Hello and welcome to the Scrip business development podcast. I'm Joe Hous, a senior editor at Scrip. And today we'll turn away a bit from our usual focus on biopharma dealmaking and finance for a broader view of the biotechnology sector from one very experienced and informed participant. We're joined today by Dr. Jeremy Levin, founder, chairman, and past CEO of Ovid Therapeutics. Previously, he was a practicing physician, a venture capitalist, a high-ranking executive at Genzyme, Novartis, and Bristol Myers Squibb, then the CEO of Teva Pharmaceutical Industries. He also was chairman of BIO, and in 2023 won Scrip's lifetime achievement award. On that evening, he spoke about the concept of stakeholder capitalism. And that's a theme he's focused on in his new book, Biotech and the Balance, which will be published by Rowman Books on May 19th. Thank you for joining us today, Dr. Levin.
Joe, it's a pleasure to be with you. Thank you again. It's a long time since we last spoke and it's good to do it again.
Thank you. So, having had a chance to read an advanced copy, I was struck by what I would describe as your weary optimism about biotech, including what biotech has achieved and how it is constrained from being all that it could be. So, Jeremy, I need to ask, who is your audience for this book, and what would you hope that they take away from reading it?
Joe, the book is written for really three groups. Frankly, they very rarely sit in the same room together, but they determine together whether biotech succeeds or fails. So they fall into really the following. First, policymakers, because they're increasingly treating biotech as just another sector when it's in reality, for me, and I hope for the readers of this, you'll come away with that feeling, this is a strategic infrastructure. The second group is investors, because capital allocation decisions are critical and they're reshaping what gets developed and what frankly never gets to patients. Third, it's really the leaders inside the industry, and what I mean by that is the scientists, the executives and boards, because they've not always been as clear and disciplined or unified as the moment demands. Now there's one subsidiary group, and that is the patients, and I want them to hear from those three other groups what's going on. So the takeaway is very simple. Okay, it's very straightforward. It's biotech and the science behind it is not broken. In fact, the science behind it has never been better. The system, however, that surrounds it is being unraveled. What I want them to understand is that over the last five, six decades, we've built something extraordinary. It's a system that basically takes this basic science and converts it into medicine. But at the end of the day, and it goes back years, it was never designed for scale, complexity, and the geopolitical importance it's carrying at this moment. So they need to understand that, and that system is under pressure. Policy disruption, capital distortion, complete erosion of trust, which is a real problem, and it's beginning to fail at a seam. So what I want all of these readers to take away is two things: urgency and responsibility.
This, the demise is not inevitable. It's completely fixable, but only if we recognize biotech, in my opinion, for what it is, a strategic national capability, and we act accordingly. And that's important, I said, and we act accordingly. So that means really rebuilding trust, and it's actually, it's not just something soft, it's a hard economic variable. It means restoring transparency, clarity, and stability to regulation, and it means directing capital towards real innovation, not just concentrating on risk and taking low-risk assets. So if we get this right, and that's why I'm optimistic, you know, biotech based out of America, which really is the core, the center of it in the world, we are going to define the next era of medicine. If we get it wrong, frankly, the science will continue, but the value, the companies, and ultimately the leadership is going to move elsewhere.
Thank you. So I thought the best way to start the rest of our conversation was to read an excerpt from the book that I thought crystallizes it really well. As you are a physician, the book concludes with sort of a prescription, your 10 commitments for how biotech needs to get back on track. So I'd like to read the introduction to that chapter now and then get into some questions. You wrote, 'If this book has a single message, it is that biotechnology cannot pretend to be a neutral passenger in an age of distrust. The industry sits at an intersection of biology, economics, and politics. It shapes who lives, who suffers, and who has access to knowledge and care. It depends on institutions that can be weakened or corrupted. It has benefited from decades of public investment and trust. Biotechnology is now a strategic national asset. We should treat it the way serious nations treat semiconductors, energy, and digital infrastructure, with an explicit resilience agenda, governance standards, and a clear understanding that how we manage the sector will shape our security and prosperity. Recognition alone is not enough. We need commitments. Simple statements of what we are prepared to do and not do. No company, investor or leader will implement all these perfectly. Circumstances differ. Constraints are real. But commitments set direction. They give staff, patients, and society a standard by which to judge us. They make it harder to drift.' So I'll start by asking, how have the political developments of the past couple years, including the cuts in US biomedical research funding and other Trump administration policies, affected your thinking in this book?
