Vivek and Trump: How To Get Rich from Failure
Fail rich and keep trying as President
Vivek Ramaswamy wants you to think he’s a scientist. Similar to how Donald Trump wants you to think he’s a great businessman.
In reality, they’re both great marketers and showmen.
Many of us know about Trump's business failures from Trump University to his bankrupt casinos. Few, however, are aware of Vivek’s strikingly similar business record.
Both have become incredibly rich from failure.
It should be readily apparent to anyone paying attention that Vivek is running as Trump 2.0; a “successful” businessman who allegedly is owned by no one. So far it has catapulted him from a political nobody to second place in the Republican polls.
In many ways, Vivek is even more extreme than Trump.
But when it comes to Vivek’s business record, is he truly the independent and successful entrepreneur and scientist he portrays himself to be? Or like Trump, is he only out for himself, seeking to promote his own self-interests?
I will try to give a balanced version of the facts. You be the judge.
Vivek Ramaswamy, the Ivy League populist for the working man
It always fascinates me when working-class people listen to great orators like Vivek or agitators like Trump and come away with the thought: “Wow, this guy is really fighting for me.”
Like Trump, Vivek is Ivy League-educated. So is DeSantis, by the way.
And there’s nothing wrong necessarily with being Ivy League educated. We should want the President of the United States to have a strong resume.
But it’s a stretch - for me, at least - that guys like Vivek can fully empathize with the West Virginia coal miner who can no longer find a job that pays him a livable wage.
I say that because Vivek was blessed with great connections having graduated from Harvard (undergrad degree in biology) and Yale (juris doctorate). Connections that exist only in dreams for many of us.
And for the record, I’m not sure a degree in biology alone qualifies someone as a scientist.
Vivek founded Roivant Sciences in 2014. He was able to start it with nearly $100 million in funding from investors including QVT, a hedge fund he worked for after Harvard (connections!). Then he assembled an impressive bipartisan advisory board, including Democrats like Kathleen Sebelius who worked in the Obama Administration (connections!).
Of note: the “ROI” in Roivant does not stand for “Running Over Infections.” It stands for “Return On Investment.”
Vivek’s biotech company was never mission-driven unless that mission was pure capitalism. He didn’t go into biotech to cure Alzheimer’s or other awful diseases. He went into it to make a “Return On Investment”, as evidenced not only by his company’s name but from how it has operated.
ROIvant pump and dump?
Shortly after founding Roivant in 2014, Vivek negotiated the purchase of an Alzheimer’s drug from GlaxoSmithKline for $5 million.
Let’s put this in context: a big pharmaceutical company like GlaxoSmithKline is basically giving a drug away at that price. It’s pocket change. They were unsuccessful with the drug and had basically given up after FOUR clinical trials.
So what could Roivant offer that the almighty GlaxoSmithKline couldn’t?
Vivek Ramaswamy. And his mother.
That’s right, Vivek added his mom to one of the failed clinical trials - she’s a physician in her own right - and added some more lipstick to the pig of the drug’s previous failures.
Suddenly, he was a Wall Street darling. He convinced investors - likely in the same way he’s convinced many voters recently - to fund his vision for the revolutionary drug. Which, of course, he renamed.
It led to what was then the largest IPO for a biotech stock. The company Vivek took public though was not Roivant, but Axovant (now named Sio Gene Therapies after what happened to Axovant). Vivek owned shares in Axovant through the private parent company, Roivant (remember this fact).
At this point, the Alzheimer’s drug had only completed Phase II clinical trials. It still needed to pass Phase III, which it had failed multiple times. But the money rolled in after the Axovant IPO, and Vivek was seeking to raise even more money to fund his broader visions for Roivant.
Prior to the Phase III trial results being announced, Vivek sold a portion of his stake in Roivant. Coincidentally, according to Vivek. But also very conveniently.
The Phase III clinical trial failed. Axovant stock plummeted some 75% in one day and further in the days after.
Vivek has refused to comment on how much (if anything) he lost after the Alzheimer’s drug’s failure. Many investors lost significant investments, including the California State Teachers’ Retirement System.
Given Vivek’s timely sale prior to the Phase III clinical trial results and his ownership through a private company, it’s unlikely he lost anything. In fact, the tax returns he’s disclosed reveal a far different picture: he’s worth almost $1 billion.
It’s important to note that none of this is necessarily illegal. Many investors throw big sums of money - at their own risk - on unapproved drugs with the hopes of enjoying windfall profits. But that also makes the market susceptible to great salesmen who can make bold and compelling claims, no matter how grandiose.
It’s almost like running for President.
Running for President or for ROI: Return On Investment?
Vivek reportedly still holds about a 7% stake in Roivant, the company he founded. And to be clear, since he left the company as CEO, it has successfully brought five drugs to market, passing the arduous FDA approval process.
So the company is by no means a total failure. Although with that said, it’s still never turned a profit.
Vivek, on the other hand, definitely has profited. He has made almost $1 billion largely from failing. As Trump did with the now-shuttered Trump University and many other Trump ventures, Vivek made his money and ran.
It all leads me to question: what are Vivek’s true motives in the 2024 presidential race?
Will he relinquish his stake in Roivant if he wins? Will he eliminate the entire FDA or at least a critical mass of it, as he’s promised to do with much of the administrative state, giving a massive benefit to pharmaceutical companies like Roivant?
Is Vivek’s presidential run based on a new vision for America or for getting a better ROI for ROIvant?
I’m skeptical that a guy who bought a drug for dirt cheap, dressed it up with help from his mom before selling it to the public markets, and then sold a big portion of his stake before its value plummeted is really concerned about the best interests of America.
Is it not the story of someone purely out for personal gain instead of seeking to change the world for the better?
So if and when you hear Vivek again say that he’s a “scientist” who has “developed a number of medicines”, immediately question the validity of those claims. If anything, he’s a savvy financier who sold off stakes in his company at the best possible times.
Donald Trump once said about John McCain that he liked “people who weren’t captured.”
Should we really like presidents who have made their fortunes from failing?
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