Vibe Bio is using a DAO to bring patients, scientists, and investors together to find cures for rare diseases that the biotech industry considers too small to properly address.
I invited its founder, Alok Tayi to talk about the painful circumstance that led him to create it, how it works, and why this model could work for other industries.
Here are a few edited excerpts from this interview.
Andrew: What happened to your daughter that set you on this path? (Timestamp 2:02)
Alok: You need some context first. I’m a scientist by trade and training. I spent 15 years at the bench and ended up starting a few software companies focused on the biotech industry. So I spent a fair amount of time looking at the inner workings of life sciences, as a practitioner and solution developer.
Then, last year, my wife and I had our first child. Unfortunately, the baby was very sick and spent a long time in the hospital. One of the hardest parts was that her disease was somewhat common. The biology was understood, but there were no dedicated therapeutic options, so she suffered a long time.
That led me to start Vibe Bio.
What did you think was missing from the biotech industry? (3:17)
The biotech industry found many exciting medicines, but because of their incentives, they focus on the largest set of diseases and deprioritize rare diseases. 1 in 10 Americans suffers from a rare disease.
I spent a lot of time in the newborn intensive care unit with other families who had sick children. As I studied the industry, I realized there wasn’t an issue of finding a potential cure, but of funding it.
Why did you set up a DAO? (3:17)
It allows us to build a community of patients, scientists and partners to help identify and vet treatments. Then fund them using a cryptocurrency token.
Crypto has an over trillion dollar market cap. In comparison, biotech venture capital today only invests about $5 - $10 billion a year in all early-stage disease research.
A DAO allows us to bring in new sources of capital, namely crypto. That allows us to be financially patient, instead of expecting fast results. It also allows us to grow a scalable community of stakeholders.
How much money have you raised? (5:43)
$12 million in a round of funding that included Initialized Capital, 6th Man Ventures, Balaji Srinivasan, Naval Ravikant, and a myriad of others in the crypto and biotech space.
We’ll leverage that capital to build our community, invest in some of our initial drug programs and hopefully show that patients can truly be at the center of drug development.
How does the DAO identify and help scientists? (6:30)
Many patient communities are already investing in drug development programs at academic institutions, biotech companies or organizations they own.
These communities often have enough resources to show that candidate medicines work in a petri dish, but they need a different set of expertise and more capital to show efficacy in humans.
In our DAO, communities can propose medicines that need our support. Token holders vote on what to fund. Then the DAO uses its treasury to invest in programs and get them to clinical trials, manufacturing, etc. In addition to capital, members of the DAO bring their expertise to help programs.
We can then create C Corporations to hold the intellectual property related to the medicines we help bring to market. That allows the DAO to have capital flow back to its treasury, which will allow us to fund more programs.
The scientists working on the medications also get a share of the corporation you create, right? (10:00)
Alok: Exactly right.
I think one of the difficulties in traditional biotech venture at the moment is that employees don't really have a lot of skin in the game or upside if a company is successful.
When you say “Vibe is a community of patients, scientists and partners,” the investors are who you refer to as partners, right? And they get governance tokens for their investments? (12:00)
Do scientists and patients also get governance tokens? (13:54)
We are granting tokens to patient charities and patient communities, focused on different diseases. That will allow them to participate in and put forth proposals.
Scientists are also given tokens, especially those who are participating in the diligence and vetting process, in return for their time. They’re incentivized to see those projects succeed.
Individual corporations you set up could earn profits. Some of those profits would flow to the DAO. Would the DAO make the equivalent of dividend payments to its token holders? (15:59)
We don’t have that as a facet of how our organization operates. We filed a 501c application to be a formal charity here in the United States.
For various reasons, we are unable to flow back profits to token holders.
(Andrew’s note: See our article on why DAOs might not want to distribute profits to token holders.)
Beyond voting on what to support, what’s the value of the token? (14:58)
It could also be used as a medium of exchange.
So it could be its own currency and scientists could use it to pay for work done by other scientists? (15:06)
Many people I talk with are skeptical that communities can outperform a few smart, focused people. (21:32)
Thankfully, in the biotech world, we’ve seen that community approach is proven.
Some of the most canonical medicines we think about – whether it's the vaccine for polio, treatments for cystic fibrosis, or forms of hyper tensions – were actually not founded or pursued by biotech, VC, the pharmaceutical industry, or NIH.
Instead, they were pursued, funded, and developed by communities of patients coming together as a form of a charity, raising money philanthropically, and investing in those medicines.
The book, Breath from Sault goes through this history and has stories of patients coming together to drive awareness and develop drugs.
How did you get your DAO’s first members? (25:45)
Our first community was the people my wife and I met at the hospital when our daughter was sick. Then there were support groups and friends. Having been both a scientists and a father of a sick child, I connected with others who had similar challenges and aspirations. That’s where our community started.
It started with text messages, and email threads. Today it’s on Discord.
What did you do to help the community work well together? (28:30)
That ethos has already been part of how rare disease patients operate.
You and I had the fortune of spending time with really successful and capable individuals across many walks of life. But I can truly say without equivocation that the most powerful, ambitious, and humble people I've ever met have been rare disease parents.
It’s because of the circumstance they found themselves in. The traditional industry says, “We're not interested” and ignores them and their diseases.
They have had to form their own communities, and their own support networks. They've had to go find the researchers to collaborate with, to better understand the genetic mutation or the potential for a given drug. They've had to go and find the right doctors who can diagnose a disease properly.
Our role has simply been to provide these existing communities and individuals with the right set of tools, resources, and power to pursue cures.
That’s what the Vibe Bio DAO is here to do.
Can you think of other industries that your approach can help? (36:54)
The concept I call an “industry DAO” can work where there’s a community of users, customers, service providers and partners who have a common mission and unmet needs that legacy institutions ignore.
That can apply to nutrition, agriculture, climate change, space exploration and a myriad of other areas.
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