ICYMI 2024 Edition

As is now our tradition, the last Note of the year is an opportunity for us to reflect again on the topics we covered throughout the year in our Notes on Engineering Health. This year our Notes organize into three broad themes:


1/ U.S. Healthcare System Dynamics
This first category has regrettably been on the front pages over the past month as the country has struggled to respond appropriately to the brutal slaying of UnitedHealthcare CEO Brian Thompson. The complexities (and in some cases inequities) of the system were explored through various components and interactions within the healthcare system, focusing on the roles of different players and the financial dynamics that shape the industry:

Pharmacy Benefit Managers (PBMs): This Note defines PBMs as intermediaries that manage prescription drug costs and access for insured individuals. It details their core functions such as negotiating drug prices, creating formularies, managing pharmacy networks, and handling medication claims. The Note also discusses the evolution of PBMs through horizontal and vertical integration, and the resulting criticisms and regulatory scrutiny they face due to their influence on drug prices. January 2024 >

Providers: This Note traces the development of healthcare providers, from local community-based care to large, high-tech hospitals. It highlights the impact of wars, insurance policies, and public health initiatives on medical practices. The Note also discusses the shift from fee-for-service to value-based care and the rise of integrated care models. It also covers the financialization of healthcare, including the role of private equity firms in hospital ownership and their impact on quality of care. March 2024 >

Pharmacies: This Note outlines the evolution of pharmacies from independent apothecaries to large national chains. It differentiates between various types of pharmacies, including retail, hospital, clinical, compounding, specialty, mail-order, and online pharmacies. The Note also discusses the legal gray areas and safety concerns surrounding compounding pharmacies, particularly their production of generic versions of patented drugs. May 2024 >


2/ Scientific and Technological Innovation
This category includes Notes on an area of primary focus for Digitalis Ventures, the history, application, and implications of scientific discoveries and technological advancements in various fields:

Radiopharmaceuticals: This Note explores the history of radiopharmaceuticals, beginning with the early pioneers who suffered from radiation exposure. It explains the role of radiopharmaceutical compounds in nuclear medicine, including how they target specific cells and emit radiation for imaging or therapeutic purposes. The Note discusses the discovery of natural radiation and artificial radionuclides, and the development of techniques to target cancer cells. It also outlines the different types of radiation used in therapy, such as alpha and beta particles. April 2024 >

Unconventional Computing: This Note looks at non-traditional approaches to computation, focusing on slime mold and DNA computing. It details the ability of slime molds to solve complex problems like the Traveling Salesperson Problem and mazes. It also describes how DNA computing can perform calculations using principles of DNA replication, offering advantages such as massive parallelism, energy efficiency, and information density. The Note highlights the potential of unconventional computing to push the boundaries of traditional computer science. July 2024 >

Morphogenesis: This Note explores the process by which organisms develop their specific dimensions and forms. It identifies mechanical forces, gene regulatory networks, and environmental influences as key themes in morphogenesis research. The Note highlights the contributions of mathematicians and biologists such as D'Arcy Thompson, who analyzed the physical limitations of biological growth, and Alan Turing, who proposed a chemical reaction-diffusion model to explain pattern formation in nature. It also discusses how morphogenesis is crucial for evolution, as well as the work of Stephen Jay Gould in evolutionary developmental biology. The Note further touches on recent research on the real-time evolution of physical characteristics in elephants, and the work of Michael Levin on bioelectric mechanisms in development and regeneration. The essay concludes by commenting that a deeper understanding of morphogenesis could lead to interventions in areas such as organ regeneration and treatment of birth defects. August 2024 >

Biology and Geometry: This Note discusses the role of geometry in describing and explaining biological phenomena across multiple scales. It particularly reviews the discovery of the scutoid shape in epithelial tissues. The Note explains how geometry is crucial for understanding the structure and function of biomolecules, cell organization, tissue development, plant biology, and biomechanics. It emphasizes how advanced imaging techniques and computational methods have revolutionized our ability to analyze and model biological geometries. September 2024 >


3/ Broader Perspectives on Health, Society, & Innovation
Our final category includes Notes that examine broad societal and philosophical issues related to health, the environment, and the nature of innovation.

