Vivek Ramaswamy caused quite a stir during the Republican debate, and he had a similar impact in the field of biotech. Despite being the youngest candidate on the debate stage that Wednesday night, he didn’t shy away from challenging his fellow Republican presidential hopefuls. He questioned their ethics, ridiculed their commitments, and asserted that his lack of government experience uniquely positioned him to address the nation’s issues.
This was a familiar demeanor for Vivek Ramaswamy. Well before he was discussing Perestroika with Mike Pence and predicting Nikki Haley’s future in the defense industry, Ramaswamy had already brought a bold approach to the biotech sector. In 2015, at the age of 29 and freshly graduated from Yale Law School, he took on the trillion-dollar pharmaceutical industry, asserting that its drug development strategies were fundamentally flawed.
His company, Roivant, aimed to outmaneuver giants like Pfizer and Merck by identifying hidden potentials in medicines that these industry giants were too constrained by bureaucracy to recognize. Ramaswamy confidently claimed that this approach would lead to “the highest return on investment endeavor ever taken up in the pharmaceutical industry,” as he told Forbes during that time.
Just as he encountered both enthusiastic cheers and thunderous boos during the recent debate, Ramaswamy’s actions in the biotech sector were equally polarizing. Some of his peers viewed him as a visionary outsider, disrupting an industry that had grown stagnant at its upper echelons. Others, however, regarded him as a profit-driven opportunist capitalizing on the booming biotech landscape, employing a seemingly gimmicky business strategy that was more likely to enrich him and his hedge fund associates than to produce new medicines.
In 2016, a Massachusetts Institute of Technology business professor voiced skepticism, stating, “I know I run the risk of looking like a fool two or three years from now, but this sounds like some people are being bamboozled.” A year later, Ramaswamy’s overconfidence faced a significant setback when an Alzheimer’s disease treatment that was brought into the spotlight through a closely watched clinical trial failed, resulting in a loss of $2 billion in value. This failure lent credence to the idea that Roivant’s supposedly groundbreaking business model might have been overly ambitious.
Following this setback, Ramaswamy expressed personal remorse and acknowledged the challenge of failure. He channeled this experience into a renewed commitment to the company’s success. By this point, Ramaswamy was already a well-known figure in the biotech industry, not unlike Martin Shkreli, a fellow millennial.
Roivant was structured with contingency plans in place. The company had a portfolio of medicines developed by numerous subsidiaries, and its financial stability was ensured by significant investments from notable sources like SoftBank and Viking Global.
In 2021, Ramaswamy transitioned from CEO to executive chairman, and Roivant evolved from a disruptive force to a more conventional pharmaceutical entity. When Ramaswamy departed from the company entirely in February 2023 to embark on his presidential campaign, Roivant had six FDA-approved medicines, with several more in advanced stages of development.
While the jury is still out on whether Roivant can fulfill Ramaswamy’s initial promise of being the most impactful investment in industry history, its valuation stands at approximately $9 billion. Interestingly, the very companies it once aimed to challenge, such as Pfizer and Merck, are reportedly considering acquiring it.