Closing Bell - Manifest Space: Medication in Microgravity with Varda Co-Founders Will Bruey and Delian Asparouhov 8/31/23

Episode Date: August 31, 2023

As Medicare looks to drive down medical costs, pharma manufacturing is going beyond global. For years, drug companies have used the ISS to research and develop new discoveries. But until Varda successfully completed a 27-hour experiment in orbit growing a drug used to help treat HIV. Waiting on a reentry license for its first spacecraft, Morgan sits down with co-founders Will Bruey and Delian Asparouhov to discuss in-space manufacturing, hypersonic missile testing, and (unofficially) replicating LK-99—speculated to be a potential superconductor.

Going beyond global. That's what's happening in pharma. For years, drug companies and academics have been utilizing the International Space Station for experiments to bring new discoveries back to Earth. But until now, no one had ever done this in a fully commercial capacity. That changed on June 30th, when Vardis Space successfully completed a 27-hour experiment in orbit in its own mini-lab, growing crystals of ritonavir, a drug used to help treat HIV. So it's really for a kind of a good test drug.

Like the way I kind of explain it sometimes is we're building the world's first oven, if you will, if we're starting a bakery. And this drug is just kind of a name brand flour. We're just making flour and water this time to show that the oven works. We're not really expecting some great cake to come out. So more sophisticated drug formulations will come, but this is more for showing that the oven works. Will Brewey, a former SpaceX engineer, co-founded Varda just three years ago during the pandemic with scientist Daniel Marshall and Founders Fund partner Delian Asparoha.

This is something where we can build this company into sort of billions of dollars a year of revenue. I like to sometimes give the example of, you know, there are certain compounds where even with our, call it, you know, conservative 2%, 3% take that, you know, we could fly on the order of like 10 to 12 missions a year and, you know, do more revenue than basically all the, you know, 1200 satellites, you know, in Starlink combined. And so it's this, you know, sort of surprising world where drugs are really just the like highest margin, you know, in Starlink combined. And so it's this sort of surprising world where drugs are really just the highest margin, you know, physical product and highest revenue physical product by unit mass. This first spacecraft in Varda's Winnebago series still faces another big test, re-entry. W-Series 1 will plunge back into the atmosphere from low-Earth orbit and target a landing at the U.S. military's Utah test and training range. When, though, depends on regulators,

since Varda is the first company to seek a reentry license under new FAA regulations. On this episode, Will and Delian discuss in-space manufacturing, the microgravity drug development path paved, at least in part, by Merck's blockbuster treatment Keytruda, hypersonic missile testing, and even that LK-99 supercomputing replication that involved VARTA equipment, albeit unofficially. I'm Morgan Brennan, and this is Manifest Space. So the experiment is we flew this drug called ritonavir, which has polymorph properties that are interesting in general. And

a lot of people know the name of the drug. So it's a good first kind of demo flight. And so we put it through a thermal profile in microgravity to demonstrate the capability that we can do just that. Why this drug specifically? And what did it actually entail? Because this is what a 27 hour demo that you did or experiment that you did. So I guess just walk me through why this drug specifically and how 27 hours compares to say doing something similar on Earth. Sure. So the amount of time that we're on orbit is just due to how long we want to put the thermal profile of this drug to demonstrate the fact that we can do it because there are a lot of drugs where you can change the properties of them if it's fabricated in microgravity. So like,

for example, changing from an IV drug to a shot, that's all about formulation. So you can do that and have a unique effect in microgravity. And so the reason we picked the drug ritonavir is because some of these effects, the polymorphs of ritonavir are well known throughout the industry. So it's really for a kind of a good test drug. Like the way I kind of explain it sometimes is we're building the world's first oven, if you will, if we're starting a bakery. And this drug is just kind of a name brand flour. We're just making flour and water this time to show that the oven works.

