Sometimes, a capsule falls back to Earth from orbit, carrying something that has changed slightly from when it left the planet.

The change isn't huge, not something you'd announce in a big meeting or put in a report for investors.

It's just a small difference, but enough that the people who paid for the capsule to go up are now running new tests, filing new patents, or quietly changing their plans for molecules they've been working on for years in their labs.

While everyone's attention is focused on the flashy side of space exploration, like constellations, crewed vehicles, and the latest rocket developments, there's a quieter, yet equally fascinating story unfolding.

It's about the impact of microgravity on chemistry, and how spending time in an environment where sedimentation and convection don't exist can change things in measurable, albeit still early, ways.

And, yes, I am writing this because of the SpaceX IPO last week.

The interesting part is that the companies funding these initiatives are mostly from the pharmaceuticals and biotech sectors, not the space industry itself. On the other hand, the companies building the necessary vehicles and hardware are indeed from the space sector.

What's surprising is that most of the market isn't paying close attention to this development, at least not yet.

The intersection of space exploration and biotech is an area that's still largely under the radar, but it has the potential to lead to some groundbreaking discoveries. As researchers continue to study the effects of microgravity on chemical reactions and processes, we can expect to see some exciting breakthroughs in the years to come.

There's a gap between what's already happening and what still needs to happen on a larger scale. Right now, capsules are flying, materials are being returned, and data is being collected in labs.

After years of doing formulation work on the International Space Station, the hardware is being used to create commercial products.

Spacecraft are being built specifically to host and recover these payloads. However, no one thinks that this will become a routine, high-volume manufacturing process in just a couple of years. The big questions are how quickly the cost of processing materials in orbit will decrease, whether the benefits of formulation and processing will still be seen when scaled up, and how regulators and big pharmaceutical companies will view materials made in space - will they be seen as normal tools or exotic experiments?

The cost per useful gram of material processed in orbit is a key factor, and it's unclear how fast it will come down. Additionally, there are concerns about whether the advantages of space-based formulation and processing will hold up when scaled up to larger volumes.

Furthermore, it's uncertain how regulators and big pharma will treat space-derived materials - will they be accepted as standard or will they be viewed with skepticism?

Only time will tell if space-based manufacturing can become a viable and cost-effective option.

The physics is straightforward once you strip away the marketing stuff. In a gravitational field, crystals grow with currents and settling that create defects, uneven sizes, and sometimes the wrong shape entirely.

In orbit those forces largely disappear. The result can be larger, more uniform crystals or entirely new crystal forms that are difficult or impossible to produce cleanly on Earth.

That difference has shown up in work on antivirals like ritonavir, certain antibodies and other small molecules where particle size distribution or stability directly affects formulation, shelf life, or bioavailability.

Some of the early returns have been promising enough that companies are running follow-on missions rather than treating it as a one-off science project.

The idea of commercial space exploration is no longer just a concept, it's actually happening. Companies like Varda have already sent capsules into space, processed materials, and brought them back to Earth.

Rocket Lab has built and operated the spacecraft that carry these capsules, and they've even managed the re-entry sequence.

Redwire has been working with pharmaceutical hardware on the International Space Station for years, and now they're creating a separate division to focus on commercial pharmaceutical work.

The progress is tangible, and it's clear that these companies are serious about making commercial space exploration a reality.

As the International Space Station (ISS) approaches its retirement around 2030, a new era of space exploration is emerging. Commercial stations are being developed, and launch costs are decreasing due to reusability, making space travel more accessible.

The introduction of dedicated return vehicles has also eliminated a major bottleneck, paving the way for more frequent flights. If a significant number of high-value drug programs start incorporating microgravity steps into their development or life-cycle management, it will lead to an increase in flight rates and the supporting infrastructure will need to expand accordingly.

This growth will ultimately transform occasional experiments into a recurring operational capability, marking a significant shift in the space industry. \

With the cost of launch decreasing, and the infrastructure growing, it's likely that we'll see a surge in space-based research and development, turning what was once a niche area of study into a mainstream aspect of scientific inquiry. The future of space exploration is looking brighter than ever, and it will be exciting to see how commercial stations and microgravity research evolve in the coming years.

There are other areas beyond pharmaceuticals that are also being explored. For instance, bioprinting of tissues and organs is being done in space because it doesn't have to deal with gravity, which can cause sedimentation.

Some researchers are using time in orbit to create better models of diseases or to study things that are hard to replicate on Earth.

Certain materials, like special fibers, super-strong alloys, and crystals, have been found to have fewer defects or improved properties when made in microgravity, which is hard to achieve on the ground.

The same systems used to crystallise drugs in space can also be used for these other processes, once it becomes cost-effective to do so.

