A start-up’s plan to run drug experiments and even develop pharmaceuticals in orbit is taking shape. If it works, it could mark a step toward developing new medicines and, ultimately, a burgeoning space-based manufacturing industry.

The start-up in question is Varda Space Industries. This week Varda announced a partnership with biotech and pharmaceutical company United Therapeutics, a biotech company that is known for its treatments targeting rare respiratory diseases and for organ transplants.

For the past few years, the Los Angeles County–based Varda has been sending capsules into space to develop its technology for performing automated experiments that it says can only be done in microgravity. These include the manipulation of certain kinds of small molecules—the backbone of many different types of medicines, from antibiotics to corticosteroids. “Surprisingly it’s very economical for things like small molecules, where you’re able to create novel crystal seeds in space, and then bring them back down to Earth,” says Michael Reilly, Varda’s chief strategy officer.

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United Therapeutics will primarily test its small molecule drugs with Varda’s in-orbit technologies, Reilly says. But he believes that applications will expand beyond United Therapeutics’ drugs to a range of biotechnologies, such as monoclonal antibodies, which, he believes, could eventually transform from primarily intravenously administered treatments to subcutaneous shots.

Varda’s goal is to provide an in-orbit environment to develop crystals for drugs under conditions that can never be achieved on Earth. “In space, you can get bigger crystals, more perfect crystals, and they can be more uniform,” says Anne Wilson, a Butler University chemist, who has designed experiments for the International Space Station (ISS) and collaborated with Redwire Space, a space infrastructure company. Crystals with unique physical structures can also be spawned in orbit, she says. Because of such advantages, one could fashion crystals with particularly valuable properties—for example, to make a drug become more soluble and require fewer doses, thereby reducing costs, Wilson says.

The potential is there, but it is currently a risky business, says Gerard Capellades, a chemical engineer at Rowan University, who has also worked with Redwire. For one, there’s the challenge of scale, he says: researchers will have to try to use the crystals grown in space as seeds that they can multiply on the ground or will need to focus on growing single, high-value crystals for applications outside the pharmaceutical sector. It’s also exceedingly difficult to control the experimental environment in such a way that guarantees the precise crystal structure needed in a timely and cost-efficient manner. Capellades describes the approach as a game of chance: “For the same environment, sometimes it can take minutes to form a crystal, and sometimes it can take weeks or longer,” he says. But he thinks that costs will eventually drop and that it’s worth pursuing.

Varda’s orbital lab, nicknamed “Winnebago,” consists of a 300-kilogram (about 660-pound) satellite bus. After being deposited in orbit by a launch vehicle, Winnebago uses its own propulsion to maneuver into the right attitude. The satellite houses the capsule in which the experiments are done. Once the work is complete, the capsule reenters the atmosphere at some 18,000 miles per hour, parachuting down with a bump in the Australian outback. (An early prototype’s return to Earth, with planned landing zone in a desert in Utah, was delayed in 2024 because the company was initially denied a reentry license by the Federal Aviation Administration.)

In addition to drug experiments, Varda also brings various defense experiment payloads on its spaceflights for the Pentagon to help defray the cost, Reilly says. While launch costs per pound of cargo have dropped over the past decade, thanks especially to SpaceX’s reusable rockets, they’re still not cheap. So Varda and other space companies keep looking for new customers.

Still, the drug industry may be one of the most enthusiastic about making the space economy work for it. “First, it’s a giant market,” says Matthew Weinzierl, a Harvard Business School researcher, who studies the private space sector. “It’s also because the mass of some of the key ingredients in pharmaceuticals is relatively small.” For years, academic and commercial researchers have sent experiments to both the ISS and China’s space station, Tiangong. But according to Reilly, Varda and SpaceX are currently the only companies capable of launching experiments into orbit that don’t need to be operated by astronauts.

New opportunities could also emerge in the coming commercial space station era, planned for the 2030s, when new orbital outposts launch to replace the aging ISS. For example, the companies Space Tango and Voyager Technologies (formerly Nanoracks) have already begun providing plug-and-play research support services in space, and Voyager Technologies is working on a commercial station concept, called Starlab. That proposal and others have the pharma industry at their center, Weinzierl says. Meanwhile Varda is planning for more partnerships and a faster launch cadence, eventually moving from a launch per quarter to every other month.

Weinzierl hopes that Varda’s partnership with United Therapeutics turns into a successful proof of concept that could then be replicated. Short of that result, it could set off a domino effect, he argues, with more pharma space company alliances on the horizon. “It would be fantastic if this partnership yielded a couple or even one blockbuster product or drug that really started opening up profitable business models for pharma in space at scale,” he says.