Tag Archives: science

Man has a complicated and ethically challenged relationship with animals. At the same time, they are a source of companionship, nourishment, and used for drug discovery testing. The American Veterinary Medical Association estimates that there are 89.7 million dogs and 73.8 million cats in the U.S., and that more than two-thirds of all households have at least one pet. There was a significant “Covid bounce” for new pet adoptions in 2020, as we sought out the security of man’s best friend, which tailed off in 2023.

U.S. Pet Population

Source: American Veterinary Medical Association

Here’s the other side of the coin. The US Department of Agriculture (USDA) reported that 9.8 billion land animals were slaughtered in 2020, of which nearly 9.4 billion were chickens. As shocking as that is, Faunalytics estimates that globally 85.4 billion animals were consumed in 2023. This equates to 9.4 chickens per capita annually.

Global Number of Animals Slaughtered

Source: Faunalytics

While that juxtaposition is cruelly ironic, the use of animals in the drug discovery process generates arguably more controversy and debate. In 1937 the U.S. government mandated that animals be tested for toxicity before human drug trials could commence. According to Cruelty Free International, citing USDA data, approximately 650k animals were used in clinical experiments in 2023, not counting the 125k lab animals kept in captivity for future studies. Importantly, this also does not include mice, rats, fish, or birds which are not tracked by the USDA. Industry estimates inclusive of those animals put the number at greater than 14 million in clinical studies each year.

Setting aside the legitimate ethical concerns swirling around animal testing and the significant cost considerations, as well as the fact that animal models are often poor proxies for human effectiveness, advances in AI and micro-fabrication are ushering in several novel approaches to replace animals in the drug discovery process.

There is also the practical dilemma that the supply chain for certain lab animals is severely impaired as many of the biomedical-grade research animals are imported from Asia. For instance, estimates are that approximately two-thirds of the 30k imported monkeys (mostly long-tailed macaques) come from China, which has now been dramatically curtailed causing the price to spike to more than $30k per monkey, up from $2.5k just a few years ago.

Lost among a litany of controversial changes at the FDA with the new Administration, this past April a directive was issued to phase out animal testing for monoclonal antibody research. This order also introduced the “New Approach Method,” which is to rely on “AI-based computational models of toxicity and cell lines and organoid toxicity testing in a laboratory setting.” Wrapped in the goal of more effective drugs getting to market faster was also the goal to significantly reduce development costs by limiting the reliance on animal models. In part to acknowledge the protests of PETA, Charles River Laboratories, one of the largest clinical research organizations, announced last year a $300 million initiative to secure alternatives to animal testing.

Forbes recently estimated that the U.S. pharma industry spends $300 billion annually on research and yet, nearly 90% of viable drug programs are unsuccessful. The White Coat Waste Project, which advocates for eliminating animal testing entirely, estimates that the use of animals in the drug discovery process costs the U.S. government $20 billion. Along with the drastic and haphazard DOGE cuts to medical research budgets earlier this year, tragically an untold number of lab animals were euthanized as projects were summarily halted.

On the other hand, the National Association for Biomedical Research, which advocates for the use of animal testing, claims that 60% of animals critical to research are now not accessible, dramatically impacting drug discovery.  Interestingly, researchers at the University of Pennsylvania recently discovered a compound in the DNA of long-extinct wooly mammoths (mammuthusin) which can eradicate “super bugs” which last year killed over five million people. There are fears that without new antibiotics, drug-resistant “super bugs” could kill 39 million people annually by 2050.

One of many biomedical Holy Grails has been the “lab on a chip” platform. Several recent promising initiatives have been announced, two of which are in outer space. NASA, in collaboration with Wake Forest University, is developing a “bioprinter” platform to create human tissues for rapid testing. Not to be outdone, Elon Musk’s SpaceX Falcon 9 rocket is now taking experiments to the International Space Station to grow organs from stem cells.

Of particular interest, driven by the dramatic, head-spinning advances in protein sequencing is the ability to simulate living cells in silico. Large machine learning models have advanced the molecular understanding of biological pathways to enable more precise and accurate predictive models. At a minimum, these developments hold the promise for an acceleration in screening and drug design. Estimates are that development timelines might be cut by 30% – 80%.

Timeline of Major Protein Sequencing Models

Source: Stanford RAISE Health, BOND

There were two recent venture financings, among many similar announcements, which underscore the promise of AI models in drug discovery, and potentially removing or reducing the need for extensive animal testing. Vivodyne marries its robotics human tissue manufacturing platform with an array of AI-generated clinically predictive human datasets for novel molecular insights. Tahoe Therapeutics is building foundational datasets to train its Virtual Cell Model that will map one billion single-cell datapoints with one million drug-patient interactions.

Last year $36.3 billion was invested in 1,825 ventured-backed biotech deals. Nearly lost among all this activity is a small corner of the biotech sector that is focused on animal therapeutics with only $0.2 billion invested in 39 animal biotech deals. Perhaps only coincidentally, this downward trend mirrors the pet adoption trend at the outset of the pandemic. Ironically, lab animals are presumably still used in animal biotech development processes. Along with long development timelines and a series of relatively small market opportunities due to short pet lifespans, the absolute dearth of investor liquidity in the animal health sector has kept a tight leash on investment activity.

Animal Biotech Investment Activity

Source: Pitchbook

Arguably, AI-driven therapeutic advances may occur sooner in animal health given the lack of patient privacy concerns and fewer onerous regulatory hurdles. For example, a company called Loyal has raised $135 million over several years to develop drugs to improve longevity for dogs through more precise targeting of metabolic and hormonal imbalances associated with aging. If the company is successful with canines, the longer-term plan envisions human longevity drugs, thus another possible example of drug success first in animals.

The American Pet Products Association estimates that Americans will spend $157 billion this year on their pets, of which nearly $55 billion will be spent on pet care and other related services (~1.5x more than was invested in the biotech sector). Just before the pandemic in 2019, the total spent on pets was $97 billion. This extraordinary growth contributed to both an increase in the number of veterinarians and vet practices (130.4k and 86.3k, respectively), much of which is in the Southeast and West Coast.

Notwithstanding that growth, there is still thought to be a significant shortage of providers as the industry struggles to keep pace with the number of pets. Ten years ago there were 105.4k veterinarians across 66.8k practices.

Number of Veterinarian Practices (2012-2021)

Source: U.S. Census Bureau

According to the American Association of Veterinarian Medical Colleges, there are only 33 accredited veterinarian colleges to address this shortage. The Bureau of Labor Statistics estimates that veterinarians earn $119k annually. Given that the number of years in school and levels of debt are comparable to physicians, compensation will remain a major impediment to solving this problem.

According to the U.S. Postal Service, there were more than 5,800 dog bites on mail carriers in 2023, with 727 of those encounters occurring in California alone (it is a big state though). Florida registered 193 bites and yet, according to a recent Forbes Advisor survey of 10k dog owners, Florida was declared to have the “Most Spoiled Dog Owners” as 43.5% of respondents reported pushing their dogs in strollers.

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