The Meb Faber Show - Better Investing Dan Rasmussen & D.A. Wallach on The Future of Biotech and Healthcare | #589
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Jul 4, 2025 
In this episode, Dan Rasmussen, founder of Verdad Advisers, and D.A. Wallach, a venture investor and musician, dive into the exciting world of biotech and healthcare. They discuss the transformative impact of AI and emerging treatments like gene therapy on patient care. The duo shares insights on private equity dynamics and investment strategies, especially in the context of rising interest rates. They also touch on global market trends and Japan's corporate reforms, highlighting unique investment opportunities in the evolving landscape.
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Musician to VC Transition
- D.A. Wallach transitioned from a musician to a venture investor after meeting Spotify's founders.
- His healthcare investment journey began with Doctor on Demand, exposing him to the sector's inefficiencies.
Why Biotech Collapsed
- Biotech's valuation collapse is mainly due to increased interest rates raising discount rates on future cash flows.
- Public investor rotation away and IPO market shutdown severely limited capital for biotech companies.
Biotech’s Unique Investment Characteristics
- Biotech is unique, with many companies losing money long-term but a small minority producing outsized returns.
- Traditional financial models misclassify biotech firms due to their negative earnings and cash burn dynamics.