This means that the platforms and vehicles that take things to and from space can be used for a variety of purposes, not just pharmaceuticals. As the economics of space-based research improve, we can expect to see more of these types of experiments and processes being done in space.

Four listed names already have direct or adjacent exposure through contracts, hardware, or enabling technology. Here is what we’re seeing in terms of opportunity..

Redwire's first-quarter earnings were impressive, with a 58% year-over-year increase to $97 million. Their full-year guidance is expected to be between $450 million and $500 million.

And they've already made significant strides in the pharmaceutical sector, with their hardware currently on board the space station and being used by major pharmaceutical companies.

To take this research to the next level, they've established a dedicated subsidiary focused on turning these projects into commercial deals that will generate royalties. Looking ahead to the next 5 to 10 years, the potential for space biopharma and in-space manufacturing to grow into a multi-billion dollar industry is vast.

With their existing hardware base and new commercial push, Redwire is well-positioned to capitalise on this trend, providing them with a direct line to recurring processing capacity as more platforms come online after the ISS. This could be a game-changer for the company, allowing them to tap into a lucrative market and drive long-term growth. As the industry continues to evolve, Redwire's early mover advantage and strategic investments could pay off in a big way, making them a major player in the space biopharma and in-space manufacturing sectors.

Rocket Lab is seeing some decent numbers, with $200 million in revenue in the first quarter, which is a 63.5% increase. Their backlog is now over $2.2 billion, and they have a gross margin of 38% for the period.

What's interesting is that they're not just launching rockets, they're also building and flying the spacecraft buses for Varda's manufacturing capsules, handling the work in orbit, and taking care of re-entry.

When you add their own launch schedule and the upcoming Neutron vehicle, the potential for growth is huge, especially if microgravity missions become more regular. If that happens, Rocket Lab's launch and spacecraft systems revenue could really take off, thanks to higher flight rates and more dedicated return vehicles. This could be a game-changer for the company, and it's likely that their revenue will continue to compound as they expand their operations.

With their current momentum, it's exciting to think about what the future might hold for Rocket Lab.

Velo3D has made a tonne of progress, with a notable increase of 48% in the first quarter, reaching $13.8 million.

The company has also provided guidance for 2026, expecting to reach $60 to $70 million, and is on track to achieve positive EBITDA in the second half of the year.

One of the key highlights is the improvement in gross margins, which have already risen to 17%. Furthermore, Velo3D is gaining traction in the defense and space production sectors, securing contracts for their metal additive systems.

These systems are specifically designed to manufacture complex parts used in rockets, spacecraft, and future in-space hardware. As the ecosystem expands and more platforms are developed, the demand for these precision components is likely to increase. Although the numbers are still relatively small, the growth rate and margin trajectory are aligned with the hardware buildout that will enable the rest of the theme to move forward.

With this momentum, Velo3D is well-positioned to capitalize on the growing demand for its products and services. The company's focus on delivering high-quality, complex parts for the space and defense industries is a key factor in its success, and its ability to scale and meet the increasing demand will be crucial in driving its future growth.

United Therapeutics had a great first quarter, making $781 million with a net income of $275 million. They're already doing well with drugs for pulmonary hypertension. Now, they're teaming up with Varda to send medicine into space to study rare and serious lung diseases. By doing this in microgravity, they hope to create better and more stable medicines.

They plan to do several missions to see how microgravity affects the way medicines are made. In the next 5 to 10 years, their main business will keep growing, and this new partnership will give them more opportunities to create new medicines and own the rights to them. This is a big deal because it would be hard to do this kind of research on the ground.

These companies are not going to make a BIG impact anytime soon. They are smaller businesses in an industry that needs a lot of money to operate and still loses money in some cases.

There are also risks that they might not be able to deliver on their plans and that they might need to raise more money, which could dilute the value of their shares. It's also going to take some time to figure out the rules and regulations around making medicines in space, and big pharmaceutical companies are going to be cautious about adopting this new technology.

The good news is that the science behind it works, the equipment is being tested, and there are already contracts in place. But the hard part is still ahead: turning these promising experiments into a reliable and profitable way of making things.

What compounds over five to ten years is the infrastructure layer. More platforms, more frequent flights, lower per-mission costs, and a handful of clear wins on specific molecules or processes create a flywheel.

The companies that own the vehicles, the processing hardware, or the enabling manufacturing technology, or that have direct partnerships to exploit the output, are the ones that can scale with that flywheel rather than just watching it.

The capsules are already moving. The question that will matter in 2030 or 2035 is how many more are worth flying on a regular basis and who built or partnered on the repeatable pieces that make those flights possible.

This is a huge theme for us.

And we will be covering it constantly as part of the Academy community, as well as how to trade it.

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