Noted NIAID bull, Anthony Fauci

NIAID Rising

Without NIH, we likely would not yet have COVID-19 vaccines. We might not have the sequencers used to identify the disease in the first place. We wouldn’t have virtually any of the consequential therapies or diagnostics from the last thirty years.

The National Institutes of Health is where Biotech goes to dream. If Biotech wants to dream bigger, a good place to start is the NIH budget.

Two things to know here. First, we should be spending a lot more on NIH. Second, COVID has made it all-but certain that infectious disease will displace cancer as the best-funded area of life science research.

Let’s start with how much we spend. NIH’s 2020 budget was $41 billion. We could double it overnight and not waste a dime.

That sounds absurd, but it’s essentially correct. More than 80% of NIH’s budget is extramural research. These proposals go through NIH’s scientific peer review process, where they are scored, then funded (more or less) by whether the scores meet the paylines. What meets the paylines? NIH has a handy data book that tells the story. Back in the ’90s, the top 30–40% of proposals were funded. By 2006, after a handful of stagnant budgets, success rates were down to about 20%, where they have stayed ever since.

Wasteful frugality

If you haven’t sat on an NIH review panel, a 20% award rate might sound reasonable. Surely we want to fund only the great projects, and the top quintile sounds reasonably selective. Right? I mean, only about 5% of people get into Harvard.

It is not reasonable. The top fifth of NIH proposals are basically perfect specimens of experimental design. You need a room full of highly trained scientists to find even the smallest objections to the proposed work. If you’ve never seen one of these high-scoring proposals, I’m here to tell you that they are awe inspiring. They’re also a colossal waste of time and money.

It is rare for a proposal to get funded on the first submission. These pristine documents are instead sintered by repeated peer review, through multiple applications cycles, until all the sloppy ideas and slips of the keyboard are baked away. Based on the time between submission cycles, getting a proposal funded can take years.

Somewhere between the half-cocked first draft and the final masterpiece, a proposal becomes a good proposal. You don’t want to fund proposals before they’re good, but you also don’t want to wait until they’re perfect.

I don’t know exactly where that line is, but the 20th percentile is way past it. In my experience, proposals in the 3rd decile are basically great. Proposals in the 4th have some holes, but they’re typically the kind that can be fixed with some thoughtful editing. For these slightly flawed proposals, the best use of everyone’s time would be to give the applicants critical feedback and give them the money, rather than force a six-month delay while the proposal is re-written and re-reviewed.

Then there’s proposal size. NIH’s canonical research grant is the R01, which is nominally $2 million over five years. That’s real money for a single investigator. You can carry yourself, a couple of students, maybe a postdoc, and still have money left over for supplies and equipment. But as paylines have tightened, the competition for R01s has grown so fierce that investigators avoid them. Instead, they apply for smaller grants like the R21, which are less than $270,000, and last only a year or two. These small grants introduce profound instability in research labs, because two years is too short to support a student for their full tenure of PhD study.

If the paylines relaxed, we’d have fewer proposals for larger projects and less wasteful repetition of the review process. Labs would have more — and more stable — funding, so scientists could spend more time publishing papers and less time perfecting grant applications. We’d get more science per dollar. More importantly, we would have more, better, and riskier science.

Cancer research gets company

NIH’s budget has never been equitably distributed across institutes or diseases. Cancer has always been the best-funded of the Institutes, so scientists funneled their proposals through NCI. Want to study cell metabolism? Compare healthy tissues with tumors. Want to study growth and development? Track development markers in childhood leukemia. Want to study systems biology? Develop models of tumor cell signaling.

All this cancer research sowed the seeds for today’s biotech industry. For all the stories we like to tell our children about how science is a train of useful mistakes and happy surprises, the fact is we learn the most about the subjects we spend the most time studying. We spent money on cancer research, so we learned about cancer. Our research tools, diagnostics, and drugs were developed with cancer in mind. You’d be forgiven for thinking that biotech is cancer tech.

Back in 2000, Allergy and Infectious Disease was in third place. By the mid-aughts, NIAID had overtaken Heart, Lung and Blood for second. In 2015, following the Ebola outbreak in West Africa, the NIAID budget took a hard upward turn. It has nearly closed the gap with NCI.

NIAID has overtaken NHLBI to be in second place. Post-COVID, Cancer’s long run in first place is certainly nearing its end. Source.

Now COVID-19 has, shall we say, reinforced the bull case for NIAID.

When NIAID inevitably overtakes NCI as the best-funded NIH Institute, it will mark a generational change in the life sciences. Want to study cell metabolism? Compare healthy and infected tissue. Want to study growth and development? Track markers in populations with Zika. Want to study systems biology? Develop models immune response.

Back when it became clear that mobile phones had overtaken desktops as the economic heart of the computer business, Benedict Evans declared that the smartphone was was the “new Sun:”

With billions of people buying a device every two years, on average, the phone business dwarfs the PC business …That in turn means that the smartphone supply chain is replacing the PC supply chain as a key driver of the tech industry. … All of this also means that the companies and places that set the agenda in tech have changed. …

The best way to think of this is as a solar system — the smartphone is the Sun and everything else orbits around it … the smartphone industry supplies the components and manufacturers, and the smartphone itself is mostly how you control and interact.

In other words, smartphones were built with computer components. Then smartphones unit sales became 100x larger than computers, and computers were suddenly being made with smartphone components.

For decades, infectious disease has made do with cancer’s leavings. That seems likely to change. If sequencing is a house that cancer genotyping built, then COVID variant tracking is about to buy up all the lots in the neighborhood and build a hi-rise. If cell therapy was a starving artist bankrolled by its rich uncle Oncology, then it’s about to get an antiviral record deal (band name: Cytokine Storm). It’s only a matter of time before the tools, diagnostics, and drugs built for infectious disease are flowing back into cancer.

To be clear: NCI isn’t going anywhere. Cancer will remain the second-best funded disease by a wide margin, and the full might of commercial biotech remains heavily invested in its treatment and cure. But change is coming.

This is good news. In the global view of disease, cancer is an affliction of the old and rich — that is to say, of the few. Infectious disease comes for us all. It’s past time that we invest more aggressively in life science research, and when we do, we should go long on NIAID.

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