We're not really expecting some great cake to come out. So more sophisticated drug formulations will come, but this is more for showing that the oven works. And two additional points, ritonavir, this drug that we flew, it was the first ever antiviral for HIV back in the mid nineties. But because of these types of polymorph structure issues, it was actually recalled due to basically crystallization issues causing a drop in solubility in patients' bloodstreams. And the second is this type of effect from microgravity has been well proven and studied on the International Space Station, Skylab, and the shuttle over the

past 40 years. What Varda has proven is that for the first time, a commercial entity has done this independent of the International Space Station with the capabilities of providing basically a commercial platform that has no government entity involved in it, and also our own reentry capsule, which is very off-access, let's say, relative to reentry capsule, which is very off access, let's say relative to reentry capsules like Dragon, Starliner, et cetera, that are human rated, very large vehicles. Ours is very small, very cheap, meant to reenter on a very regular basis and meant more for pharmaceuticals on board rather than humans on board. So there's the part of it, which was, let's choose this drug that, you know, a lot of people will be familiar with

why microgravity could have helped if we'd been around in the mid-90s. But also, it's a proof of the end-to-end system of, you know, for, you know, some of the top 20 biopharmacological companies that have done research already on the International Space Station, like Merck, like Mr. Miles Squibb, like Eli Lilly, showing them that they no longer need to rely just on the International Space Station alone. They can now start to, you know, find a way to off-ramp, let's say, that scientific work into a more scaled commercial setting like what BARDA is offering. I want to dig into all of that more. But first, just the fact that you have this vehicle, this capsule that's going to re-enter here. The experiment was finished, what, June 30th? And it's still orbiting in low Earth orbit.

When does it come back? So right now, probably within a few weeks to a couple of months, we're finishing up the paperwork on our FAA reentry license. We're planning the trajectories to come home and we're getting a date at the Utah test and training range, which is our landing site. So kind of putting the final pieces of the puzzle together there, but making sure that all the T's are crossed and the I's are dotted because we'll be the first reentry vehicle under the FAA's new Part 450 regulation, which is kind of the new governing body behind reentering spacecraft for commercial use cases at scale. And so we want to make sure we get everything right, that we're setting the right precedents, that the analysis are correct, that it's legally sufficient, that there's public safety. And so in order to do all that, we just need to make, you know, cross the T's, dot the I's.

And it's kind of a trailblazing process. So but, you know, no cause for like long term concern or anything like that. Just paperwork. I think in some ways, the situation that Varda is in today just highlights how advanced the ecosystem is in terms of how the FAA and other groups interact with startups. The idea that there would be a startup that is allowed to move so quickly that they could actually launch their re-entry capsule before actually having the license to re-enter, I just think highlights that there's a much tighter knit bond between some of these regulatory agencies that work in space and how they interact basically with space startups.

That's really great to hear. And it sounds like what you're telling me is that you are the first, and the first tends to take the most amount of time when you're talking about interaction with government and the bureaucratic process and the protocols that are going to be put in place, and that maybe for the future it's a situation that moves a little more quickly. Okay. So let's talk a little bit about the fact that you are the first commercial company to actually do this. How have you been able to be the first and how great is the demand already, especially now that you did complete this first experiment successfully? Yeah. So we've signed a contract already with

the Air Force Research Lab for showing the fact that we can use our capsule as a hypersonic test bed. So that's kind of the immediate near-term demand. And then we're also in talks with kind of top 20 pharma companies with how they want to take their specific molecules and then use microgravity as a formulation process. So right now we're in the process of down selecting which molecules we believe will have the effect that the customers want as a function of microgravity. And then I think a part of what has allowed us to go from basically sort of founding date to flight within two and a half years is this,

you know, sort of maniacal focus on simplicity for simplicity's sake in that, you know, I think there's a lot of companies that have ambitions for, you know, pushing the fold on what's possible, you know, in low earth orbit. And I think sometimes people's visions can get a little, you know, sort of too fanciful. And I think one thing that we've done really well here at Varda is just truly starting off with the MVP. How do you just demonstrate this end-to-end system of producing pharmaceuticals? Are we making, you know, one ton of pharmaceuticals on our first mission? You know, no. Do we have the fanciest oven, you know, in the world for the, you know, baking of the pharmaceuticals?

No. But we've been able to very simply prove out the end-to-end process and then steadily iterate from there. And I think where a lot of, you know, sort of space startups get stuck is in this world of like analysis paralysis where they're constantly redeveloping, introducing features, trying to make the whole system end-to-end more complex. One of Brewey's classic phrases that he says around the office is, at Varda, the trains take off on time. The passengers might not be all on the train, but it's taking off on time, and then the passenger can catch the next train. I think this sort of obsession with cadence and cost over complexity is what has allowed us to go from basically, again, founding date to first flight in two and a half years. And it's effectively the exact schedule that we promised to our investors, which is pretty unheard of in the aerospace industry. Yeah. And you're moving quickly.

