TLDR Biotech sat down with Elliot Roth, a serial biotech founder, community lab evangelist, and self-described biopunk who's started 8 companies, 4 nonprofits, and scaled a biomanufacturing operation across 14 countries.

Over the course of our candid and unfiltered conversation, Roth laid out a vision of biotech's future that's equal parts pragmatic and provocative, touching on everything from the dysfunction of PhD programs, the ethos (and advantages) of Biopunk and community labs, and why intensifying Chinese competition means only weird science will survive.

Is the biotech industry broken? Elliot Roth thinks so.

After spending seven years scaling a biomanufacturing company across 14 countries, then launching 10 companies in a year at a venture studio, Roth has decided the entire system needs rebuilding from scratch. His approach is grassroots, applying almost a “move-fast-and-break-things” SaaS model to biological projects, while simultaneously upending the traditional big budget, VC backed paradigm. He calls the movement “Biopunk”.

Over the course of our conversation, Roth laid out a vision of biotech's future that's equal parts pragmatic and provocative, touching on everything from the dysfunction of PhD programs to why Chinese competition means only weird science will survive.

If you're in biotech, chances are you've done a PhD or you're surrounded by people who have. Roth's experience should sound familiar to anyone who's been through the academic gauntlet - and makes for a perfect villain origin story.

"I was trying to go down the route of the PhD and went to my graduate advisor and was suggesting all these experiments, but all I did was do dishes for months," Roth recalls. "And then I found out that he was scooping me and writing papers in my name without giving me any credit."

When Roth complained to the principal investigator, the response was blunt: "Tough. That's just the way academia is." He also saw his PI never spent any time in the lab, doing what he trained to do - instead spending all his days writing grants and scrounging for funding.

Roth decided he didn't want to sign up for "10 years doing other people's work" only to end up spending his career writing grants instead of doing science. But the big issue that Roth identified is that the PhD is basically mandatory for entry into biotech; there’s no discussion around if it’s the best possible training for building a company.

"It takes longer to do a PhD in the United States than it took to fight and win World War II," Roth notes, referencing a quote from his time at Deep Science Ventures. "And then 99 out of 100 PhDs sit on the shelf and never end up getting used. Their thesis just sits on the shelf gathering dust."

The hard sciences outlook on a PhD contrasts starkly with other disciplines, "How many people in computer science actually have a PhD? Very, very few," he points out. "They focus on portfolio. What have you built? You are only as good as what you built and what your GitHub says that you've built."

The PhD has become a proxy for two things: access to lab space and training to build a company.

But what if you could get both without spending a decade in academic servitude?

This is where Roth's Biopunk movement is breaking in: by setting up, low-cost, non-profit laboratory spaces around the world that charge a couple hundred dollars in rent instead of thousands, Biopunk is enabling those with ambition and an idea (but potentially with no PhD or industry connects) to set-up shop, experiment, and spin-out companies.

"Most laboratory rentals start at $1,500 and up, no matter where you are in the world, which means that you can't pay that out of pocket," Roth explains. "That's rent, right? You have to choose between rent and laboratory space. You're going to choose rent. So this prices out a lot of potential start-ups an ideas."

The conventional path forces you to raise venture capital just to access a lab bench, and that's before you've proven anything about your idea.

"You have to raise venture capital money just to get access to a lab to start doing an idea," Roth says. "First, you have to raise venture capital money - that doesn't really make sense."

His lab in San Francisco illustrates what's possible when you lower the barrier to entry. In just four months, 60 different projects have started in the space.

The key is reimagining what a hackathon looks like in biology - and Biopunk looks to be doing it well.

"Our hackathons run a little bit differently," Roth explains. "First weekend is a concept pitch. Then you work in the lab during the week to come up with your proof of concept or whatever it is. And then the subsequent weekend, you demonstrate what you ended up doing. And then kids win prizes."

They've given out thousands in prizes across categories like longevity, biosecurity, AI, and biovisualization, and the big winners get free lab space. The goal is simple: "widen the funnel" of people getting involved in biotech, and give them a chance to disprove ideas quickly before committing years and millions of dollars.

"Most experiments, if you're scrappy and paying attention and know what you're doing, can be done in the span of just a couple days," Roth argues. "That being said, you need access to a lab. And so without access to a lab, it's really difficult to go and do those experiments."

Let's say you do things the traditional way: you get your PhD, you've got a promising idea from your university research, and you're ready to spin out a company. Here's what Roth says you've already given away:

If you spin out from a university, the university typically owns about a third of your company right from the start. If you need to raise money from investors to afford lab space, you're giving up another 15-30% in early rounds. And if you end up working with a big VC as an investor, "they end up taking 90% or more of the company, leaving the founders with virtually nothing at the very end."

