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Presented by Guardant Health: The ideas and innovators shaping health care | | | | |  | | By Ruth Reader, Ben Leonard, Carmen Paun and Erin Schumaker | Presented by Guardant Health | | | | | 
Investor Michael Yang says companies with Silicon Valley Bank loans still face a reckoning. | Courtesy of Michael Yang | The federal government has spared Silicon Valley Bank customers from multimillion-dollar losses by agreeing to backstop all of their deposits, but the bank's collapse may still have repercussions for health tech startups. Michael Yang, managing partner at investment firm OMERS Ventures, spoke with Ruth about what happened and what Silicon Valley Bank's failure portends. The interview was edited for length and clarity. So it sounds like the crisis was averted? Some of the transactions from last week have gone through. Some of them did not go through, but customers were told to reinitiate the same wire transfers. So I think people are generally feeling a lot more at ease and calm that the money is still there. Companies rely on loans they took from Silicon Valley Bank. How are they faring? The prevailing wisdom is it's going to be unlikely that you will be able to draw against those lines. So if you need that money to continue to run your business, you're in the situation of now going out and seeking alternative lending sources. How will Silicon Valley Bank’s collapse affect investment in health tech startups? Silicon Valley Bank was very embedded and deep with the health tech, digital health community. They did a lot of interesting industry research and thought leadership. They hosted and convened an entire community. So we are going to miss them as cheerleaders of the whole digital health revolution. If you were counting on that venture debt line that you had with SVB, and that was gonna get you from June of 2023 to December of 2023, you’re now six months shorter on your runway. So you are frantically trying to solve for that. I would expect those companies to do more cost reductions, which unfortunately usually means layoffs. And that could also lead to premature consolidations. For more of this conversation, tune into our Pulse Check podcast.
| | | | A message from Guardant Health: 49M individuals remain unscreened and are at increased risk of dying from CRC. Learn more. | | | | | | | 
Rhode River, Edgewater, Md. | Shawn Zeller | This is where we explore the ideas and innovators shaping health care. If you’re getting vaccinated, be sure to get a good night’s sleep, a new study published in Current Biology suggests. Not getting enough sleep can be detrimental to your antibody response, researchers found. Share any thoughts, news, tips and feedback with Ben Leonard at bleonard@politico.com, Ruth Reader at rreader@politico.com, Carmen Paun at cpaun@politico.com or Erin Schumaker at eschumaker@politico.com. Send tips securely through SecureDrop, Signal, Telegram or WhatsApp. Today on our Pulse Check podcast, more from Ruth's interview with Michael Yang, managing partner with OMERS Ventures, on the fallout from Silicon Valley Bank's failure.
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ARPA-H Director Renee Wegrzyn's budget will grow if Congress agrees with President Biden. | Josh Reynolds/AP Photo | President Joe Biden’s proposed fiscal 2024 budget, if passed, would recast federal research and development around more targeted applied research while reducing focus on more general basic science. The Advanced Research Projects Agency for Health, which Congress created in 2021 to sponsor research that’s too risky for the private sector, would be a major beneficiary. The budget allots $2.5 billion for ARPA-H, up from $1.5 billion this fiscal year. ARPA-H Director Renee Wegrzyn spelled out the agency’s ambition at a Monday briefing: to prevent people from needing care in the first place. She wants to hire 15 to 20 program managers this year and expects to share more details on the agency’s development in the coming months. Why it matters: The boost comes alongside Biden’s proposed 12 percent increase for applied research funding at HHS to $27 billion and a 23 percent proposed increase to $58 million for experimental development funding. By contrast, President Joe Biden would cut basic research funding by 1 percent, or $170 million. What’s next: Congress will ultimately write the fiscal 2024 budget after considering Biden’s proposals.
| | | | A message from Guardant Health: Now with the over 20,000 patient ECLIPSE clinical study, Guardant’s latest innovative test has been validated for detecting CRC. Learn More. | | | | | | | DOWNLOAD THE POLITICO MOBILE APP: Stay up to speed with the newly updated POLITICO mobile app, featuring timely political news, insights and analysis from the best journalists in the business. The sleek and navigable design offers a convenient way to access POLITICO's scoops and groundbreaking reporting. Don’t miss out on the app you can rely on for the news you need, reimagined. DOWNLOAD FOR iOS– DOWNLOAD FOR ANDROID. | | | | | | | | |  Sen. Lindsey Graham (R-S.C.) has proposed legislation to designate Mexican drug cartels as foreign terrorist organizations. | Getty Images | Republicans have proposed adding a new weapon to the U.S. arsenal in the drug war: Designate the cartels as foreign terrorist organizations. The White House says there’s no point. Treating the cartels like terrorists “would not grant us any additional authorities that we don’t already have,” National Security Council spokesperson Adrienne Watson told Carmen. But in a POLITICO Magazine piece, John Feeley, a 28-year diplomat who served as deputy chief of mission in Mexico City, and Joaquin Villalobos, a onetime Salvadoran guerrilla leader, say that’s not so. By designating producers of fentanyl as foreign terrorist organizations, they wrote: – U.S. federal and state law enforcement bureaucracies would have expanded powers to freeze the assets of U.S. citizen collaborators of the cartels. – Collaborators could be prosecuted under terrorism statutes, which carry stiffer sentences. In other words, the key benefit of designating the cartels as foreign terrorist organizations wouldn’t be to unleash new powers against them, but against the “Main Street small business owners of trucking firms, warehouses and stash houses ... accountants, lawyers and bankers, as well as the street level dealers.” Feeley and Villalobos argue that these U.S. distribution networks “are the most essential component of the foreign cartels’ operations because, without them, there are no sales and no profits.”
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