Medicines are getting a blockchain makeover

In late August, the centuries-old pharmaceutical company Pfizer did something new: embraced the blockchain.

In a request to join VitaDAO, a blockchain-based biotechnology collective that requires cryptocurrency purchases, Pfizer expressed interest in VitaDAO’s search for life-prolonging drugs and wanted to work with the collective as a stakeholder (Pfizer declined to comment on this article) .

The decision is likely to pass (so far 100% of votes are in favor of Pfizer joining the DAO). If so, the pharma company will join VitaDAO in mid-October as a stakeholder and, potentially, a future acquirer of any intellectual property that emerges from it.

Pfizer’s interest represents a shift in the decades-old biotech life cycle, one dominated by public research universities and big pharma giants, both of which work hand in hand to create many of the drugs we see today.

Enter DAOs

DAOs, decentralized autonomous organizations, allow anyone to join and vote on what kind of research to fund, and what to do with those findings later. Emerging as another way to fund research projects, these initiatives often act as the National Institutes of Health (which provide research grants), venture capital firms, and startups themselves. In some cases, intellectual property resulting from research belongs to the DAO as a whole.

“A DAO is almost like a collaboration, and it has to be agile, and try not to fall into a very strict box, and see where they can have the most impact,” said Laura Minquini, founder of biotech collective AthenaDAO. “And that, to me, is the biggest advantage of a DAO.”

The research gap and ‘replication crisis’

Most drugs on the market today have gone through a process that goes like this: Researchers at a research university discover a molecule that can treat a disease, the school takes out a patent on it, and that patent spins out into a budding biotech startup seeking venture capital funding . After enough research and development, a large pharmaceutical giant will pick up the assets or buy the company outright.

Because of this, taxpayer dollars that fund research at public universities often lead to privatized therapeutics that are sold back to the public—although the argument can be made that much of the drug-making process occurs when the research is privatized. And because universities benefit from needle-moving scientific discoveries, some subjects are far more researched than others.

“Scientific research stimulates novelty rather than replication,” said Erik Van Winkle, chief operating officer of DeSci Labs, an organization that aims to decentralize science. “If you’re a postdoc, what gets you tenure? What gets you a promotion? What gets you funding? It’s finding this incredible truth about the world.”

This has partly created the replication crisis, an ongoing problem in the scientific community where the majority of published research cannot be verified because it cannot be replicated, which is a key step in the scientific method.

“One paper cites 40 others, who all cite 40 others who cite 40 others,” Van Winkle said. “It turns into this giant tree of knowledge where, if you have underlying support structures that don’t replicate, that’s quite a problem.”

A way to fund underfunded science

You may remember Ryan Breslow as the founder and former CEO of fintech platform Bolt who went on a Twitter rant slamming competitor Stripe and Sand Hill Road venture firms. After stepping down from the helm of the company, he launched Love, a biotech startup that emerged from stealth in August with $7.5 million in funding.

Perhaps it’s strange that the CEO of a prominent fintech platform now leads a biotech company that uses intense science and chemistry to feed a slow-moving regulatory body like the Food and Drug Administration. But Breslow’s startup leverages cryptocurrency and the blockchain through a DAO.

The research gap is where DAOs like Breslow’s come in. On the one hand, Love will act as a nutrition company. On the other side are DAOs that will crowdfund research and clinical trials for mostly homeopathic cures that are anecdotally well-known but have no empirical evidence to support their effectiveness. They often cannot be patented and therefore do not see much love in the research space.

Breslow said part of the inspiration came from his two-year struggle with chronic back pain that made it difficult to exercise and hampered his mobility. After seeing a plethora of doctors who suggested medication and surgery (both of which proved ineffective), Breslow turned to meditation and therapy to reduce stress. After three months the back pain was gone.

“I’m not the only one who believes in these less traditional healings [methods]. There are a lot of people. The problem is, there’s no data to support it, Breslow said. “To me it’s just a story. To the next man, it’s just a story. For people who believe in homeopathic remedies, herbs and plants, psychedelics, they are just stories. There is no clinical data.”

Homeopathic methods are often clinically uncertain, but that does not mean they are not useful to people.

How Love’s DAO works

As for Breslow’s venture, people can buy tokens to enter the DAO and participate in conversations, suggest what kind of plants or supplements they want more research on, write suggestions and vote. The money raised by DAO will be used to run clinical trials on whichever plant and clinical indication receives the most votes (for example, using turmeric to reduce inflammation).

“How do we get data on these alternative pathways of healing? Because pharma won’t produce the data, because you can’t patent a plant and you can’t patent yoga or meditation,” Breslow said. “…we want to end these ancient the debates by providing data.”

Not the only one

It is difficult to say how many DAOs are operating in this area, but blockchain has long been heralded for its use cases in healthcare, particularly in patient data. Most patients do not have access to their full health records since birth, making it difficult for doctors to accurately assess the full extent of one’s allergies, injuries or illnesses. Startups have emerged to make it easy to share patient data between different providers, such as a primary care physician and an OBGYN, who can add to the patient record without creating their own.

Per Crunchbase data, blockchain-related healthcare startups raised $34.6 million at their peak in 2019, and just $18.7 million so far in 2022.

Love’s DAO is far from the first to attempt this new structure for drug development that effectively bypasses the traditional research and development model. Perhaps the best-known biotech DAO is VitaDAO, which focuses on the early development of drugs related to helping people live longer. The organization has funded around 15 research projects from university researchers who might otherwise not receive research grants.

VitaDAO was spun out of Molecule, a software platform that recently raised $13 million in seed funding to create DAOs that will support a variety of different types of research.

Heinrich Tessendorf spent years at a German pharmaceutical company, shunned by the research and development firms that created the drugs he sold. He joined VitaDAO in 2021, then became the Community and Marketing Manager of Molecule a few months later.

“Suddenly I was like part of this community and interacting with everyone around the world. We have researchers in Denmark. In the US, there were people from Harvard, MIT, Stanford, all coming together and collaborating,” said Tessendorf. “.. . it just creates these incentives to cooperate.”

There is also AthenaDAO, which strives for longevity for women. Minquini, who was an active participant in VitaDAO before creating her own, started AthenaDAO. The DAO appears to fund female-led research at a time when female researchers receive 24% less money in research funding from national grants than male researchers.

“I think one of the hardest things you realize is how many things don’t happen because of the structure we have now,” Minquini said. “How many [scientists] cannot bring their ideas to life due to lack of funding. … So how can you support researchers and research in a way that is effective so that it actually gets to someone like you or me and makes an impact in our lives?”

Illustration: Dom Guzman