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

In a groundbreaking move set to redefine pharmaceutical manufacturing, Varda Space, a pioneering company, has secured a substantial $187 million in its Series C funding round. This significant investment underscores a bold vision: to harness the unique environment of space, specifically its microgravity, for the production of critical pharmaceutical components that are challenging to synthesize on Earth due to the pervasive influence of gravity.

This massive new capital injection is earmarked for the construction of a state-of-the-art laboratory facility. This new lab is poised to transform Varda’s orbital manufacturing process into a powerful engine for generating valuable intellectual property, potentially revolutionizing how new drugs are developed.

The new 10,000-square-foot laboratory, located in El Segundo, California, will serve as a crucial ground-based nexus for Varda’s pharmaceutical scientists. Here, they will meticulously identify and determine which biologics, such as proteins and antibodies, are the most promising candidates for space-based crystallization. As Varda co-founder Delian Asparouhov explained, this facility will perform the essential “upfront work” to pinpoint optimal assets for orbital missions and establish the precise conditions required for their processing in space.

Asparouhov further elaborated on the lab’s capabilities, stating, “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.” This meticulous preparation ensures efficiency and success once the manufacturing modules are deployed in orbit.

Varda is actively engaging with leading pharmaceutical manufacturers who grapple with specific production hurdles, including the crystallization of particular ingredients or issues related to drug purity and shelf-life stability. The company’s innovative approach, leveraging both its new lab and orbital spacecraft, aims to provide solutions to these complex problems, concurrently generating patentable intellectual property that can be licensed to drugmakers, establishing a new revenue stream and a competitive edge.

The new funding round saw leadership from Natural Capital and Shrug Capital, with notable additional contributions from prominent investors including Peter Thiel, Lux Capital, Khosla Ventures, and Caffeinated Capital. Delian Asparouhov’s background as a partner at Founders Fund (co-founded by Thiel) and former principal at Khosla underscores the deep Silicon Valley connections backing Varda’s ambitious endeavors.

Operationally, Varda Space has already demonstrated remarkable success, having launched and successfully returned three missions since 2023. The company projects an accelerated pace, anticipating the completion of four missions this year alone. Initially, Varda integrated its in-space manufacturing modules into Rocket Lab-made spacecraft. However, in a strategic move to enhance control and efficiency, the company has since brought all spacecraft manufacturing in-house, successfully building two spacecraft this year and planning to double that cadence to four in the coming year.

Beyond pharmaceutical innovation, Varda also diversifies its revenue streams by providing its spacecraft as a hypersonic flight testbed for the U.S. Department of Defense. This offers a novel and more efficient alternative to historical hypersonic flight testing, which typically involved lengthy lead times and exorbitant costs, providing the unique advantage of recovering tested materials.