Academic Publishing: This Note traces the evolution of scientific publishing from the 17th century to the present day. It highlights the establishment of early scientific journals and their role in disseminating research findings. The essay explains how the scientific publishing industry has expanded, especially in the 19th and 20th centuries, to become the "lingua franca of scientific discovery." It describes the development of the IMRaD structure (Introduction, Methods, Results, and Discussion) for organizing articles, the implementation of peer review to ensure quality and validity, and the introduction of the journal impact factor as a metric for assessing journal quality. The Note also addresses the challenges and opportunities presented by the internet and digital tools, including open access, new metrics, and the need to maintain the integrity of scientific publications. It concludes by noting that while the field is changing, the peer-review process remains crucial for building trust in scientific research. February 2024 >

Environmental Health: This Note defines environmental health as a branch of public health concerning the impact of the natural and built environment on human health. It differentiates environmental health from ecological health. It introduces various environmental biomarkers used to monitor air, water, and soil quality, as well as ecosystem health. The Note also discusses the integration of these biomarkers into a multi-system approach, aiming to balance environmental concerns with human development and health. It presents the concept of “safe and just Earth system boundaries” that include considerations for climate, biosphere, water, nutrients, and air pollution. June 2024 >

Risk, Uncertainty, AI & Entrepreneurs: This Note distinguishes between risk and uncertainty in the business world, drawing on economist Frank Knight’s work. It explains that true uncertainty involves situations that are non-computable due to a lack of information. The Note outlines the challenges entrepreneurs face in dealing with uncertainty, including actor ignorance, practical indeterminism, agentic novelty, and competitive recursion. It also discusses the limitations of current AI approaches in addressing true uncertainty. These categories provide a framework for understanding the diverse topics covered in the essays, highlighting the interconnected nature of healthcare, scientific progress, and societal challenges. October 2024 >

Value Capture: This Note explores the concept of value capture in the context of innovation. It references economist Joseph Schumpeter’s theory of creative destruction and how it inspires the modern tech industry. The Note also references William Nordhaus's work on Schumpeterian profits which argues that innovators capture only a small fraction of the total value created from their work, with most benefits flowing to society. It discusses the implications for innovation policy, including the need to balance rewarding innovation with ensuring widespread benefits. November 2024 >

We appreciate you reading our Notes and hope that you will continue to engage with us during 2025. Until then, the whole team at Digitalis Ventures wishes you a happy, healthy, and peaceful New Year.

– Geoffrey W. Smith



First Eleven
Usually, First Five is our curated list of articles, studies, and publications for the month. This month, we provide our favorite entry from each edition of our monthly Notes during 2024:

1/ January: CAR-T against aging
Two trends came together recently in a compelling Nature Aging article as a new way to prophylactically help healthy aging. Researchers brought together a known biological phenomenon—that senescent cells are detrimental to health—and a promising technology— CAR-T cells able to target specific antigens over long periods. By training T cells to eliminate senescent cells, scientists significantly prevented age-related metabolic dysfunction in mice.

2/ February: Or stop eating altogether, immune edition
A team from the University of Cambridge may have uncovered how fasting could reduce systemic inflammation, a phenomenon known but unexplained. Researchers showed in a Cell publication that levels of plasma IL-1β were lower in fasting compared to fed subjects, while the lipid arachidonic acid (AA) was elevated. AA acts on macrophages through the NLRP3 pathway, just like nonsteroidal anti-inflammatory drugs (NSAID), potentially solving a second mystery!

3/ March: Not just the Princess of Wales
If you have the feeling that young people are diagnosed more often than before with cancer, you’d be right, although the picture is complex. Nature compiled the data around this phenomenon and helped uncover some trends. While early-onset cancers—in adults under the age of 50—still account for only a fraction of the total cases, the incidence rate has been growing, and the number of deaths from early-onset cancers has risen by nearly 28% between 1990 and 2019 worldwide. There are significant disparities between types of cancer, populations, and socio-economic backgrounds worth digging into to uncover what, if anything, can be done to revert these worrisome trends.

