah, better than any one company.

It's, it's all under one roof, although that roof is distributed across, you know, North America. Um, but, you know, it's a place where people work out the processes to make the absolute best, fastest, cheapest AAVs. Like, 'Oh, you need to make a billion AAV vectors in the next, you know, three to six months.' You know, this will be the place to do that.

Yeah, we want to be, we want it to be obvious that you should work with us versus doing it yourself. And, you know, TSMC is a good model for that, but, but, um, you know, the general idea is we can learn some things from semiconductors in the sense that they actually invested a lot of money and technology figuring out how to make stuff way better, faster, cheaper. And that's what drove the entire computer industry, right? And so if you can systematize more about the biology, whether it's automating cell therapy, or whether it's kind of being able to make rapid cell lines or scale viral vectors faster, you know, you can have just a more effective system. And then if you take a step back and go into the basic biology, then you can rethink how these things should be made.

And that's the, that's where it takes some basic R&D instead of applied R&D, really thinking about, 'Wow, are we even, are we even making these things the right way?' You know, do we have to make antibodies in big, giant steel tanks? Um, you know, maybe we should make them in the body. Yeah. Well, we're already doing that with mRNA, and, uh, well, I mean, your, your body is making antibodies all the time without mRNA, right? So, so, um, you know, there are some really interesting ways of thinking about or rethinking the way that things are made. And mRNA is a great example, but there are many others.

I hear what you're saying. Like, you could take some basic biology people out of academia who haven't even really thought that much about what's the best, fastest, cheapest way to make antibodies. You give them a company that's got some resources, they can go to work on rethinking that part as opposed to some other.

Just to give you an example, if I can make an immortalized B-cell, I could give you all of the vaccines you would ever need in your lifetime and, you know, correct any, you know, anything else you happen to need at the time, and in probably 100 cells.

So they'll just be stored somewhere in case?

Or, yeah. Or just, and, and maybe I just give them to, you know, if I'm in, if you're in Africa and I just encounter you once, I can just give you a hundred cells that have all the things that you need and that's it.

Wow. That's, that's pretty cool. Okay.

So that obviously would, would, you know, change the supply chain of a lot of different things. If you're selling a lot of Rituxan or Herceptin or whatever, pick your drug. Those technologies work pretty well, but they're expensive and inefficient relative to your body's ability to make stuff. One way or another, I think you'll see some kind of major changes in the way that things are made, or at least some things are made.

Yeah, that manufacturing piece has been neglected for so long and there's a lot of room for innovation. This is a longer conversation I want to have another day. But I do want to ask you as well, sticking to this new fund, you know, you have to be looking at a whole lot of the macro shit that's going on in this shit show over here with COVID-19. And, you know, do you see like really big changes to the investing landscape? I mean, whether it's—are we going to ever get universal coverage in the United States coming out of a pandemic that affected a whole lot of people in different ways? Are we going to fund public health to a greater degree, both at the federal and state and local level? What about NIH?

How does this change the way you think about what you do?

I think that, I've said this before, the big threat to the industry was the Elizabeth Warren crazy, Bernie Sanders crazy, AOC crazy that don't really understand innovation is actually the solution to public health, not the problem. Governments don't create those solutions, private industry does. Well, those things didn't happen. Yeah, so those things didn't happen. I think the Biden administration, you'll see some crazy drug pricing proposals in Congress, maybe something accidentally that sweeps up innovation gets through. But I think most of the Democrats in the Senate and the Biden administration understand that the innovation infrastructure is not just an American, you know, dominant area in biotech, but, but one that creates a lot of jobs and, um, has the promise of making things more accessible, better, faster, cheaper, um, and, um, and curing stuff, you know, instead of spending lots of money on hospitals and things.

So ultimately, um, I think that view will prevail. That doesn't mean there's some two steps forward, one step back piece of this, because what happens is when they go after pharma, it tends to drive the money for biotech. I think that we will, and we're not going to be in the kind of public markets we're in right now forever. There just are going to be cycles. ultimately there will be this kind of, I don't think it's going to be feast famine kind of thing, but there, but there will be down cycles and, and, um, and there will be too many companies and there'll be some right sizing and, and, uh, you know, pharma will get pharma, I think is under threat from lots of different angles. So pharma needs to kind of innovate or, or, or be in trouble.

And frankly, since they can't really innovate, they have to buy that innovation or partner that innovation. So even in a down cycle where pharma is the target, that makes our more innovative companies more valuable.

I think right now, pharma might be getting a little bit of a break on the drug pricing thing. I mean, they were at the bottom of the barrel on reputation at the beginning of this pandemic, and now some polls are showing that people are starting to think pharma, eh, maybe not as bad as we once thought. So maybe that falls under the header of what you and a lot of your colleagues in industry say to government, which is basically, don't kill us, don't hurt us. Um, but you know, I wonder if you think about the other side of the coin, too, like because there is this mood for more bold thinking. You know, Janet Yellen and, you know, these others are talking about like the risk of doing too little, and, you know, you appreciate as well as anybody else like the catalytic role that government can play, like with investing in, say, basic research, for instance.

