Private sector abandonment

Sources show that under the current development model, psychiatric medicines are highly prone to failure. Such datapoints have caused widespread divestment.

The largest and most equipped pharmaceutical companies have widely divested from drug development in psychiatry-oriented markets, with some even shutting down psychiatric R&D operations altogether. This industry-wide shift away from psychiatry has created a crisis in available funding for psychiatry-oriented R&D efforts, especially for early-stage candidates.

Preclinical and early-stage clinical drug development in other parts of the pharmaceutical industry such as oncology, immunology, and weight loss are often incentivized by lower market remissions and higher success rates. In contrast, psychiatric drug development is characterized by translational difficulties (high failure rates), and complex regulatory hurdles (namely surrounding proving efficacy, patient stratification in clinical trials, and high market remissions). This combination of factors has turned many companies away from pursuing this area.

Broadly speaking, with regards to early-stage biopharmaceutical efforts, there are a couple of main ways companies decide to structure themselves. Either a research scientist coordinates a spin-out using a technology they’ve been working on, or an entrepreneur licenses a technology and then attempts to raise money. Although there have been outliers to this pattern, such as in the case of Roivant Sciences, PureTech Health, Bridge Bio (as well as a few others), this is generally how things work in the industry.

We believe that the primary issue with these organizational structures – and why an estimated 90% of them result in failure – is due to the core layer (private entity or academic institutions) being a walled garden enforcing stringent policy, information silos, bureaucracy, and, in turn, discouraging open collaboration and information exchange. In other words, most biopharma companies lack an iterative process.

In the realm of technology, this problem remains bound to biopharma, whereas other industries (namely information technology), have been able to adapt open-source concepts quite well. In fact, it could be argued that the most important technologies of our time, ones that have led to the creation of billions of dollars in GDP and bolstered economic growth, were open source. Wordpress, React JS, the Apache Web Server, and the Linux operating system are just a few examples. As these technologies are widely utilized by the world's leading companies to this day, we view the relationship between commercially-oriented projects and the utilization of open source as inanimate and paramount to success.