4/ April: Survival of the nicest
What if the motivating force behind our drive to thrive was cooperation rather than competition? That is the argument of a new book, Selfish Genes to Social Beings: A Cooperative History of Life by Jonathan Silvertown. Starting at the cellular level, the author makes a compelling argument that cooperation is key to multicellularity and increased complexity. He expands this idea to the organism, population, and human society levels. It is an optimistic and well-documented view of nature and human organizations for which you can find a helpful review on the Nature website.

5/ May: Fitness in the cells
Sure, exercise is good for you. But how good? A (big) team of scientists from the Broad Institute profiled the temporal transcriptome, proteome, metabolome, lipidome, phosphoproteome, acetylproteome, ubiquitylproteome, epigenome and immunome in whole blood, plasma and 18 solid tissues in male and female rats over eight weeks of endurance exercise training. The huge study published in Nature highlighted meaningful differences in all tissues, many of them relevant to human health, and the trove of data can now be used as a new benchmark to measure the effect of exercise on human health.

6/ June: E pluribus unum
A new single-cell sequencing technology called Strand-seq enabled scientists to show that about 1 in 40 human bone marrow cells carry massive chromosomal alterations without causing any apparent disease or abnormality. The study, published in Nature Genetics, suggests there may be more genetic differences between individual cells in our bodies than between different human beings. It shows that mosaicism is more common than we knew and not necessarily a driver of disease.

7/ July: A Genealogy of Technology and Power Since 1500
Calculating Empires is a mind-blowing, large-scale research visualization exploring how technical and social structures co-evolved over five centuries.

8/ August: Socio-genomics
Socio-genomics—the influence of one person's genotype on the observable traits of another—is an emerging field of genomics. Recent research suggests that "Peers' genetic predispositions for psychiatric and substance use disorders are associated with an individual's own risk of developing the same disorders in young adulthood. What our data exemplifies is the long reach of social genetic effects.” Read more here >

9/ September: Going critical
“If you've spent any time thinking about complex systems, you surely understand the importance of networks. Networks rule our world. From the chemical reaction pathways inside a cell, to the web of relationships in an ecosystem, to the trade and political networks that shape the course of history. This is our topic for today: the way things move and spread, somewhat chaotically, across a network.” Read more here >

10/ October: The fourth dimension
What makes 4D weirder than all other dimensions? As one mathematician [said], “In dimension 4, everything goes a bit crazy.” That’s because, according to another [mathematician], “there’s just enough room to have interesting phenomena, but not so much room that they fall apart.” Read more here >

11/ November: Haystacks of needles
Nicholas Carr recently republished a piece where he unpacks the idea of informational overload. “Information overload takes two forms, which I’ll call situational overload and ambient overload. They need to be treated separately. … Situational overload is the needle-in-the-haystack problem: You need a particular piece of information—in order to answer a question of one sort or another—and that piece of information is buried in a bunch of other pieces of information. … Situational overload is not the problem. When we complain about information overload, what we’re usually complaining about is ambient overload. This is a different beast. Ambient overload doesn’t involve needles in haystacks. It involves haystack-sized piles of needles.” Read more here >



Did You Know?
In this section of our newsletter, we seek to demystify common terms and practices in our work as investors.

Preferred Stock vs. Common Stock
In venture capital, preferred stock is often used alongside common stock to provide investors with certain rights and preferences. Preferred stock typically offers advantages such as priority in receiving dividends, liquidation preferences, and sometimes voting rights. Common stock, on the other hand, represents ownership in the company but typically comes with fewer rights and preferences. Preferred stock is favored by venture capitalists because it provides them with a level of protection and potential for higher returns in case of a company's exit (e.g., acquisition or IPO). Common stock is usually issued to founders and employees.

The specific terms and conditions of preferred stock can vary widely and are negotiated during the investment process, allowing investors to tailor their investment to their risk and return preferences. Ultimately, venture capitalists use preferred stock as a way to protect their investment and gain certain benefits not typically available to common stockholders.

– Haiming Chen & Dylan Henderson

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