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Direct-to-Consumer Genetic Testing

Where It’s Been and Where It’s Going

By

Updated February 18, 2013

As more and more of the small differences in the genes each one person are linked to traits, such as risk for certain diseases, ancestors' ethnicities, and sensitivities to drugs, companies have formed to provide individual genetic analysis. As discussed in a related article about the personal DNA analysis business, while some of these companies contract with doctors and healthcare organizations to provide genetic analysis for their patients, others have adopted a strategy of offering personal genetic analysis to anyone who wants it.

FDA and DTC

However, as discussed in a previous article, this developing direct-to-consumer (DTC) genetic analysis business niche faces some regulatory challenges. The FDA seems to believe that some of the health related gene results should be classed as a Medical Device according to section 201(h) of the Federal Food Drug and Cosmetic Act. Presumably, they are referring to the part of the definition that mentions devices “intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease.”

Given this murky regulatory situation, or perhaps because of it, the development of the DTC business segment has been a bit bumpy. Different companies have responded in different ways.

The DTC Companies

Navigenics was one of the pioneers of the personal genomics field, initially providing DTC genetic analysis services to anyone directly. However, it's strategy evolved about three years ago when, according to their then CEO, they found it “more effective to partner with a medical institution rather than do an end-run around them with a direct-to-consumer model.“ As a result, they discontinued their direct to consumer service and began working through health providers. Just recently, the company was purchased by Life Technologies and it is not clear how this will affect its strategy.

Pathway Genomics took a similar course of initially offering DTC services until receiving an advisory notice from the FDA. At that point, they changed their model and now only provide genetic analysis through health care providers.

Another early DTC genetics analysis enterprise is deCODEme. They have continued their DTC service but have just been purchased by Amgen who appear to be shutting down this service.

Really, the most successful enterprise in DTC gene tests has been 23andMe. Founded in 2006, for the last five years, they have provided DTC gene analysis. In the middle of 2012, they applied for FDA approval asking to provide results of several health-related tests directly to consumers. Trying to work with the FDA on a regulatory process for approval of DTC genetic health tests would certainly help them secure a preferred position in the DTC market, especially since the company also just received its first patent on a diagnostic test. It is likely this scenario is what helped them obtain their recent $50 million series D financing.

There’s Lumingenix, an Austrailan genetic analysis company started in 2011. They have been aggressively pushing forward with their DTC business as can be seen from its blog posting relating its response to the FDA. Although, since the looks as though it hasn’t been updated much since then, it is unclear how the process is proceeding. At the moment, the company only offers genotyping and is not clear if it plans to move into personal DNA sequencing.

Finally, there newcomer DNA DTC, who just started at the end of 2012 to offer DTC personal DNA sequencing. While they are new, the organization itself is not really new to genetic testing or the DTC market. Their parent company is Gene-by-Gene, which owns several genetic analysis enterprises, including DNATraits and FamilyTreeDNA both of which provide genotype DNA testing. To avoid FDA regulatory issues, DNA DTC states that they provide the data and only disclose identified known variants, further specifying that “no analysis or interpretation will be provided.”

Where Is DTC Genetic Testing Going?

At this point, it is not so clear where the DTC niche is going. While it’s an interesting and somewhat disruptive business model that shakes up the established medical testing practices and can potentially empower individuals to take much more control of their healthcare, is it a viable long term business model?

To get some perspective, maybe consider 23andMe who, for 6 years, have stayed true to the DTC approach. In this time, they have built a substantial database from the 180,000 genotype analyses they have run. The company has enabled researchers access to this data resource for hundreds of genetic association studies. This data and research has also provided the bases for their patent applications on specific diagnostic tests, which produces IP that can be further leveraged.

The whole picture paints a new emerging business model that uses broad based genetic services to create intellectual property and business capital that can be leveraged on many fronts. 23andMe gathers, consolidates, and organizes genetic information from its genetic analysis service to create value that can be diversely leveraged to a range of market segments. It is reminiscent to Google’s innovative approach that leverages the information and expertise produced from its free search engine. It should be no surprise, then, that Anne Wojcicki, 23andMe cofounder and CEO, is married to Google cofounder Sergey Brin, and Google is a major investor in the company.

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