So before you've run a single experiment in your expensive Kendall Square lab, you've lost somewhere between 30-50% of your company just to get access to the infrastructure you need to work.

The worst of it is, according to Roth, that it’s all just a big recycling of the same money: "A lot of VCs own laboratory spaces in Kendall Square," Roth notes. "And so what they're doing is they give money to a company and the company gives them money back to pay for laboratory space. And so it's already a discount on your investment, right? It's just money moving around."

The VC model, Roth argues, is also "particularly broken” because it wasn’t designed for the current environment and can't adapt fast enough.

"LPs provide funding based on specific risk profiles and guardrails, but when that landscape continues to change on a quarterly, if not monthly basis, by definition, the LP investment that's made and the LP documents you have in place aren't going to be fit for purpose for that fund," Roth explains.

The example he gives is phase three funding. LPs historically funded these assets expecting licensing deals with big pharma to provide the commercialization pathway. "Now, when the licensing deal doesn't happen, that model no longer works."

For most biotech, their life typically revolves around years of begging for VC cash followed by an absolute deluge of money - either via acquisition, partnershing/licensing deals, or going public. Bone-dry famines or flash-flood feasts are expected when entering this industry.

Roth however argues that biotech has completely overlooked one avenue: small business biotech.

"If you’re a biotech, we exist in a time where it's so much better to be in control of your own destiny by focusing on selling something that makes money," Roth says. "Something that people don't really know is Genentech, that poster child that brought biotech into the mainstream, was arguably profitable from month three."

Roth champions companies like Plasmidsaurus, which hit $50 million in annual recurring revenue within three years. "Their marketing is fantastic," he notes, having recently spoken with their head of business development in London. The insight she shared: "Even if you're a B2B company, you're selling to a real person. And that real person wants to be treated like a person and wants to have a good experience and have a good relationship."

The parallel Roth draws is to the early computer industry. "They had all of these small businesses before we ever got an Apple computer coming along," he explains. "And if we're trying to leapfrog that era, you're still missing out on a lot of the core individual pieces that construct our greater ecosystem."

Right now, if you're a PhD graduating, "you're kind of out of luck because it's easier to start a company and raise money than to get a job in this space because there really aren't too many jobs anymore."

And Roth sees this inflection point accelerating as VC dollars look for somewhere to go: "B2B SaaS is dead because of AI and now millions of dollars of VC will be looking at what to put their money into - I think this means the era of biotech is upon us."

The Chinese biotech industry has been on a rocket ship as of late, with no signs of slowing. To no surprise, this is came up a lot in our conversation, with Roth providing his own opinions on what it means for conventional biotech innovation:

"There’s now an army of Chinese biotechs chasing after all the same druggable targets that every other biotech is going after," Roth warns. "So if there's 3,000 Chinese biotechs in a midsize industrial park in Shanghai and they're all focused on the same things that you're going after, what chance do you have? They'll do it better, faster, and cheaper."

Roth explains a concept called "kiasu" that's prevalent in Singaporean Chinese business culture. "It's basically a business form of FOMO (Fear of Missing Out). And in that, it's a method of avoiding risk. This idea of making sure that you are thrifty, that you're careful, that you proceed incrementally."

Another reason that China might be running ahead is due to the way they structure investments, and how much more founders in China have to lose over a failed venture.

As Roth puts it, "I've heard things like, if you're going to receive investment, it comes quite a bit from the government itself. And in addition, you have to put up your house, your car as collateral. And so the downside is that much more, you end up experiencing the downside much more. And so people work insanely hard because their lives are at stake."

Combing all of this, we can understand why big pharma has been absolutely ravenous for China-based licensing deals. "When it's easier to buy a marked-down Chinese out-licensing deal, why would they ever buy something that's more expensive from a Western company?" Roth asks.

He argues that the only way to compete with China is stop competing on the same druggable targets and the same approaches, and to go all in on the “weird”.

"You might as well focus on really, really weird things. Otherwise, you'll never win in that kind of market. You're just being out-competed by quantity."

This leads to what might be Roth's most important thesis: "In hard times, only the strange survive."

"A lot of the companies I like seeing are the weird ones," Roth explains. "It's the ones that are focused on non-model organisms that are scaling using extremophiles and biomanufacturing using organisms that aren't E. coli and yeast and CHO cells and other things like that."

He's interested in companies using new vectors outside of AAVs, lentivirals, and LNPs. Companies going after different druggable targets beyond "the 60 or so druggable targets everybody's focused on."

