Uhh, I think Thiel doesn't understand what is going on here. I am going to respond to a few excerpts.

"The question is, can you change those probabilities into different numbers? The reason we invested in Stemcentrx at a valuation that would have been higher than many other biotechs we looked at is that we felt the whole company was designed to get these probabilities as close to one as possible at every step, to get rid of as much of this randomness or contingency as possible. That is something that we found deeply reassuring."

Broadly speaking there are two strategies for drug research: shotgun, and sniper rifle. If we're being honest, shotgun is the dominant method specifically because 10 chances is far safer than 1 "really good" shot that may or may not produce a really good drug. The one shot wonder shops usually fail early stage when they can't produce a chain of positive data from one funding round to the next. Biotech startups are longshots-- I would say that they are probably even longer shots than a software shop specifically because there can be unknown physical constraints of biology that can silently ruin an otherwise great idea, leaving other people to make the exact same mistake repeatedly after you're gone. Reducing inconsistency of your results is a core of the scientific method, practiced everywhere, but doing so effectively is hard when you don't have full understanding of any one component you work with. It isn't random behavior, it's just not fully understood behavior.

"One of the very unusual things they do is graft human cancer into the mice. It’s a somewhat more expensive way to do this than studying cancer in cell culture. It’s a somewhat harder structure to build. But drugs tested this way are much more likely to work in humans. They convinced me there is a surprising amount that has gone wrong with the cancer cell lines people have been studying. "

Literally everyone who is serious about making oncology drugs does this technique. It's a staple. I guess it's "unusual" if you aren't accustomed to the methods of biotechnology, but rest assured, this trick has been well-known for quite a while-- it is not a magic bullet, but it's better than alternatives. Cancer cell lines are known to be poor models in a number of dimensions, which is great because we can anticipate their shortcomings. Mouse models also have shortcomings that are somewhat well understood, but don't confuse this for a slam dunk. There are still many (most?) cases in which drugs developed from mice won't transfer to humans.

"But if biotech companies tend to invest money in ways that are pseudo random, then a lot of it must get wasted. You end up doing things where you say, “I am not sure it’s going to work.” Well, that sounds like a wasteful thing to do. The standard excuse that biotech companies have is that, “We don’t know if it’s going to work, so we have to do it this way.” That has to be inefficient."

Is this guy serious? You're never sure if it's going to work in the laboratory! Research is mostly "try something new, then try another new thing when that fails." It's "wasteful" because it's guided trial and error, and you don't have full totalitarian control over any of the variables. If you think you are investing in a new biotech company (or old, really) that has escaped this paradigm, I have a series of pyramids to sell you.

"This idea was very much in my mind by the time we invested in Stemcentrx in 2012. They had an annoyingly complicated problem, all these pieces you have to bring together, and they said, “We are just going to do it ourselves.” That is a mind-set that I very deeply share. I don’t want to name names, but there are other companies where, in some ways, this was the key thing that failed."

All biotech problems are annoyingly complicated, and the prerequisites for trying to solve problems are also annoyingly complicated. There are some extremely well funded companies that can do everything in house, but it's the wrong way to go about a startup-- even a lot of the larger biotechs contract stuff extensively. Why have problems with simple things that should work when you could contract them out and not worry? You can always bring that capability online in parallel in your own company at a later stage when you have more breathing room. It's a huge hassle to buy equipment, hire and train your own people to perform a task that someone else can do better and cheaper.

"The big picture is the question of whether biological science can be transformed into an information science. Can something that seems chaotic, fractal, and generally random be transformed into something more deterministic and more controlled?

"I think of aging and maybe just mortality as random things that go wrong. The older you get, the more random things happen, the more breaks. If it’s not cancer, you could get hit by an asteroid. So on some level, technology is trying to overcome the randomness that is nature. That is a question on the level of a company. Can you get rid of randomness in building a company? But the philosophical version of the question is whether we can get rid of randomness in its entirety and overcome the randomness that I think of as the evil part of nature."

Nature isn't random! Nature is complex, cryptic, self-referential, and chaotic, but it's deterministic at the level of biology. "Random things happening" is not a proper understanding of age-related decline; aging is the long-term compounding interest of metabolic byproducts. It really stuns me that Thiel's understanding of these things is so apathetic to reality.