I love a good origin story. How did this come together? So I've been thinking about this idea for almost like, you know, 10 years and then ultimately realized that a lot of the groups that had been doing some of this work on the International Space Station just didn't have quite the right DNA because they were focused more on bringing these like academic papers to market, not necessarily with scale and commercialization. And one of the biggest reasons why many of them were fearful of operating independently of the ISS, which I found to be critical to bring something like this to market. Fundamentally, if you look at this type of pharmaceutical manufacturing today, terrestrially on the ground, it doesn't have humans involved.

And so why in God's name would you basically have humans involved, especially highly paid astronauts when you're doing this in space, a much more complex environment. And so when I would dig into why people were so fearful of doing this off the, you know, ISS or, you know, independent of NASA support, two big main reasons were one, funding. And I was like, okay, as a venture capitalist, I can at least go help solve that funding problem. But then two, everybody was very fearful of this reentry problem. Basically, when you're on the ISS, you sort of get a free ride down from the government via the Crew Dragon, the Soyuz, the Starliner. And so I started to think through who in the world knows a ton about reentry and has actually built these types of commercial reentry vehicles ever before.

The only group that had ever really done that, you know, was SpaceX and the Crew and Cargo Dragon project. So thankfully, Brewey and I had a bunch of mutual friends from my, you know, old fraternity brothers at MIT, ended up getting, you know, sort of put in touch. And, you know, Brewey originally, I think, kind of, you know, laughed at me and was like, this is a crazy idea. Like reentry capsules are like $100 million plus vehicles and cost a billion dollars to develop. And then you can tell the story of how you got confident on it.

So the very first reentry vehicle that was ever built and flown was the Corona film bucket, which is a small. It's a bucket. It's a it's huggable in size. And it was launched in the design of the 50s and launched throughout the 60s as a spy satellite. And when it would orbit the Earth, it would take pictures of the Soviet Union. And then because there was no video downlink, they took pictures in the physical Kodak film and then sent that reentry capsule back down. And so if you can get away with something as cheap and stupid as that for the purposes of manufacturing and bringing those materials back. Really, the enabler wasn't my reentry engineering capability. It was just that launch costs dropped and that I am smart enough to design that thing that was built in the 60s. And it's the correct

kind of paradigm system, if you will, for this application. Yeah. If we were able to reenter Kodak film over 100 times in like the, you know, late 50s and early 60s, we felt pretty confident that now in, you know, sort of 2020s, we'd be able to reenter pharmaceuticals at least 100 times. So I think that's what, you know, in some ways, you know, gave us confidence and then, you know, raised our initial round of funding, you know, maybe, you know, four or five months after we met December 2020. Now, in terms of the vehicle itself, was it designed? So it sounds like it was designed by you guys, but I know you're also working with Rocket Lab on the hardware too. So is that a partnership? What does that look like?

Yeah, Rocket Lab's great. What they do is they build the satellite bus, which contains everything you need to be in space. If you imagine any telecom or earth observation satellite, it needs solar arrays, it needs a battery, it needs a radio. And so that satellite we purchased from Rocket Lab. And then on top of it, we add our application. So, you know, some people might add a radio for telecom or some people might add a camera for earth observation for climate change. We add the Varda manufacturing module and the reentry capsule. And so then, so, so it kind of is really helpful in the sense of you can kind of see how the space industry has started to commoditize different layers.

Like, you know, five years ago, you couldn't buy this type of satellite off the shelf at this price. And so rocket lab has enables more companies like Varda to do that. Yeah, if you were to think about the mission cost for something like Varda five years ago, it probably would have been almost like 10x larger in that we would have had to buy a fully dedicated Falcon 9 versus now we can buy slots on a ride share to sun-synchronous orbit.