Roth’s logic appears sound and straightforward: truly novel approaches, the weird science that doesn't fit conventional frameworks, can't be easily copied or out-executed through sheer quantity.

"I think it’s kind of like in hard times, only the strange survive in these places," Roth says. Being contrarian is not an aesthetic or a fashionable statement, but a matter of sheer survival - it's about finding competitive moats that can't be overcome by having more scientists working longer hours for less money.

This is where Roth sees three major alternative funding and operational models emerging:

First, there's DeSci - decentralized science using crypto mechanisms. "I think that's really interesting too, because it's like scientific crowdfunding, using new financial mechanisms to go about doing that," Roth explains. It's essentially a way to fund early-stage work without giving up equity or needing institutional VC backing.

Second, there are decentralized research organizations (DROs). "You'll be able to get insight into what's going on at these CROs and CDMOs via camera systems, via blockchain-enabled technology, like all kinds of different things that enables you to trust the work that's being done," Roth says. He's working with a company called Biodesix that's building this infrastructure.

The idea is to enable virtual biotech companies - "a couple of executives" who farm out work to CROs and CDMOs globally - but with much better transparency and verification than currently exists.

"We built up quite a bit post-COVID for CDMOs and CROs, right? And so now there's huge competition in the CRO and CDMO space, but there's a complete lack of trust and transparency."

Third, there's direct-to-consumer models. Roth mentions LillyDirect and PfizerForAll as "just the very start" of pharma companies realizing "instead of going through insurance and billables and waiting on the FDA to catch up, what they can do is sell direct."

He's also seeing companies do challenge trials in special economic zones like Prospera or in Southeast Asia, where "instead of the trial sponsor paying for the trial, there are patients who are paying out of pocket to get early access to longevity therapies, cognitive enhancing drugs, all kinds of strange things that are out there on the very fringe."

As with many things on the edge, speed is the name of the game: "I know of some companies that have gone from concept to in-human within eight months."

When I brought up the concept of "Worried Well" - people who aren't sick but spend heavily on preventative therapies - Roth immediately connected it to the broken US healthcare system.

"Medical tourism that happens outside of the United States accounts for billions and billions of lost dollars," Roth notes. "People would much rather go to another country to get a procedure done, and the economics make perfect sense.”

Roth continues with a myriad of examples, beyond just the cosmetic: “I think by some estimates, you can go to Spain, get a double knee replacement, stay in a resort, and do that all five times for the same cost it is to do in the United States. These people are flying Turkish airlines to get hair implants in Istanbul, right? Or you go to Tijuana to get your teeth done. It's so much cheaper to get these things done elsewhere outside the United States.

"My aunt died of cancer, and one of the things she did before she died was she went to Budapest and got cancer immunotherapy."

The US healthcare system already knows this is happening. "They're starting to do executive healthcare and concierge medicine programs out of the Mayo Clinic, out of the Cleveland Clinic. They've started doing this for $50,000 a pop. You can go, you can get every single diagnostic you could ever want."

Meanwhile, in Southeast Asia, "there's exosome injections and stem cell therapies and all kinds of different things."

With the same Libertarian ideals that spawned Biopunk, Roth has no problem with people doing what they want within their economic means, regardless of how “weird” or out-there the procedure might be;

“The problem,” he states, "is that they’re not getting diagnostics done. They go and they have these therapies, but who's tracking what ends up happening to them after the therapies are administered? No one's doing that. So there's no data that's actually generated on whether or not these things work or not."

Roth had a conversation with Jim O'Neill, the (now former) Deputy Director of Health and Human Services, that suggests a major regulatory philosophy shift might be coming.

"He said to me, he said, you know, I think the FDA is going to shift into regulating for safety, not for efficacy," Roth explains. "Right now, they regulate for both safety and efficacy. And instead, it'll be up to the companies, and it'll be up to the public to determine what is the efficacy of a drug."

This would be a massive change. And Roth has plenty of examples of FDA dysfunction to justify reconsidering their mandate.

"The last time that we had a new ingredient approved for sunscreen was like 1999," Roth says. His friend was starting a sunscreen company, and the obvious solution seemed to be importing better Asian sunscreen formulations. "He's like, well, the FDA will shut me down. And I was like, that's the best marketing you could ever get. You know, like, having the FDA try to shut you down for something that people already know is better, already shows the dysfunction and hypocrisy of a system."

For Roth, this exemplifies the "biopunk ethos" - deliberately highlighting system absurdities through direct action.

