New Thoughts On Lack of Cargo

It is always a welcome read when a VC chimes in on what ails the Cargo Cults. What do the businessmen think causes the lack of Cargo? We here at the CCS have been trying to make the point since 2006 that cargo cult science is the problem. Feynman said it best:

Now it behooves me, of course, to tell you what they're missing. But it would be just about as difficult to explain to the South Seas Islanders how they have to arrange things so that they get some wealth in their system.

Wealth in their system. Literally, this is what a VC wants to figure out. How can they earn more money investing in people who seem to abandon their science degrees to pursue office jobs for which they are not prepared? Most often, no wealth is put back into a formerly wealthy VC fund. Most life science VC funds have given up since I began back in 2006. After billions and billions of dollars have been spent, they still don't understood why they failed, just as the Cargo Cults still do not know what they are doing wrong.

In this Xconomy article we get more insight as to what one VC thinks is missing. The author, Standish Fleming, starts out by admitting that things haven't been going well lately. "Today neither biotech nor pharma are producing a sufficient supply of new products. If we can't figure out a way to profitably finance early development, this industry will implode." It is interesting to see how the industry leaders are starting to break things down. Early development will ruin the industry. That is like saying that designing cars that don't run will destroy the automobile industry. Seems obvious. Early development is the foundation of this industry. It is the hardest part. Without it you don't have a product, just a pill filled with sand.

The article goes on to place the blame directly on the relationship between big pharma and biotech.

The problem lies in the market-driven relationship between biotech and pharma. The best way to explore outside the established frontier of knowledge is to run many small experiments, rather than pharma’s traditional approach of a few gold-plated studies designed not to end someone’s career.

We, of course, disagree. There is no difference between big pharma and biotech when it comes to science. Many small experiments are done at both big pharma and biotech. Studies are always designed not to end someone's career. The view from down here (the laboratory) where early development takes place is the same in big pharma and biotech. People fear for the careers. The studies that present a thumbs up or down for an entire project are studies you do not want to be around. Heads you win, tails you lose. How about we design the experiment more akin to the roll of the dice to increase our odds of maintaining our jobs after the outcome? What if we give that pair of dice to a young person and have them go into the laboratory to roll? Report back to us if you get a 7 or 11. We'll prepare a scientific explanation of how you got the desired numbers. If you fail, that is your failure. We are over here, doing business related things. Big Pharma or little biotech, the degrees of separation from science to business are all the same.

Let's look at a case of fraud first. Silvia Bulfone-Paus ran a laboratory rife with scientific misconduct. Silvia had the power. She was either the senior or corresponding author of six papers that contained image manipulations stemming from her lab. Who's fault was this? Silvia would like us to believe that it was two post-doctoral students in the lab, Elena Bulanova and Vadim Budagian. Silvia Bulfone-Paus stacked the odds in her favor by  sending post docs in to do her dirty work. She didn't have to run the risk because her people would not only do the work, they were there to take the blame. In the end however, science was not done. Without science, you do not have an early development project worth pursuing. 

Back to our VC theories. You can branch off from Silvias work on either a big or small study. Either way you are going to fail eventually. 

Now let's take the case of Dolly the Sheep. Here we have a non-fraudulent body of work that involved a small study. At least it appears small on the surface. One animal. Scientifically however, this was a huge step. A living being developed from a cell that came out of a laboratory. The bigger company came along and bought up the rights to advance the work. The scientists who cloned the sheep moved on. Geron, the big company could not develop the techniques of cloning however. The science needed more work at a level only dictated by science. Businessmen cannot create business models to make science projects succeed. Timelines put into Gant charts by MBAs or undereducated/over-employed PhDs miss that thing where wealth is put into the system. 

Back to our VC theories. You can branch off from Gerons inept business approach to science, big or small, and you will fail. 

What is the solution then? I too would like to mitigate risk. The fear of losing ones job because the results you get in the laboratory must not become a speed bump in reporting the truth. The most effective business model for scientific innovation is one where the truth is the boss. That cell culture where RNAi is suppose to prevent some protein  from being expressed is the boss. If it says the protein was expressed at the same level, RNAi or not, you must obey. That means a far greater understanding of what takes place in the laboratory is needed in big pharma and small biotechnology. If it is so easy to blame a technician for not seeing what you want to see, the methods your technicians are employing need work. Not to get the results you want but to believe what you are hearing. 

What Standish Fleming has completely sidestepped in his analysis is that of an under-trained workforce in early development. The culture has long been that of the Silvia Bulfone-Paus laboratory. A new paradigm must be set up. The laboratory must be feared. The lab must not have it's people ridiculed and forced to defend on any other principle than those laid out by the techniques they are applying. Often times the science and technology behind such techniques is far more sophisticated than any VC claptrap on how to make money from money. If the technician feels the need to photoshop in an extra band on the western blot, s/he has been subjected to a leadership problem.

To put this in VC terms, Bernie Madhoff gave his investors what they wanted. In order to do so however he had to run a Ponzi scheme until the day they locked him up. In the long run, it doesn't pay to keep running a system without the proper wealth building arrangement. The problem is happening in the power structure between science and businessmen. The power is in the hands of the latter, because they underestimate the power of science. It's not working out.