We would have had to design and build a satellite bus entirely in-house, which would have added another two to three years to our schedule and basically massive costs. Instead, you can buy all these things off the shelf and then focus in on basically what our core competencies are. It's sort of the equivalent of what was happening in 2008 in the internet economy, where you had things like AWS and Azure coming online. So groups like Uber and Airbnb didn't have to focus on building their own data centers and can instead focus on scalability and their end basically consumer interfaces. It's sort of the same thing. And I think the same thing that's happening in the space economy where, you know, Varda can really just focus in on our core competencies, manufacturing of pharmaceuticals, the reentry of those pharmaceuticals on a regular basis, and then utilize these basically commoditized infrastructure layers for the rest of the application. Yeah, I haven't heard it quite

put like that, but that's, that's a really great explanation. And it probably also kind of speaks to why you've seen some of the same internet founders and, you know, kind of early pioneers also now putting so much money and dedicating so much time and attention and investment to space as well when you lay it out like that. question. This might be a silly question. I don't know. But in terms of being able to conduct the experiment itself, how does that process work? I mean, is it is it autonomous? Is it robotic? Like is it? How does that happen? Yeah, so it's starting really simple. If you imagine a bioreactor on the ground, and so what I'll step back for one sec. So what we do is we don't make the drug molecule per se. Determining which molecule goes into the human body to do what it wants. That's a pharmaceutical company now, but that's step one in drug development. The next, you know, the majority of it is formulation. So how do we get that drug into the human body in the way that we want to, right? Ideally, everything would be one pill a day. But, you know, doctors don't like shooting you with a shot in the arm. But the reason they

do that is because the molecule just isn't one that can be administered orally. And so this whole challenge of formulation is one that's solved throughout the pharmaceutical industry and with formulation companies. And each one of them had their own niche technology, okay, that allows them to create unique formulations that maybe some other folks can't. And so if you imagine us, we're a bioreactor, you know, where a formulation, where you would formulate a drug. So you have the molecule, you put it in, you put it through temperature cycling, you stir it, you mix it with different solutions and outcomes, the solution that goes in your arm or, you know, or the pill that goes in the mouth. And so what we do is you can just imagine that oven, if you will, for lack of a better term, with one extra knob. We have a knob

that's called gravity. And since gravity is a fundamental force of physics, you can get unique outcomes from our bioreactor compared to any other bioreactor on earth. And so the process is actually quite simple. If you imagine like processing the chemicals for pharmaceuticals terrestrially, traditionally, that's, it's the exact same thing. And it's actually a pretty simple machine. It's just heat it up, cool it down, mix it, and that's it. And there's tons of other processes that will go into formulating a particular drug. We only do the part where microgravity plays a role. And so instead of this long assembly line that might be in a pharmaceutical manufacturing plant, we just replace that long assembly line with one little part that's called the Varta bioreactor.

Now to the customer, it just looks like, you know, they ship it to those ingredients to us and it comes back in a different form and it continues along the manufacturing process. So quite frankly, our customers do not care that we're going to space. They're just like, hey, these guys can turn off gravity, which means they can lower convection, which means that we can create unique formulations. So we'll send it to them at step eight throughout the manufacturing process. And then we take the very simple hardware of step eight, which is essentially heaters, chillers, and mixers. And we put them into orbit and run, and run the exact same, very simple process. It's automated. It's as simple as turning on your, you know, thermostat at home and the, uh, the heat heater turns on. And then when it gets hot enough, it turns off. And that's

literally what we do in orbit. And, um, and we bring the molecule, uh, back, uh, in the, in the form that, um, that no one else can. Yeah, this is not like six degrees of freedom, like robot arms moving around doing highly complex processes. You hear manufacturing in space. It's like, yeah, we take this small little oven and then bring it back. It's like, yeah, powders and liquids and valves and heaters and things like that. I mean, but this is fascinating because you think about drug supply chain, which is certainly in much more focus in these last couple of years, given the pandemic, given the role that like a China plays in that process. And it's like,

instead of, instead of shipping around the world, you're now talking about going off the world, uh, as part of the supply chain. Yeah, that's right. So, so hold on. I, uh, I told Delia and I wouldn't off-road with this new way to explain something, but,'ll do it real quick. There's three things that you have to believe simultaneously to understand this concept of VAR. And one of them you just hit on. So I'll just go through them real quick. Gravity is a fundamental force of physics, which means that it's a unique influence on the chemical process. Two, formulation companies exist. That's actually the tougher one for aerospace, people in the aerospace industry, because, you know, before I was, you

know, running Varda, I didn't know that much about the pharmaceutical industry. It's like, hey, you know, you know about clinical trials, you know about, you know, it's roughly a 10 year process, the FDA, but you don't know about formulation and how those formulation companies fit into the value chain. So gravity is a fundamental force of physics. Formulation companies exist. And the one you just said, shipping to space is just shipping now. Rockets are reusable. And so if you think, oh, you ship drugs across the country all the time for parts of your formulation process. So it's not a huge leap to see how Varda kind of fits if you believe those three things. And a part of it is in the early days, we're definitely focused on higher end compounds, right? Think of neurological or oncological compounds, or you're talking about hundreds of thousands to a million dollars per kilogram uh revenue for the biopharma companies because these are just