Quite profoundly. You know, the past few years have really altered my thinking from concern and involvement with things like BIO trying to deal with those concerns to real urgency. I used to think the biotech system was simply under day-to-day strain, that things would continue but we could actually fix them. But then several things hit me really clearly, and it started some years ago. Number one was the clear recognition that pharma and biotech are different in the sense that in the case of Martin Shkreli, you basically had the biotech industry being punished for what was effectively poor pharma behavior, and that's gone on. So now we've, then we went through COVID, that had a profound effect on trust in the public eye, vaccines, and then we saw something else. And what we saw, it's almost as if we're seeing that the industry is being deliberately weakened. You can't cut biomedical research. You can't destabilize the FDA. You can't undermine public health and still claim to be defending American innovation. Biotech's not just an industry. It's a national capability and was constructed over decades, really starting at the end of the Second World War, before we even knew about what a gene was and how to manipulate it. And but in our country, we built a system. It's how basically a country turns science into medicine, how you then prepare for that, and you prepare for diseases, you create jobs, manufacturing strength, and you create also through biotech geopolitical leverage. So for me, the political changes that we've seen, and in the United States absolutely state clearly that if the United States treats biotech like any other market sector, other countries like China will treat it like a strategic infrastructure because they've learned from us. And when I say they'll win, what I mean by that, they will win, they will determine what medicine looks like in the future, they will be generating new medicines, and it's not across the board, it doesn't mean we won't have a role in it, but it means that they will have an enormous leverage. So for me, our industry has to really think carefully as it talks to the regulators and so to the US policymakers. It's got to stop advocating only about price, tax, and regulation. They're all important, but that's more to the pharma side. What it really has to advocate for is the whole chain: NIH, universities, venture capital, FDA, innovative, not just manufacturing but innovative manufacturing. It's got to really advocate for the physicians and how they learn to use the medicines, the patients, and at the end of the day, we have to adopt those commitments that I've described because at least some of them will allow us to regain trust. Frankly, the most dangerous policy that we're seeing right now is not really one cut here, one reorganization, most favored nation, etc. It is the normalization of instability. That's the thing. It's the normalization of instability in a system that produces medicine. And that system doesn't take one or two years. It's a 10-year cycle. So it's like a ripple when you make a change in the middle of the pond. It takes years to have an effect. And that's what we're seeing. That system is rattling. So, you know, frankly, we're seeing signals of this: NIH-supported competitive projects falling sharply in 2025, and others like reduction in the NIH size. And so I can leave that aside for the moment. There's many specific examples relating to the political elements that have changed over the last year, but they have exacerbated profoundly a system that was developed over decades, and many of the problems were inherent. We just didn't start to deal with them years ago.
Yeah. I think another thing we've seen in recent years is, I believe, some brain drain due to visa policies and things of that nature. I mean, is looking at it from the point of view of the United States, are we in danger of ceding the leadership position in the life sciences, or are we past danger and already in the stages of that?
No, we have a situation where this is retrievable. However, if you focus carefully on what's happening on a geopolitical sense, you cannot avoid the discussion around what China has learned and what they plan. Our policies that have been adopted in the United States have been antithetical to creating and stimulating innovation. That means counterpoint. You look at other countries who've been studying us for decades. Not one year, not two years. They've been studying us for decades. And the lesson from them, and particularly from China, is that they plan. They decide what matters strategically, and they align capital and policy behind it, and they stay with it. So it's really 100% true to say that the United States invented modern biotech as a system from those early days of the NIH in 1947 all the way through to the amazing arrival of Genentech, the rise of the biotech companies like Regeneron. And that's just, these are extraordinary developments. But the point isn't that China studied this. They see it, not, they see biotechnology not as a collection of separate companies. And I've mentioned a few, and we have over a thousand already. They see it as a national platform. They see it in the context of a 25-year, five-step plan which leads at the end by 2035 to there having a major role in developing novel new medicines around the world. So frankly, the lesson that we look, it would behoove us to look at the lesson from China is not that America should be copying authoritarian planning. No, that's not what we want to do. It's that democracies also need a strategy. Frankly, a free market without a national strategy is not a strategy. It's a drift. And in other arenas, we have a strategy. For example, housing, our tax system is aligned completely with housing. Very interesting. There are many different levels there. Why is that, and why is that not the same in biotech? It's because we don't have a national strategy, a biobuild strategy that we could adopt. And if you want to draw a point on this, it's really interesting when we can now study China and learn from them. Their increasing focus on basic research, original innovation. Remember I said five steps. They started out with just manufacturing API. The next step was to do service organizations that knew how to test drugs. The next was to create copycats. And by the way, on a deal perspective, Joe, you should note that they were so successful, the vast majority of deals with big pharma are now happening with China. Remarkable. And you noted that. Yeah. Exactly. And so not only, so step number five was to build on that incredible strategy and to start saying now we're going to do novel targets. And when they do, and when they build frontier technologies, all of this was built on bringing back knowledge from the United States and Europe, the turtles, the very smart scientists, but it wasn't just them, they were walking into an infrastructure and a strategy. Now they have a whole new generation of scientists coming in China. All of whom are incredibly competitive inside China. Very competitive, by the way. And they want to, they are just charging ahead. In the meantime, you know, you have experts across the United States who are warning us and have repeatedly said publicly that American biotech leadership is not just being challenged by them. The erosion of the system is undermining our ability to respond to them. We can respond. We just have to have a national strategy.
