From biotech booster to Republican contender: the rise of Vivek Ramaswamy

None of the contenders for the Republican presidential nomination cared much about Vivek Ramaswamy six months ago, when the 38-year-old biotech entrepreneur launched his campaign with a promise to vanquish “the woke left”.

But through a blend of contrarian instincts, relentless campaigning and fealty to frontrunner Donald Trump, Ramaswamy has capitalised on his self-styled image as a supremely successful businessman to the point where he now comes second in some Republican primary opinion polls.

His threat to others vying to be the party’s nominee was on display at this week’s debate in Wisconsin, where he was the target of sustained attacks from rivals.

Ramaswamy has tried to style himself as a younger Trump with less baggage — a self-made businessman who has built a net worth of nearly a billion dollars, according to Forbes. “I’m not a politician . . . I’m an entrepreneur,” he said at this week’s debate. “My parents came to this country with no money 40 years ago. I have gone on to found multibillion-dollar companies.”

His campaign has been marked by a tendency to make impractical promises, such as a pledge to fire 75 per cent of Federal government employees in his first term. That has drawn unflattering comparisons to his time as a biotech entrepreneur, when he was prone to accusations of hype.

Ramaswamy earned part of his fortune by touting the promise of an experimental Alzheimer’s medicine he acquired from GSK for just $5mn in 2015. In private, executives at the British pharma company were scathing about the drug’s prospects, arguing they would not have parted with the molecule for such a small sum if it had any chance of success.

He purchased the medicine via Roivant, his drug development group, before creating a subsidiary named Axovant to develop it. Axovant filed for an initial public offering that raised $315mn in the largest biotech flotation on record, securing a valuation of $3bn after the first day of trading.

Then aged just 30, Ramaswamy promised to unearth other forgotten compounds and turn Roivant into what he described as the “Berkshire Hathaway of drug development”. In doing so, he would generate “the highest return on investment endeavour ever taken up in the pharmaceutical industry”.

The valuation of Roivant, then a privately-held company, increased after the IPO and Ramaswamy in 2015 sold part of his stake to Viking Global Investors. His tax return for that year shows $37mn in capital gains.

However, as GSK had privately predicted, the medicine was a flop and in 2017 it failed clinical trials, causing Axovant’s shares to collapse. Roviant’s holding company structure insulated it from the worst of the crash but other investors lost millions of dollars. Earlier this year, shareholders of Axovant, since renamed SioGene, voted to liquidate and dissolve the company.

“Ramaswamy certainly didn’t introduce hype into the biopharma IPO sphere,” said Derek Lowe, a pharmaceutical researcher and commentator. “There is always hype there but it just seemed like an egregious amount of it, especially for someone who had absolutely no background whatsoever in any of this stuff.”

However, Paul Davis, who shared a dorm with Ramaswamy while at Harvard and is now Roivant’s head of communications, said he was “devastated” by the failure. “It was brutal for him because he felt he had staked his reputation on this particular programme . . . He definitely felt he had let down the investors who had invested in him.”

In a statement to the Financial Times, Ramaswamy said: “I developed an Alzheimer’s drug. Like 99.7 per cent of all drugs tested for Alzheimer’s disease, it failed. That was a hard experience for me. But hardship isn’t the same thing as victimhood. Victimhood is a choice, and I chose to be victorious instead.”

That victory is evident, argues Ramaswamy, in the fact that under his leadership Roivant and its subsidiaries developed five drugs that subsequently went on to secure approval from the US Food and Drug Administration. It is, he told the FT, “one of the best track records for a new biotech company in modern US history”, adding: “that’s how I made my money”.

In September 2019, Roivant sold five of its most promising subsidiaries to Japan’s Sumitomo Dainippon Pharma in a blockbuster $3bn deal. Ramaswamy’s tax return for 2020 shows he made capital gains worth $174.5mn.

Yet the fact that Ramaswamy owes his wealth to the regulatory imprimatur of the FDA has irked some former associates given his campaign pledge to gut what he describes as a “corrupt” agency.

“This is not the Vivek that I knew,” said Don Berwick, a former administrator of the US Centers for Medicare and Medicaid, who resigned as a member of Roivant’s advisory board in 2021. “I don’t know where that change came from. It marks to me a deep hypocrisy, untrustworthiness. He either was not being honest with us in the advisory group to his true beliefs or is being calculating and cynical.”

Ramaswamy dismissed Berwick’s criticism as “politically motivated”, pointing out he headed up CMS during Barack Obama’s administration.

After making a fortune in biotech, Ramaswamy turned his attention to fund management. In January 2021, he stood down as Roivant’s chief executive and the following year launched Strive Asset Management, an “anti-woke” money manager. Backed by Republican financiers Peter Thiel and Howard Lutnick, Strive aimed to capitalise on the backlash against companies trying to address climate change and diversify their workplaces.

In an interview with the FT in Iowa last month, Ramaswamy described the relationship between the Republican party and corporate America as “fraught”.

“There’s a backlash against corporations using commercial power to advance political and social agendas,” he said.

When asked about moving from the business world to the campaign trail, Ramaswamy said: “The part about this has been most rewarding for me is speaking my mind without a filter. That’s what I have been doing on this campaign. And I wasn’t free to do that in my life in corporate America.”

Strive’s largest fund, DRLL tracks an index of energy stocks and charges 41 basis points, quadruple market leader State Street. Strive had attracted $600mn by the time Ramaswamy stepped down as CEO to run for president. He still owns a large stake.

Ramaswamy and Strive were recently sued in New Jersey by a former employee who contends she was fired for resisting the use of marketing materials that improperly promised future returns. Last year DRLL’s marketing literature said that if companies were freed from ESG concerns “US energy stocks have room to appreciate 2-3x in value over the next 12-24 months”.

Strive said the former “employee had been terminated for underperformance” adding that the company “intends to vigorously defend itself against this lawsuit”.

Tricia McLaughlin, a spokesperson for Ramaswamy’s campaign, said: “The timing of these lawsuits is highly suspicious and reeks of opportunism. Vivek fired underperformers, as he will in the federal government.”