compounds that require so little dosing on a per you know sort of patient basis so you're not going to see us doing like you know long release ibuprofen or like penicillin or anything like that anytime soon partially just because of the scale of those drugs the fact that uh you know you actually need a decent amount you know dosing on a per patient basis uh and you know we start with there and then as we continue to prove that the model lower our costs, launch costs continue to lower, that's what allows us to expand into like wider and wider sets of drugs. But, you know, even the oncological compounds that we're talking about, these aren't like, you know, drugs that are only accessible to like billionaires or anything like that. These are like drugs that have like

millions of patients in the US. Got it. It's interesting. I'm just thinking about, I'm thinking about that. And it's kind of, it reminds me of sort of, it's like the shipping analogy continues, right? Because it's like, you know, stuff that goes in a container ship versus stuff that's going to go in an airplane and the stuff that's going to go in an airplane, which maybe is going to cost a little bit more and it's going to get there a little bit more faster. It's going to be smaller, but higher value, right? Versus the stuff that's in a shipping container. And so this is just sort of an extension of that is what you're telling me where the drug market is concerned and how

it fits into the supply chain. Okay, how big is this market? We feel confident that there's a set of compounds that we can work on that are individually do billions of dollars a year per revenue. And the amount that we can actually capture that, again, we don't get to capture the full top line revenue. When you look at some of the formulation companies that we compare ourselves to, like Ginkgo Bioworks, Abcelera, Halozyme, all of which are publicly traded. And when you look at some of the formulation companies that we compare ourselves to, like Ginkgo Bioworks, Abcelera, Halozyme, all of which are publicly traded. When you look at basically the deal structures that they typically get, for example, Ginkgo just announced a recent deal with Merck, I think just two days ago. You're talking about basically a combination of royalties and milestones that happen upfront as they continue to work with the company. Most importantly, the royalties at the back end, once the drug is commercially available, ranging from the low end, 25 bps up to the higher end, some of these companies are getting 6%, 8%

on the particular compounds. So we feel confident that even just in small molecules, which is where we're first starting off with, let alone when we start to go into biologics, this is something where we can build this company into billions of dollars a year of revenue. I like to sometimes give the example of, there are certain compounds where even with our, call it conservative 2%, 3% take, that we could fly on the order of 10 to 12 missions a year and do more revenue than basically all of the 1,200 satellites in Starlink combined. And so it's this surprising world where drugs are really just the highest margin physical product and highest revenue physical product by unit mass.

Now, you know, it's going to take us some time to go from where we are today to closing these contracts with Top 20 Biopharma, proving out, you know, our system to the FDA, and then actually, you know, doing this type of mass manufacturing. But, you know, thankfully, the public markets have also, you know, showed that, you know, their willingness to, let's say, underwrite the future of these types of tech enabling, you know, platforms like Ginkgo Bioworks today. So that's why it makes great business sense. But what's funny is the immediate answer in my mind to the question you asked is, how many drugs can you do this to? That's actually point two of what I was saying earlier, which is gravity is a fundamental force of physics. It affects every molecule. It doesn't affect it necessarily in the way that we want

to produce value for the human body, but everyone is affected. And so it just opens up the envelope of formulation possibilities in a unique fundamental dimension that you can't access on earth. And so some of the new formulations in that opened up envelope are worthless, and some of them are extremely valuable. And the pilot program to know is Merck's Katruda, which flew on the International Space Station. And that's not like a unique drug that's mapped to gravity. Gravity is fundamental. And so when you see a different result on the one of Merck's highest revenue drug on the International Space Station because of microgravity, that's what we're selling.

