Jul 15, 2021 · 1h 12m · capital-allocators
Eli Casdin – Casdin Capital (Manager Meetings, EP.02)
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of Manager Meetings, former W.K. Kellogg Foundation CIO Joel Wittenberg interviews Eli Casdin, founder of Casdin Capital, to explore the evolution of molecular medicine and modern life sciences investing. Casdin discusses his firm's underwriting framework, crossover capital deployment, perspective on AI in drug discovery, and the transformation of biotechnology into an engineered discipline.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Ted holds 9% of the talking time here. How this is scored →
Ted as informed peer 2.7 Guest teaching 5.8 Guest disagreement 0.5 Ted pushing back 0.0
speaking balance: gold is Ted, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 38:12 Pushing back against post-2008 prime broker orthodoxy
Casdin forcefully recounts rejecting his prime broker's firm insistence that combining private illiquid assets with public investing was unacceptable after the 2008 financial crisis.
Hardest push from Ted ▶ 38:08 Allocator comparison on miss ratesJoel Wittenberg playfully checks Casdin's claim of having only one bad miss by contrasting it with allocator reality and probing into true portfolio failure rates.
Biggest teaching moment ▶ 17:20 Genomic timeline contrast: SARS 2003 vs COVID-19Casdin educates the listener on the exponential speedup of molecular biology, illustrating how SARS sequencing took seven months while COVID mRNA design took only 48 hours.
Ted holds their own ▶ 46:25 Allocator demonstrating computational literacy on life sciences dataJoel Wittenberg highlights his own research into Casdin's writings, specifically referencing 24-zero yottabytes and setting up an advanced discussion on computational machine learning.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Ted as informed peer | Guest teaching | Guest disagreement | Ted pushing back | Why |
|---|---|---|---|---|---|---|
| Manager Meetings Show Overview and Legal Disclaimer | 4 | 0 | 0 | 0 | Ted Seides introduces the episode format and conducts a pre-interview debrief with allocator Joel Wittenberg. Wittenberg articulates Kellogg Foundation's allocation criteria and manager selection logic for biotech lockup funds. | |
| Eli Casdin's Background and Casdin Capital's Founding | 2 | 5 | 0 | 0 | Wittenberg prompts Casdin to share his background. Casdin gives an extensive narrative covering his family lineage in brokerage, his father's pioneering biotech fund Cooper Hill, his tenure at AllianceBernstein, and the creation of Casdin Capital. | |
| The Dawn of Molecular Medicine and Biotechnology Evolution | 3 | 8 | 1 | 0 | Wittenberg references Casdin's seminal 108-page paper 'The Dawn of Molecular Medicine'. Casdin delivers a masterclass on the collapsing genomic cost curve, precision medicine trials, and why therapeutic adoption preceded diagnostic reimbursement. | |
| Biotech Disruption and the Transformation of Big Pharma | 3 | 7 | 1 | 0 | Wittenberg asks how big pharma's extended clinical trial model competes with modern biotech. Casdin explains the shift from broad statistical trials to targeted biomarker-driven studies, noting big pharma's pivot toward biopharma partnerships. | |
| Evaluating Management Teams and Combating Biotech FOMO | 2 | 6 | 1 | 0 | Wittenberg asks about evaluating the human factor in science businesses. Casdin details assessing C-suite talent across functional silos using a football analogy, combating FOMO, and maintaining discipline when evaluating management. | |
| Network Calibration, Reciprocal Dialogue, and Capital Duration | 2 | 6 | 0 | 0 | Casdin explains building multi-decade network relationships based on reciprocal dialogue rather than extractive brain-picking, tying this directly to LP capital duration advantages. | |
| Sponsor Ad: Ridgeline Investment Management Technology | 3 | 6 | 1 | 0 | Following a sponsor break, Wittenberg and Casdin discuss private investing strategy. Casdin recalls rejecting early prime broker advice against illiquid assets, explaining his 'front lawn' rather than 'garage' stage entry framework. | |
| Financing Toolkit: Public Markets, Privates, and SPACs | 2 | 6 | 0 | 0 | Wittenberg asks about Casdin's financing tools across private, public, and SPAC structures. Casdin explains how SPACs function as bespoke private equity instruments for complex mergers and long-horizon life sciences growth stories. | |
| Artificial Intelligence and Machine Learning in Life Sciences | 3 | 7 | 1 | 0 | Wittenberg brings up yottabytes of data and machine learning in life sciences. Casdin demystifies AI, emphasizing that computational power without expert biological direction and commercial business models fails to generate valuable drugs. | |
| Firm Architecture, Quantitative Frameworks, and Decision Making | 3 | 7 | 0 | 0 | Wittenberg inquires about internal decision-making across Casdin's 40-person team. Casdin shares details on his quantitative factor scoring, eliminating ego clashes from traditional analyst-PM hierarchies, and discovering negative return correlation in catalyst strength. | |
| Ten-Year Outlook and Maturation of Life Sciences Investing | 3 | 6 | 0 | 0 | Casdin forecasts life sciences asset allocations growing dramatically across institutional portfolios over the next decade as molecular engineering turns speculative lottery tickets into predictable compounding businesses. |
Statements from this episode (21)
Casdin: Casdin Capital manages $3.5B across public and private markets
“Today we manage three and a half billion or so in capital across public and privates. We've invested in over a hundred private companies.”