Okay. So when you talked about housing, I found that to be an interesting comparison. I believe it was pretty much after World War II that the federal government decided that home ownership is a good across the board. It's good for the people. It's good for the economy. It's good for stability. And they undertook policies to incentivize home ownership. When you talk about China and biotech, their goal may have been 2035, but I'd say in 2026, they're already a long way toward accomplishing what they wanted. So, do you think the United States maybe needs to look at biotech as an overall across the board good the way generations ago it did with home ownership?
I do indeed. And the national strategy around housing allowed a multitude of different things to happen. It allowed the creation of debt. It allowed tax incentives. And if anybody were to say, well, it absorbed cash from the economy, that's just not true. It stimulated housing. It created it. And not only that, that's been one of the greatest boons for the American economy, housing. And by really saying this is a national strategy, policymakers aligned that led to industry changes that led to entire development. Now it's quite interesting to note that our president is actually a real estate developer. And how remarkable is that, that this should be instinctive. This should be clear. A simple set of levers created to give tax incentives, to give stimulation to innovation. I'm not talking about selling drugs and giving people tax breaks on drugs they're selling. I'm talking about building the tax incentives that you could construct that would allow a long-term process. Housing's long term. You don't build something and then expect to knock it down the next day. You build it and it hangs around for the next 50 years with a bit of luck. Here you have a situation where you build a drug. You've got a patent stage. During that period of time, you want people to feel that they want the best drug, the best kind of manufacturing. So you incent them over that 10-year period that it takes to get a drug to market to do that. That's across the board. It's not just the builder. It's not, and that's the scientist. It's not just the architect. It's not just the developer. That's the builder. It's not just the regulator. Those are the people who are in the towns who are taking taxes from the building. And it's not just the buyer, and that's the patient. All of these were seen as aligned as a strategy. And there are enormous similarities in many different parts that simply require rule changes in the taxation that could stimulate us. No cash out of the pocket of the government. That's not necessary. Biotech can support itself, but it has to be biotech. It doesn't have to be pharma. It needs to be biotech. Home ownership policy is not about houses. You need to think about it in the same way, that it's capital formation, stability, and access for the American public to a foundational asset. In biotech, it's not about drugs. It's really about capital formation, scientific translation, and access to life-threatening therapies. In both systems, in both cases, the system only works if they're all aligned and over long time horizons. So it's an incredibly incredible parallels. I can go into it. You know, here's a question. Mortgage policy is actually capital formation. In biotech, you've got government-backed mortgages. You've got that lowered risk and expanded access to long-duration capital. You want to ensure that, and here's an important point, Joe. In biotech, you need long-term capital. Long-term. And I'm not talking about the guys who flip every day in the marketplace. I'm talking about the guys who get in there and wait. And wait because they know the failure rate is high. Bottom line is biotech needs the same thing. Predictable patient capital that matches scientific timelines. We can talk about interest rates, the cost of innovation. Biotech money is incredibly expensive. By the way, pharmaceutical money is incredibly cheap. They like banks generating cash and they just distribute it. But biotech, it's different. Capital formation's incredibly important. In biotech, the cost of capital, you know, is really the equivalent of interest rates in building. You know, when interest rates rise sharply, home ownership falls, demand drops, development slows. In biotech, the cost of capital and risk tolerance are equivalent. Tight capital markets don't just slow the companies, they kill the entire categories of science before they even start. And this is really important. I just repeat because I think we're going to, I hope we're going to talk about where people are putting their money. Right.