Yeah, I could shoot as Merck's blockbuster monoclonal antibody oncological drug does $25 billion a year revenue for them on the International Space Station. They were able to show that they could take what was previously, you know, a one to four hour intravenous drip administration for patients to something that you could actually, you know, send patients home with a few syringes and, you know, administer themselves subcutaneously, basically just under their skin. And so there's sort of this existence proof of, you know, there's not an infinite data set on the International Space Station, but there is an N of one, which is like one of the most high value drug candidates in the entire world, having a huge effect when it was taken up to microgravity. If there's one, there's probably sort of many of those. And we've definitely heard from a variety of customers that obviously this

is much further down the line, but when Varda is mass scale, we have an industrial park in orbit, their default answer has been, yeah, I would prefer to just do all my formulation screening in orbit by default. Anything that I can do on the ground, I can definitely do in orbit, but in orbit, I just widen the aperture of everything that I can do. So I'd much prefer to screen everything up there by default and not even do anything, you know, on the ground. That'll obviously take us some time, you know, to get to, but I think it just shows the promise of, you know, sort of turning off gravity would be the default preference given that, you know, sort of gravity just introduces chaos, introduces entropy into these chemical systems. Yeah. I mean, you just mentioned it's

going to take some time to get there. So I guess what are the steps? What's the timeframe that you're working in? What's next? Yeah. So steps are, we purchased four launches and you know, four flights, hardware, building the team, showing our demonstration mission right now. They were talking about earlier just to show that we can go to space, exercise our heart, our pharmaceutical hardware in orbit and bring it back down. So that's kind of step one. We have roughly a six months cadence right now for our first four launches. And then we're just starting to think about how to ramp that up. And so on the timescales, you know, the industrial park in orbits, probably 10 years away,

you know, if we really work hard, you know, I say the near term vision for success for Varda is we're able to just launch our reentry capsule with a pharmaceutical payload on board on regular launches that occur every week now, thanks to reusable rockets. And we can go camping in Utah at our reentry landing site and see more than one shooting star per night of our capsule coming back in with grandma's medication. That's the near-term definition of success, and that's probably five to six years out. On the pharmaceutical business side of things, when you look at our first mission, it's basically just like demonstration, proof point. Can we actually take a pharmaceutical up to orbit, crystallize it, and bring it back down? The next set of proof points will effectively be, can we do a mass set of experimentation in parallel across a wide variety of

drug candidates, basically looking at, you know, which ones as Brewery said, gravity affects all of them. It may affect it in a positive way, in a negative way. And so our goal over the next sort of two,

three, four missions is tackle a multitude of ideally, you know, by mission two, we're doing two or three targets by mission four, we're doing 10 plus targets, basically a mission across a multitude of different, basically like, you know, process profiles,

basically different ways of taking them effectively through the oven. And ideally by mission four or five, having that sort of first blockbuster hit, the equivalent of, you know, sort of the Katrina example we mentioned on the International Space Station, but doing that on a VARTA platform. So that'll be like that, you know, sort of next major milestone is that, you know, initial result with the customer's molecule.

And then the, you know, next thing that you're going to see us start to do is shift away from, you know, this sort of next major milestone is that initial result with the customer's molecule. And then the next thing that you're going to see us start to do is shift away from this sort of parallel processing and looking at tons and tons of different drug candidates and said, whatever that blockbuster hit was, now actually work with the FDA on, okay, what does this look like if we need to do this on a once a quarter basis, bring back 20 to 30 kilograms, 40 kilograms of one individual basically drug candidate. So rather than basically the oven being split and building, let's say, to take this analogy further, building like, you know, a thousand different brownies, it's instead how do we build like one big chocolate cake that is like the tastiest one, basically. We're definitely focused on lots of little brownies to start,

then it's big chocolate cake, and then ideally, you know, tens of chocolate cakes, hundreds, and just scaling from there. That's the roadmap. Brownies and then cakes. Yeah, exactly. Sheetcakes. Okay, so you're raising more funding to do this? We're pretty well funded at this point, both between our seed series A, which we're in total $54 million,

and then Brewe alluded to earlier, we ended up finding out quite early on in our company's life, about six, seven months in, that our re-entry capsule, because it's so off-axis from things like Dragon and Starliner that have humans on board, we just re-enter in a very unique way where we actually go through 10 to 13 G load during re-entry. We experience much higher heat fluxes, which is

effectively think of it as like the temperature on the surface of the heat shield. And because of that, this profile much more closely mirrors what the boost glide hypersonic missiles that the Chinese have demonstrated actually go through. And so because that it acts as a very effective, you know, testing mechanism for various basically DOD components that would eventually go into those end, you know, interceptor systems as potential sort of hypersonic, you know, call it, you know, Iron Dome. So we are awarded this initial $60 million stratified program that we announced, you know, I believe in February of this year. We're also in contract now with both the Navy and NASA. We recently announced the NASA contract about three or four weeks ago. And so across all of those,