Casdin: Picks and shovels offer steady returns, but applications yield big impact
“The picks and shovels generate the steady sort of tractable returns, but the big impacts come from the applications of technology.”
Casdin: Human genome sequencing cost dropped from $3B in 2003 to $500
“The human genome was finished in oh three, cost the government about three billion dollars, and took about 13 years to do.
If you had started in that day, it would have taken you three, four, five years, and cost you 300 plus million.
It was done in a room f…”
Casdin: In major technology waves, ideas aren't wrong, just mistimed
“One of the big insights that I've had over the years is there is, for big technology waves, there's no wrong idea.
There's just timing.”
Casdin: Moderna created the COVID-19 mRNA prototype in two days
“In 2003, when the SARS outbreak broke, took us seven months to read the genome of the SARS.
And you have to read the genome to create an effective vaccine.
When COVID broke, it took us two days.
That information was digitally sent to Moderna, and it took th…”
Casdin: Cell therapy will touch almost every family within a decade
“In a decade you will be much closer to all of us experiencing, whether personally or through our extended families, someone that's undergone cell therapy, whether it's to fight cancer or to replace some organ under dysfunction.”
Casdin: 70% of innovative drugs originate from small biotech startups
“Today about 70% of innovative drugs are coming out of small biotechs. They're still largely being commercialized by pharma through either acquisition or through a partnership”
Casdin: Big pharma spent 20 years jettisoning internal R&D
“And so I think pharma in the last 20 years had jettisoned their R&D efforts to focus on distribution of brand.”
Casdin: Biotechs no longer need big pharma to commercialize drugs
“Investors like me are saying, don't sell yourself. Don't partner. You don't need them. I'll give you the money. Go at it alone. Build out commercial. Become your own standalone company, and many, many more are going that path, and I think that they don't need …”
Casdin: Public-Only Investors Miss Half of Sector Innovation
“If you're only investing in public companies and not talking to private companies, you're only hearing half the story. If you're talking to them, but not investing in them, they're only telling you half the story. And on occasion, the tip of the spear innovati…”
Casdin: Scaling check sizes over time de-risks capital-intensive life sciences investing
“What typical venture investors try to get as much money in, in their first slug, and then they fight dilution on the way down. What we're doing is scaling up over time because these companies are burning a hundred to a hundred and fifty million dollars every 1…”
Casdin: Biotech companies go public faster than tech due to capital needs
“There is a IPO, time to public market, that has been far shorter than what the tech industry has experienced, Because unlike the tech industry, these companies' product development cycles are seven to 10 years, and they need capital, and so the public markets …”
Casdin: 90% of life science stock volatility is macro-driven
“When volatility hits in the public markets, I would say in my experience over the last decade in this fund, nine out of 10 times, it has been because of something unrelated to our industry.”
Casdin Capital invested in Paige AI to digitize eight million cancer slides
“We're invested in a company called Page AI that is digitizing all eight million pathology slides, little bits of tissue out of cancer patients.”
Casdin: Investment firms often fail on business operations, not investing
“Often they fail not on the investment side, but they fail on the business side. There is the business of investing, and then there's investing.”
Casdin: High event catalysts are negatively correlated with investment returns
“What we learned was that high catalysts were negatively correlated with return. And low catalyst actually was positive quarterly.”
Casdin: Drug development success rates will rise and costs will fall
“Our industry over the next 10 years, and I can say that comfortably, drugs are going to be higher chance of approval, higher chance of efficacy. Probability of success is going to go up continually, and cost of that success is going to come down.”
Casdin: All institutional allocators will have 5-10% life sciences exposure by 2031
“If I go to that conference in 10 years, everyone's gonna have exposure, and it's gonna be five to 10%.”
Casdin: Casdin Capital's therapeutics allocation will drop from 55% to 30%
“We're about 55% therapeutics. I bet we're 30% therapeutics.”
Casdin: Life sciences can compound at a 20% CAGR over next decade
“And I still think very confidently that you can compound at a 20% Tager over the next decade while buckle up because it's going to be very volatile and it's not going to happen in a straight line.”
Casdin: Overweighting M&A potential in valuation models drove excessive position sizing
“The biggest investment mistake I've made in this firm, this fund, which, because I've made a lot, my wife can tell you about those, is that I calculated the potential of M&A into my valuation model and overly weighted it. For a particular outcome, and it drove…”