> Remember VC economics and the power-law distribution of returns. One big winner pays for a lot of small losing bets.
The calculus is actually quite different in biotech. With proper scientific due diligence (read: late-stage cherry-picking), there are usually more (but smaller) winners and fewer (but larger) losers in biotech than in tech. The absolute number of winners may still be smaller than the number of losers, but there isn't a tech-style power-law phenomenon. This is partly because the needs are often very well understood in the life sciences, so the size of the opportunity isn't that uncertain. It's whether or not the science will pan out that is uncertain (which can be very costly to find out and with little recourse - you can't easily pivot on a therapeutic, particularly if that happens late in clinical trials).
I don't think that is true of the last biotech boom in 80s when recombinant DNA tech was developed. Amgen, Genentech, Biogen, etc, were outsized winners. Just b/c biotech has gone to more of a 'single drug asset, build and flip to a BigPharma' model in recent years doesn't mean it is some permanent law of the industry.
The calculus is actually quite different in biotech. With proper scientific due diligence (read: late-stage cherry-picking), there are usually more (but smaller) winners and fewer (but larger) losers in biotech than in tech. The absolute number of winners may still be smaller than the number of losers, but there isn't a tech-style power-law phenomenon. This is partly because the needs are often very well understood in the life sciences, so the size of the opportunity isn't that uncertain. It's whether or not the science will pan out that is uncertain (which can be very costly to find out and with little recourse - you can't easily pivot on a therapeutic, particularly if that happens late in clinical trials).