What drives Peter Thiel's biotech investment strategy? Trends are 'bad'

Print 20 March 2015
John Carroll / FierceBiotech

Investment guru and self-described contrarian Peter Thiel is best known for making a bundle from PayPal and Facebook. But along the way he's made a few small bets on biotech, and MIT'sTechnology Review caught up with him recently to find out more about what is driving his interest in the field, and what he looks for when he invests in a biotech.

First, moon-shot program development qualifies as a bad idea.

"Most companies are very heavily invested in the unpredictably paradigm," he tells the magazine. "But when you treat it as a lottery ticket, both the participants and the investors have already psyched themselves into losing. A small probability times a big payoff normally equals zero."

But the author of Zero to One (the title relates to making vertical vs. horizontal progress) is also not too fond of the me-too strategy, where everybody is piling into the same field.

"I would say everything that fits a trend is bad, just always bad," he says.

Thiel keeps the biotech fires burning on two fronts, through his charitable Thiel Foundation--which created Breakout Labs--as well as his venture arm, Founders Fund, which has invested in Cambrian, Emerald Therapeutics, and the antibody play Stem CentRx. One of his investments, a company called Halcyon Molecular that set out to device a cheap approach to sequencing, failed.

The foundation has been backing projects involved in translational research, taking academic projects and pushing a product to the market. And the venture investor only wants companies that are directed by the founders.

There's something else that drives Thiel's interest. He talks to Technology Review about his interest in anti-aging programs, something that spurred him to take growth hormones and sign up for cryonic freezing.

"The way people deal with aging is a combination of acceptance and denial," he says. "They accept there is nothing they can do about it, and deny it's going to happen to them.

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