Do you think there's an opportunity here to really press on the gas and hold on to competitive advantage in the United States and create a whole lot of new ARCHes and companies that do more amazing things?

I think investing in basic research is always a good thing. Increasing basic research investment is an awesome thing, and I think that, that, that probably will happen in this environment. And, um, so I'm, I also think that regulatory reform—and, you know, you have to use the word reform—just, you know, having the FDA be well-funded enough that it can kind of join the next generation of technology and embrace it, because it's actually going to make their life much easier, because it's, it's a, you know, kind of a data-driven, more systematic world, which is the thing, you know, that you go work at the FDA because you like data and, and you want things to be controllable and systematic. And so when you think about, um, the, the world we live in right now in cell therapy and gene therapy, right, it's not controlled and systematic, and that—

That, that's a risk, right? Well, I think, I think FDA, FDA needs more resources to, uh, put in place the data science infrastructure, the, the adaptive trial infrastructure, be able to hire the people, like staff up in the cell and gene therapy reviews, because otherwise there's going to be a big bottleneck. Yeah, I think that's true, and I think it's also, you know, even in places like CNS, I mean, we, we, we do need some reform in thinking there, right? We can't just think about clinical endpoints; we need to think about surrogate endpoints when you're thinking about Alzheimer's and Parkinson's and some of these other things. And, you know, people are like, 'Oh, you know, that's risky. We can't do surrogate endpoints.'

And, you know, it was kind of like, 'Really? You know, what's hypertension?'

It's a risk factor for heart attack and stroke.

That's right. Surrogate endpoint. We develop drugs all day long for hypertension. So this idea that we can't develop intermediate markers for Alzheimer's or Parkinson's or other chronic and debilitating disease, and that we have to have five- or 10-year-long clinical development cycles is just crazy. And so we do need to rethink that.

And when a drug fails to pan out on the harder endpoint later on, you can take the drug off the market or strip away that indication.

Absolutely. It's the same thing even today with COVID.

Why isn't J&J's vaccine out there now?

We can do a phase four trial, and if it's nasty, then we can pull it off. But right now, we're waiting two months after they have data to have an inevitable approval.

Well, it's coming, but there's supply constraint at the moment.

Yeah, and we're pretending that all this kind of stuff, it doesn't matter what the supply chain is. If it's just a million doses, it's a million people, right? So I just think that we need to have a different, we need to take the COVID sense of urgency and that should be everyday life. Yeah, I would personally take that. When it comes to drug discovery.

I'd take that J&J vaccine today if I could get it. Okay. Hey, Bob, I know we're almost out of time, but is there some area of investing that you really want to stay away from in biotech that you think is a fad or not quite ready for prime time? That's something that's not on your list for this fund.

I just think anything incremental. So we're just not really interested in things that don't have some disease-modifying outcome. So I guess we're really focused on things that are trying to make a large clinical impact. And we don't really think about the money when we invest. And it turns out like not thinking about the money is the way to make the most money, but you can't think about it like that. So you have to think about like having the most impact and having the best science and then not thinking about the money and taking the risk. And then that's the way actually to make the most amount of money. But you can't think about making the most amount of money when you're thinking about the long-term science and the clinical impact or it screws up your decision-making.

It almost is a new twist on the old George Merck saying, isn't it? Like, do something awesome to help patients—I'm paraphrasing here—and, and you know, you'll, you'll make profits. You'll do okay. And the better you do, the more the profits will be.

Yeah, it is. It's absolutely true. And he was right on. And I think it's, you know, it's the same thing with transaction, you know, we don't like transactional kind of deals. So everybody's like, 'Okay, you just raised a lot of money for that company. You know, it's the biggest round ever, whatever.' And, and almost certainly we spent like a month trying to cut back the size of the round. No. So we're trying, like when we were raising money for Sana or Resilience, we're trying to raise the minimum amount of money that we can raise to get the best investors in. And it turns out those investors have a lot of money. So you kind of end up raising a lot of money, but the goal was not to raise a lot of money.

The goal was to just get the best investors in and raise the least amount of money. And, and so all of those giant rounds that we're announcing could have been like way, way bigger. But it wasn't the right thing to do because, you know, you really just want to raise the least amount of money with the best people. 'Cause you can always get more money from those people if you need it.

Yeah. Money is a—as a tool to achieve the objective, right? I mean, it's, I don't look at a press release and a headline and say, 'You got—well, gee, Bob raised more money than this other guy down the street. Therefore, he's smarter or more successful.' Or, I mean, it's, it's, uh, I mean, to an extent, yes. I mean, people have confidence in you because of your track record, but, um, no, it's, it's about like how many new drugs that you can come up with or how many patients that you can affect. I mean, right?

