With Varda Space, leading Silicon Valley players make big bet on making drugs in space

Pharmaceutical scientists come up against a hard limitations here on Earth: gravity. Varda Space wants to change that.

The company has raised a massive new round to turn space into the “ultimate high ground” for the production of critical pharmaceutical components that can be brought back to Earth and used to make finished drugs. 

The company’s $187 million Series C funding round announced Thursday will be used to build out a new laboratory facility that could transform Varda’s orbital manufacturing process into a lucrative intellectual property-generating machine. 

The 10,000-square-foot-lab space in El Segundo, California will enable Varda pharmaceutical scientists to determine which biologics, like proteins and antibodies, are the most promising candidates for space-based crystallization. They will essentially perform “the upfront work” to determine which assets are good candidates for an orbital mission, and what conditions to put them through in space, Varda co-founder Delian Asparouhov explained in an interview with TechCrunch. 

“The company can go and do process engineering to understand at what temperatures and what conditions do the biologics crystallize ahead of time, so that when we get up in orbit the bioreactor knows what to do,” Asparouhov said.

Varda is in conversation with leading pharmaceutical manufacturers that are struggling with particular problems, like crystallizing a particular ingredient, or issues with drug purity or shelf-life stability. The company’s aim is to use its lab and orbital spacecraft to solve those problems, and in the process generate IP that can be patented and licensed to drugmakers. 

The lab will provide opportunity for the company to generate intellectual property that could prove valuable further down in the drug production life-cycle. Asparouhov said he expects to see a much greater volume of Varda patents filed as the lab comes online.

The new funding was led by firms Natural Capital and Shrug Capital, with additional contribution from Peter Thiel, Lux Capital, Khosla Ventures and Caffeinated Capital. Asparouhov is a partner at Founders Fund, the firm Thiel co-founded twenty years ago, and he as previously a principal at Khosla. 

Varda has launched and returned three successful missions so far since 2023; the company anticipates completing four missions this year alone.

For its first three missions, Varda housed its in-space manufacturing module inside a Rocket Lab-made spacecraft. The company has since taken all of the spacecraft manufacturing in-house. Varda built two spacecraft this year and aims to double that manufacturing cadence to four next year.

The company also generates revenue by turning its spacecraft into a hypersonic flight testbed for the U.S. Department of Defense. Historically, hypersonic flight testing had a long lead time and sky-high prices, but Varda is proposing a launch-and-return cadence and the novel opportunity to recover tested material.