--- title: "Why Is Pharmaceuticals the First Industry Disrupted by the Space Economy?" type: "News" locale: "en" url: "https://longbridge.com/en/news/289197942.md" description: "The space economy is transitioning from concept to commercial implementation, with the pharmaceutical industry emerging as the first validated high-value application scenario. The microgravity environment significantly enhances drug crystal quality, driving innovations in drug delivery methods and production processes. With experimental validation by Merck and the entry of giants like Eli Lilly, space-based pharmaceutical manufacturing is moving from scientific research to industrialization, becoming a key breakthrough for realizing commercial value in the space economy" datetime: "2026-06-09T13:29:28.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/289197942.md) - [en](https://longbridge.com/en/news/289197942.md) - [zh-HK](https://longbridge.com/zh-HK/news/289197942.md) --- # Why Is Pharmaceuticals the First Industry Disrupted by the Space Economy? The space race is extending into the pharmaceutical industry. **More and more companies are moving drug research and development (R&D) and production to low Earth orbit, leveraging the microgravity environment to overcome the physical limitations of terrestrial pharmaceutical manufacturing, as an emerging space pharmaceutical industry accelerates its formation.** **Currently, companies such as Varda Space Industries and SpaceMD have begun commercial deployments in orbital manufacturing, while pharmaceutical giants like Eli Lilly and Bristol Myers Squibb have also participated in collaborative testing. Meanwhile, crystal growth experiments conducted by Merck on the International Space Station (ISS) in earlier years led to the FDA approval of a subcutaneous formulation of its star drug, Keytruda, in 2025, providing the most compelling proof of concept for the entire industry.** Behind this trend lies the industrial spillover effect released by the maturing commercial space infrastructure. Morgan Stanley predicts that the scale of the space economy could exceed $1 trillion by 2040. **Against the backdrop that multiple industries, including semiconductors and fiber optic cables, can benefit from space research, experts told CNBC that the pharmaceutical sector may be the industry to experience disruptive change the fastest.** For investors, the commercialization path of this sector is advancing from the laboratory stage toward scaled production. However, regulatory frameworks, return logistics costs, and infrastructure continuity after the retirement of the ISS remain key variables constraining the industry's acceleration. ## The Pharmaceutical Value of Microgravity: Why Manufacture Drugs in Space? Drug R&D on Earth has long been constrained by gravity. In terrestrial environments, sedimentation causes heavy particles to settle at the bottom, while convection effects cause hot and cold liquids to stratify. These mechanisms continuously interfere with the uniform growth of drug crystals. Phil Williams, Professor of Biophysics at the University of Nottingham, stated that in space, the absence of gravity allows scientists to cultivate more uniform, higher-quality crystals. Crystals grown in low Earth orbit are therefore more predictable and have fewer defects. Improved crystal uniformity directly impacts drug deliverability. Williams explained that when crystals vary in size, small crystals fill the gaps between large ones, leading to increased liquid viscosity. Viscosity determines how patients absorb the drug—high-viscosity biologics typically require large-gauge needles and prolonged hospital infusions. By reducing viscosity, complex therapies can be reformulated into fine-needle, painless injectable forms. Furthermore, drugs with higher stability can be stored without the need for deep-freeze air transport, significantly reducing financial and environmental costs. ## Merck's Validation: From Space Station Experiments to FDA Approval The business logic of space-based pharmaceuticals has been preliminarily validated by Merck's practice. In 2014, Merck conducted crystal growth experiments on the ISS to study the impact of the microgravity environment on drugs, including its best-selling cancer drug, Keytruda. Keytruda is a laboratory-synthesized antibody that initially required patients to receive intravenous infusions in hospitals for several hours. Ultraviolet imaging from the space experiments showed that antibodies cultivated in orbit formed highly uniform, stable, and easily dissolvable mixtures. Merck subsequently found a way to replicate these conditions on Earth, ultimately developing an injectable formulation that requires only minutes for administration, which received FDA approval in 2025. This case demonstrates that the value of space research lies not only in orbital production itself but also in its reverse empowerment of terrestrial pharmaceutical manufacturing processes. ## Two Commercialization Paths: The Different Bets of SpaceMD and Varda In terms of commercial models, SpaceMD and Varda represent two different strategic choices. SpaceMD is a dedicated subsidiary established last year by Redwire, an aerospace and defense technology company, focusing on commercializing drug products developed in space. Its core technology is PIL-BOX—an automated micro-laboratory designed specifically for crystallizing proteins in orbit. John Vellinger, CEO of SpaceMD, told CNBC that the company has launched 54 PIL-BOX units, tested 37 drug compounds, and partnered with companies including Eli Lilly and Bristol Myers Squibb. "We only need a tiny amount of crystals... We have proven that we can replicate this crystal for five generations," Vellinger said. "We have drug candidates, space-validated hardware, and royalty agreements." He stated that the ultimate goal is to utilize space to develop promising drug compounds that were