Varda Space’s orbital drug factory success fuels $90M in new funding

Varda Space Industries has closed a massive round of funding just weeks after returning its first drug-making capsule.

The company’s $90 million Series B round marks an inflection point for the company, which is now preparing to move from the initial demonstration mission to a regular set of missions carrying customer payloads, said Varda founder Delian Asparouhov tells TechCrunch.

Varda, based in El Segundo, was founded in 2021 by Asparouhov, who is also a partner at Founders Fund, and Will Bruey, a spacecraft engineer who cut his teeth at SpaceX. The two men had an audacious goal: to commercialize what until recently showed promise, but ultimately on a small scale, about the effects of microgravity on pharmaceutical crystals.

Indeed, Varda’s first mission, who returned to Earth in February after 10 months in orbit, this is not the first time that a drug has crystallized in microgravity. Astronauts have been conducting protein crystallization experiments in space for decades on the International Space Station and before that, on the Space Shuttle.

But the business case for expanding this research has never materialized – until now. There are a few reasons for this, Asparhouv explained: Due to the crew, there are significant limitations on the types of solvents or other materials you can take aboard the ISS; there are constraints linked to intellectual property for the work carried out on the station; and pharmaceutical laboratory equipment designed for use in space generally lacked sophistication compared to terrestrial versions.

But a lot has changed, especially in the space industry. Part of the reason Varda is possible today is due to the availability of regular, low-cost rideshare launches from SpaceX and Rocket Lab’s innovations in satellite bus manufacturing. Beyond these external partnerships, the startup has made significant progress, as shown by the success of the first mission: its re-entry capsule seems to have worked without problems and the experiment to reformulate the antiviral Ritonavir took place. without issue.

Varda has also begun publishing the results of its internal R&D efforts, including a scientific article on its hypergravity (as opposed to microgravity) crystallization platform, which the startup developed as a sort of screening method before sending drugs into space. This is a whole new area of ​​research that takes advantage of the ability to truly unlock gravity as a variable in scientific experiments.

“Over time, we will be able to generate datasets between hypergravity and microgravity and start to show correlations,” he said. “As Varda flies more and more, we are confident that we will begin to be able to develop systems of thought in which, for models of particular types of chemical systems, hypergravity will be used as a means of determining correlation between, ultimately, microgravity and the performance of drugs.

There is still a lot of work to do. While engineers will study this first spacecraft, called Winnebago, to understand wear and tear on the vehicle, the company as a whole will focus more on throughput before reuse, he said.

“If we’re just amortizing the total cost of doing business, we have a lot more to gain by initially increasing the flight rate before we really start doing it for reusability. In some ways, it’s like we have to hit a monthly cadence before user reusability really becomes the biggest lever for us.

Varda does aim to significantly reduce mission costs by refurbishing and reusing Winnebago capsules, as SpaceX is doing with its Dragon capsule, but Asparhouv said that won’t happen until later in the decade, around 2027. (In a recent podcast appearancehe clarified that the initial all-inclusive mission cost about $12 million, which will drop to $5 to $6 million for Mission 4 and $2.5 million or less for Mission 10.) Larger capsules are also in preparation for the longer term, but not either. until maturity 2027.

Asparhouv also confirmed that pharmaceuticals will be Varda’s sole focus over the next 10 to 20 years (or more), based on the company’s belief that pharmaceuticals will generate more economic value compared to other materials. This is largely because there is a large set of drugs that only require a “seed” of the material that can only be made in microgravity, and the rest of the drug formulation can be completed here on earth. This means that the product generates high revenue but low mass.

The company also aims to improve the processing capabilities of the onboard pharmaceutical reactor. The first mission carried only a single protein drug, but in the future the company hopes to process multiple drug products that could be subjected to different treatment regimes. In the future, other missions could carry larger reactors for drugs that require more than the “seed” crystal, and these mission profiles would be closer to something like mass manufacturing.

Varda has “a handful” of contracts signed with publicly traded biotech companies, and the next three missions have already come to fruition with Rocket Lab, which provided the space bus for the first mission. The startup’s next manufacturing mission will launch later this year, and the team plans to land this spacecraft in Australia.

The new funding was led by Caffeinated Capital, with participation from Lux Capital, General Catalyst, Founders Fund and Khosla Ventures. Varda has now raised $145 million to date.