Yeah. And I think it's one of those things where you, there are a lot of people in the business that are more transactional and that's where you just have to, you know, you can try to copy the phenotype, but if you don't have a science-driven, long-term company, you know, you don't, right. So you can, so I think that it's harder to tell these—when the markets are hot, it's hard to tell the difference. Um, but some investors can tell the difference. And people are saying, well, how is Sana so successful in their IPO being a preclinical company, right? It's because people actually looked at the data and thought about where they could be in five or 10 years. And those are the kind of people that drove that.

And it's not the kind of people that were saying, "What's your news flow in Q2?"

Right. 'Cause, you know, if, if that's how you think, you're not going to make these bets at all in the first place.

Yeah. We banned the, we banned the word "news flow" from ARCH.

Last thing I want to ask you, Bob: what's the one good book you've read lately?

I haven't read a book since the pandemic. Really? Nope. Not a single book since the pandemic. I've just been starting companies and being online and reading. I read a ton, but I just read online sources.

Well, what's a good go-to source? Maybe one that might surprise people that you really gain insight from.

I'm all over the place. I'm literally just following. When I'm bored, I'm just Googling words and following, you know, any, any, any interesting thing that I find. I don't know what it is. I was like Googling lots of stuff about Africa and like cloning rhinos yesterday. Um, and, um, who knows? I'm just all over the place.

You're still curious and you're still optimistic. How do you foster that or maintain it? Because there must have been some really shitty low days. There has been for everybody, right?

I think it's just an innate state. I've always been optimistic. I think if you're a seed venture capitalist, you have to be optimistic. Otherwise, you couldn't get up in the morning. The risks are too big and the problems are too many. So you have to have an innate sense of being able to kind of fix things and have a positive outcome eventually, even though every day there's some kind of fire to put out. And if you've been doing it for as long as I've been doing it, you know that there's always going to be a fire to put out and it's probably manageable.

Yeah. Yeah. Are you still long on America?

Oh, yeah. I think we're going to be fine. I think ironically—I tweeted this yesterday—but ironically, the fact that we have the best vaccine and the stupidest group of people that don't wear masks will conspire together to have the U.S. reach herd immunity probably before any other major country. So all the countries that are making fun of us that are shut down and have closed their borders will still be searching for herd immunity six months from now and we'll kind of have it and we'll be open.

So our simultaneous genius and idiocy is the secret to our success.

Yeah, that's, that's what I was saying yesterday. It is a combination of innovation and idiocy that, that have led us accidentally. But the cost is a half a million people, you know, and who knows what long-term morbidities. And that's, you know, that lays at the feet of not really, I think, actually, some our society, but more our leadership. And, and so I think that there's a lot of learnings, obviously, from this, but I do think that we're going to be okay. Cities will be reinvigorated, and there will be a spike in crime and things like that, and then there will be a reaction to that, just like there was in the '70s and '80s. The society is not going to fall apart.

America, the land of the geniuses and home of the idiots.

The amazing thing is that when it comes down to it, people care about their local communities. They care about these things. Once you don't hear all this bullshit on Twitter every day, you realize that the common elements amongst the left and the right in the country are actually larger than people think.

I actually do agree. It doesn't seem like it if you're on Twitter or these other kind of extreme polarizing sites.

People care about their kids and their families and their schools and their jobs and where things are going to go and how are they going to take care of people. Those things are mostly universal across, and they, frankly, in the U.S., people really do believe in the individual, even if you, you know, kind of listen to the AOC or whatever, you know, this is like, you know, AOC is like the classic political entrepreneur driven by the individual, even though they're preaching a different ideology, you know, that is a socialist ideology that the irony is like the, you know, they could only do that here. You know, it's much harder to do in a, to come from nowhere and, you know, come up, you know, even in Europe, it's kind of harder.

So I think the U.S. is still a pretty special place and we'll rediscover that, you know, hopefully through a set of

at least a couple boring years. We do still have a democracy, and we're gonna, I think, begin to start listening to each other and, you know, taking bits and pieces of everybody's ideas and putting them to work toward solving actual problems. I mean, we haven't, we haven't done it for a while, but, um, I, I definitely see that same thing out there. My friends on the left and the right, um, you know, that we will find a way to talk to each other again and, you know, start agreeing on things like, let's, let's beef up the, the NIH, the CDC, and the FDA, for instance, because like they do important things, and, you know, they enable companies like Moderna to come up here. That doesn't really just happen by accident. It doesn't happen in other countries, not to the same extent that it does here. Cool. Well, thanks so much, Bob. Thanks for joining me today on The Long Run. Thank you.

Thanks for listening to The Long Run, a production of Timmerman Report. Pedro Rosado of Headstepper Media was the sound editor. Music is from D.A. Wallach. See you next episode.