
Episode #34
How Venture Capital Backed America's Biotech Engine | How America Makes Medicine Ep. 5
Venture capital helped build America's biotech industry, but what happens when that capital stops flowing? In Episode 5 of the How America Makes Medicine series, John Stanford sits down with Michael Rome, Managing Director and Head of Therapeutics Investing at Foresite Capital, to explore the role of biotech venture capital in building America's drug development ecosystem. The episode examines the history of venture capital and biotech investing, tracing how America's unique approach to financing high-risk science helped transform academic discoveries into companies and, ultimately, new medicines. From early investment models to the rise of venture-backed biotechnology companies, the history reveals how investors began taking risks on scientific ideas that traditional pharmaceutical companies were often unwilling or unable to pursue. John and Michael then explore how biotech investors evaluate companies, scientific opportunities, and emerging drug-development technologies today. Their conversation covers early-stage biotech investing, specialist versus generalist investors, biotech IPOs, mergers and acquisitions, capital formation, and the role investors play in determining which scientific ideas move from the laboratory into clinical development. The discussion also examines how drug pricing policy, FDA policy, government regulation, and uncertainty in Washington can influence investment decisions and the availability of capital for emerging biotech companies. John and Michael discuss the importance of maintaining a strong U.S. innovation ecosystem as biotechnology becomes increasingly global, including competition for scientific talent, investment, and drug development between the United States and China. What happens to American drug development if investors become less willing to take scientific risks? We explore The history of venture capital and American biotech innovation Michael Rome and the role of therapeutics investing How venture capital helps fund scientific discovery Biotech startups and early-stage drug development How investors evaluate biotech companies and scientific opportunities Specialist versus generalist biotech investors Biotech IPOs, mergers and acquisitions Capital formation and the future of biotech investment Drug pricing policy and its impact on biotech investment FDA policy, government regulation and investment uncertainty America's biotechnology ecosystem and global competitiveness Competition for scientific talent, investment and innovation The role of venture capital in bringing new medicines to patients This episode is part of How America Makes Medicine, a seven-part series exploring the people, science, institutions, and business decisions behind 250 years of American pharmaceutical innovation. From research universities and biotechnology startups to pharmaceutical manufacturers, investors, regulators and patients, the series examines how America's medicine ecosystem was built and what it will take to keep innovating. Join the Conversation⬇️ What do you think is the biggest challenge facing biotech investors today? How important is venture capital to developing the next generation of medicines? Can the United States maintain its leadership in biotech as global competition increases? Drop your thoughts in the comments below Subscribe to the Making Medicine Podcast so you don't miss the next chapter of How America Makes Medicine, our seven-part series celebrating 250 years of American pharmaceutical innovation. If you're new to the Making Medicine Podcast, we're happy you're here! Follow us for more: https://x.com/MakingMedPod https://www.instagram.com/makingmedicinepod/ https://www.linkedin.com/showcase/making-medicine-podcast/about/?viewAsMember=true Timestamps 00:00 Introduction: Venture Capital and the Drug Development Pipeline 01:36 Headlines: mRNA Cancer Vaccine and the FDA 05:15 History: How Venture Capital Became Part of Medicine 07:29 Genentech and the Birth of Venture-Backed Biotech 09:30 Michael Rome's Path from Scientist to Biotech Investor 12:40 Why Los Angeles Is Emerging as a Biotech Hub 13:32 Inside Foresight Capital's Biotech Investment Strategy 16:00 A Day in the Life of a Biotech VC 19:15 Don't Chase the Headlines: How Investors Evaluate Biotech Data 21:30 Specialist vs. Generalist Capital in Biotech 24:51 What Happens to Medicine Without Venture Capital? 27:15 Washington's Growing Influence on Biotech Investment 30:44 The IRA and the "Pill Penalty" 33:00 China, Biotech Licensing, and Bringing Innovation to the U.S. 36:53 How Biotech Capital Gets Recycled in America 39:16 Inside a $2 Billion Biotech Exit 43:46 Closing: The Day in the Life of a VC DISCLAIMER: We're reporting on the headlines, not making medical recommendations. For personal health questions, always consult a doctor. #HowAmericaMakesMedicine #biotech #venturecapital #drugdevelopment #pharmaceuticalinnovation