Always one to sign a spotlight on dysfunction, Roth also spared no time going after the blockbuster model that’s sustained pharma for the last several decades, and how (in his opinion) is a scourge on true innovation.

As Roth bluntly and politically-incorrectly put it: "The industry is run by a bunch of pale, stale males, right? I call this the old white man problem."

He's referenced Thomas Kuhn's observation that "scientific paradigms advance on the basis of one funeral at a time" - change happens when the people invested in the old system literally die off.

"When you look at a board of executives, and there's 10 executives and three postdocs and one PhD, you better believe the three postdocs and the one PhD are doing all the work. And the executives are just raking in checks and dealing and wheeling at JPM."

And what are they dealing at JPM? "They go to a talk from Goldman Sachs, where they're determining how much money you can make on a sick person and keeping them sick instead of curing them. Because curing people doesn't make money."

The blockbuster drug model is dying because "everybody's biology is different. And the fact that we've been treating the average person makes absolutely no sense."

Roth's favorite analogy: "The US Air Force used to design aircrafts for the average pilot. And what would happen is that in the event of aircraft problems, they had 25% fatalities. And they realized that if they made the cockpit adjustable, that reduced their number of fatalities almost to zero."

He argues that the same principle applies to medicine: "We exist in this realm where everybody is an N of one study. And the fact that we treat people as an average is just absolute insanity."

Even the GLP-1 agonist success story - he argues it to be the last true blockbuster - was basically accidental. "We’re not looking back in time and saying ‘Oh yeah, we totally knew Gila monster venom was going to be the thing that enabled people to be stupid skinny’. There's no conceivable way that you would realize that."

And as the US continues attacking foundational research (while China pours money into the space), "these kind of wacky, seemingly non-consequential discoveries at the time that end of being world changing won’t happen, at least in the US. We may be entering a drought of new targets and new ideas."

According to Roth, mot Pharma M&A teams already know this: "Most of these M&A teams realize they only have their job for the next four or five years before they're out of money," Roth says. "And it's because Chinese companies are coming for them."

When it comes to fundamental science in the US over the next four to five years, Roth’s assessment is as bleak as Russian Literature:

"We've irreparably harmed science in the United States for generations to come. I think it’s over," Roth denotes flatly. "It's different, right? There’s a reason that the US was #1 in innovation for so decades, and it's that fundamental base level of the scientific industrial complex. But it’s quickly being dismantled and disappearing as we speak.

"Most scientists are weeks away from losing their jobs at top-tier universities. Most universities are cutting funding. That pullback has spooked people to the point that there's not the same kind of investment happening in the ecosystem on the fundamental side."

Add in H1B visa restrictions, and "you've just removed a big pool of scientific workflow. So yeah, you just shot yourself in the foot, America. Great job. Good stuff. Way to go."

Meanwhile, "China's picking up the slack."

Through all this, Roth still sees San Francisco as maintaining a unique position: "The conventional thing that I've been hearing repeated in most people is that they will still travel to San Francisco to raise money because that is the only place where people are willing to take a risk on early-stage biotech."

But the broader ecosystem that fed San Francisco's dominance is crumbling.

Roth's advice to his audience - those hoping to dive into the the traditional VC-backed biotech world - is to start taking these alternative funding and corporate models seriously.

"Rather than just considering conventional traditional biotech paths of like pursuing a PhD, going academia, or if you're in industry, going down the rabbit hole of raising money for an idea, going into like a pretty well-polished laboratory space and trying to do your standard preclinical, phase one, phase two, whatever," Roth suggests taking a different approach.

"Take a look at these decentralized research organizations as a means of lowering the capital cost of doing work and doing it globally so that you don't have to spend as much money getting to market. Look at your community labs as doing your proof of concept so that you can spend money out of pocket and don't have to give as much away to VCs. And then look at decentralized science as a means of raising capital for your concepts and your ideas.

"These are all different funding and operational mechanisms that legitimate traditional biotech is also considering as well. And there are new routes to market that I think over time will become more and more the norm."

Though it’s still chugging along as if nothing is amiss, Roth argues that cracks forming in the Series A to Z to IPO/acquisition conveyor belt amongst biotech. And with increasing Chinese competition on America’s doorstep, the time is now or never to re-invent the broader biotech space.

Roth's rubric for survival (and innovation) is straightforward, at least to spell it out (not so much to execute): lower your costs, maintain control of your company, focus on truly weird science that can't be commoditized, and find alternative routes to market that don't require hundreds of millions in VC funding and a decade-long regulatory slog.

Whether traditional biotech and future founders are ready to hear that message is another question entirely.