previously shelved due to crystallization errors or instability. Varda, on the other hand, is betting on continuous orbital production, having developed a 300-kilogram-class autonomous manufacturing satellite equipped with a dedicated re-entry capsule. The company recently completed its sixth space capsule flight, launched aboard SpaceX's Transporter-16. Delian Asparouhov, President and Co-founder of Varda, stated that the concentration of active pharmaceutical ingredients (APIs) is extremely high; even small-batch payloads can generate considerable commercial value—the crystal API needed to provide the Pfizer COVID-19 vaccine for 450 million patients would fit into just two milk buckets. United Therapeutics recently announced a partnership with Varda to explore using microgravity to improve treatment solutions for lung diseases. Asparouhov stated that partners do not need to purchase spacecraft: "They just give us the drug, and we give them back a better drug." ## Bottlenecks Remain: Return Logistics, ISS Retirement, and Regulatory Challenges Despite the promising outlook, the commercialization of space-based pharmaceuticals still faces multiple structural obstacles. Logistics costs are the primary bottleneck. Asparouhov pointed out that while the aerospace industry has established a robust upstream supply chain, the return chain remains narrow and expensive. Existing return spacecraft designed for crewed missions (such as SpaceX's Dragon) prioritize safety as their primary engineering objective and are not suitable for high-frequency, low-cost commercial manufacturing logistics. The retirement of the ISS also brings uncertainty. Both Varda and SpaceMD believe that long-term reliance on this government-operated research platform is unsustainable. "Once you rely on a government-operated research laboratory... there is no clear commercialization path," Asparouhov said. "You are subject to the vagaries of geopolitics... a space station half-managed by the United States and half by Russia." On the regulatory front, the UK earlier this year became the first to acknowledge that patients can benefit from higher-quality space-manufactured drugs and established relevant market approval pathways. The UK Space Agency is also funding startup BioOrbit to conduct feasibility studies. BioOrbit is exploring a scalable space biopharmaceutical crystallization and manufacturing system and recently recruited two executives from Redwire: Molly Mulligan as President and Ken Savin as Chief Scientific Officer. Regarding the long-term shape of the industry, Williams holds a cautious attitude. He predicts that the mainstream model in the future will be manufacturing small batches of research samples in space and then replicating the process on Earth, rather than large-scale production in orbit. "Whether this is feasible is the key question," he said. "This is very exciting science and technology... but I am not as optimistic about its future as they are." ## Next Steps: The Vision of Commercial Space Stations and Orbital Industrial Cities As the retirement of the ISS approaches, industry participants have begun laying out alternative infrastructure. SpaceMD is establishing partnerships with commercial low Earth orbit destination operators such as Vast and StarLab. Varda plans to increase its flight frequency to seven times next year and eventually launch a fully reusable vehicle approximately ten times the size of its current one, gradually shifting toward an on-orbit fixed infrastructure model, using small space planes to shuttle raw materials. Asparouhov depicted a grander vision: "Once we can economically justify having people engage in this type of production activity in orbit, we may be able to justify 10 people, 100 people, 1,000 people, and at some point build the first industrial city in low Earth orbit." This vision remains quite distant from reality, but from Merck's FDA approval to Varda's sixth flight, the commercialization process of space-based pharmaceuticals is advancing with quantifiable steps. ### Related Stocks - [MRK.US](https://longbridge.com/en/quote/MRK.US.md) - [LLY.US](https://longbridge.com/en/quote/LLY.US.md) - [LLYX.US](https://longbridge.com/en/quote/LLYX.US.md) - [LLYZ.US](https://longbridge.com/en/quote/LLYZ.US.md) - [ELIS.US](https://longbridge.com/en/quote/ELIS.US.md) - [ELIL.US](https://longbridge.com/en/quote/ELIL.US.md) - [RDW.US](https://longbridge.com/en/quote/RDW.US.md) - [BMY.US](https://longbridge.com/en/quote/BMY.US.md) - [MS.US](https://longbridge.com/en/quote/MS.US.md) - [PFE.US](https://longbridge.com/en/quote/PFE.US.md) - [UTHR.US](https://longbridge.com/en/quote/UTHR.US.md) - [CELG.RT.US](https://longbridge.com/en/quote/CELG.RT.US.md) - [MS-O.US](https://longbridge.com/en/quote/MS-O.US.md) - [MS-Q.US](https://longbridge.com/en/quote/MS-Q.US.md) - [MS-E.US](https://longbridge.com/en/quote/MS-E.US.md) - [MS-I.US](https://longbridge.com/en/quote/MS-I.US.md) - [MS-L.US](https://longbridge.com/en/quote/MS-L.US.md) - [MS-P.US](https://longbridge.com/en/quote/MS-P.US.md) - [MS-A.US](https://longbridge.com/en/quote/MS-A.US.md) - [MS-F.US](https://longbridge.com/en/quote/MS-F.US.md) - [MS-K.US](https://longbridge.com/en/quote/MS-K.US.md) ## Related News & Research - [Eli Lilly's $3.8 Billion Vaccine Bets: Here's the Big Story Many Investors Are Missing](https://longbridge.com/en/news/288939248.md) - [Clearbridge Investments LLC Has $405.93 Million Stock Holdings in Eli Lilly and Company $LLY](https://longbridge.com/en/news/288953622.md) - [Eli Lilly's top dealmaker says don't be surprised to see more M&A that pushes Lilly into new areas](https://longbridge.com/en/news/288564842.md) - [Lilly shares jump as analysts see retatrutide data extending obesity market edge](https://longbridge.com/en/news/289044514.md) - [AlzeCure signs collaboration, out-licensing deal with Lilly for Alzheimer's drug](https://longbridge.com/en/news/289141264.md)