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we value as people, as a society?” he said. “Do we value the health and welfare of all the babies born in this country? We should, and I think we should value them equally.”
Maris said when he sees a life-saving drug or some other therapeutic that appears to cost an unreasonable amount, his next thought is to invest in innovations that would make it widely distributed and inexpensive. He contends this cycle of disruptive innovation and widespread distribution is really the key to reducing the cost of healthcare.
“There are many examples,” Maris said. “In this country today, you can buy a bottle of penicillin that is essentially free. It’s essentially free to manufacture and distribute. It costs pennies, and 60 years ago, that wasn’t the case.”
Such thinking may not sound like a typical venture investor, but Pellini said Maris was the No. 1 reason why he joined Section 32. Pellini said he was not looking for a specific opportunity when he started talking with Maris last summer about joining Section 32. After six years as CEO of Cambridge, MA-based Foundation Medicine (NASDAQ: FMI), Pellini had moved to chairman, and he said he was taking time to figure out what to do next.
“Bill and I have known one another going back to the early days of Foundation Medicine because Google Ventures was a Series A and a Series B investor,” Pellini said. While GV’s Krishna Yeshwant was on FMI’s board, he said, “Bill and I had the chance to connect a number of times over the years, and it just so happens that we both live here in Southern California.”
Pellini said he also was drawn to Section 32 because it was a place where “the team had a genuine interest and understanding” of the convergence of big data and big biology. In this respect, he talked a bit like Maris.
“This idea of bringing tech and life sciences together in what is ultimately going to be a seamless way is driven not purely by one economic interest, but is in fact driven by this notion that we can invest in platforms that improve human health in a very specific way,” Pellini said. “Every company that I’ve been part of has focused first and foremost on improving the lives of a patient population. In some companies, that population has been relatively narrow, and with some companies like Foundation Medicine [which provides genomic analysis diagnostics for solid tumors and circulating cancers], that population is very broad.”
Pellini has both a medical degree and MBA, and Maris, who has a degree in neuroscience and did research in neurobiology before he became an investor, sees their life science expertise as a crucial advantage at Section 32.
“It is not a recipe for success for traditional tech investors to pile into the life sciences,” Maris said. “When that happens, the relationships don’t exist, the background in science doesn’t exist. I’ve worked in a hospital. I’ve worked in a wet lab. I’ve done research, et cetera. I know Mike has a background in that space. In my view, you really need that background to begin to understand how the healthcare system works.”
In terms of the investment strategy at Section 32, Maris said he continues to believe that medicine is in its “transistor moment,” an industrial phase change comparable to the tech industry’s transition from vacuum tubes to transistors. He laid out this vision in a 2015 article published in Medium, including examples in eight specific areas—such as applying artificial intelligence in healthcare, reinventing antibiotics, and understanding the human microbiome.
The power of the mobile phone and high-powered, large-scale data infrastructure in healthcare is going to be very powerful, and Maris said, “I see that happening very clearly. That kind of power is really important, whether it’s in drug design or AI.
“So I think we are going to enter the age, I hope we are, of life science companies and [a] life science revolution and move out of the tech age. I think it will be very important, not just to the world, but to the sick people that you and I know, which by the way, is going to be us some day. That’s why I’m hopeful, and that’s why I’m betting my career on it.”