call it 40 or so million dollars of public funding in addition to our private funding to date, which allows us to basically get through our first four demonstration missions. And so not planning on going out onto the markets anytime soon. Definitely want to get through our first four demonstration missions. And so not planning on going out onto the markets anytime soon. Definitely want to get through a couple more proof points of the company across both this initial demonstration of the first mission, as well as wouldn't want to go to the market until we can show investors in the public world the first handful of drug companies that

we're working with and the particular drug candidates that we're working on. So you can sort of paint that future success of, hey, we've got these 10 drug candidates. We're not sure which one's going to be the one that's going to have the blockbuster hit, you know, in microgravity. But look, again, there's that proof point and of one of Katrina from the International Space Station, almost certainly one of these 10, you know, is going to be that hit. And so you can extrapolate from there, especially because, you know, Bruce kind of explaining before where we sit in like the, you know, drug, you know, go to market cycle. This isn't like, you know, Drew was kind of explaining before where we sit in like the, you know, drug, you know, go to market cycle. This isn't like, you know, for us,

when we start working on a drug, another seven years for it to be brought to market, we work at the roughly three or four year mark where you've already done synthesis, you already have in vivo data, you have sort of, you know, preclinical data. And now what you're looking for is that formulation that allows you to go through to clinical trials.

And so what that means is like from VAR to flight to actually being on the market, it could be, you know, sort of three or four years. And so a much tighter timeframe than some of these like, let's say, like AI drug synthesis companies that sit at the very, you know, sort of upfront. And so point being, you know, even with these first handful of deals, it's something that investors will see a relatively near term path to, you know, sort of significant royalties revenues. OK, so as we wrap this up here, I mean, I know you're focused on, you're focused on the drug market. Um, but you did just mention those hypersonic capabilities. Um, and for better or worse, the LK 99 replication stuff, I know, I know it's, you guys aren't necessarily directly involved, but it did involve,

I think one of your employees and using Varda equipment. So I just want to get your thoughts on that and sort of whether it speaks to some of these different ways, maybe even longer term of how you're, you know, applying these manufacturing and technological capabilities. So, yeah, the LK99 is not actually space related. It's the fact that we just have a, you know, related to our business. It's that we have very talented, enthusiastic engineers. And like, why would you not like if you have the capability to replicate something that came across from the other side of the world, because we have the technical like know how as well as, you know, the resources to do it, you might as well, you know,

it's cool hobby project, right? Like, why would you not do that? If you're a great engineer with a lot of enthusiasm and love being here. So, you know, it's, yeah, so I guess we aren't like the, you know, Varda isn't directly involved other than, you know, on the weekends, you know, folks come in and work on other stuff too, like, you know, work on their cars. Andrew is just kind of a brilliant guy and a resourceful one at that. And so, you know, we have some extra tools in the in the lab. And you know, some people bring in their work on their cars, you know, I work on my plane, Delian, you know, joins me in that sometimes. And, and, and Andrew decided to replicate the LK99 superconductor because he Yeah, I mean, like it's hard to describe.

But if you knew him and you were just like, oh, yeah, that's Andrew, you'd be like, yeah, of course. Why would he not do that? All right. I was going to say, on the Varda side of things, you know, as much as there's been proof points around other materials, you know, in space on the International Space Station, we're very much so going to be a pharmaceutical company for the minimum

next, you know, seven, likely, you know, 15, you know, years. Any of the work that we do, you know, around hypersonics around hypersonics or any other sort of related DOD government work, it's simply just space infrastructure that we are going to be building for our pharmaceutical business anyways, and has sort of benefit to the national security community. So I think you won't see us doing really anything other than pharmaceuticals commercially for the next 15 years, but there may be some offshoots here and there where the infrastructure that we're building is interesting to, you know, Air Force, Space Force, Navy, NASA, et cetera.

Got it. Okay. You guys are making me feel like I need to step up my hobbies here. I mean, skating superconductors and working on planes. I mean, I'm just like swimming in the pool with the kids. I don't know. That actually sounds more challenging at times.

That does it for this episode of Manifest Space. Make sure you never miss a launch by following us wherever you get your podcasts and by watching our coverage on Closing Bell Overtime. I'm Morgan Brennan.