From deCODE to Athleticode in DTC Genetic Testing
One week ago deCODE genetics declared bankruptcy and, yesterday, the Bankruptcy Court for the District of Delaware provided preliminary approval for deCODE’s liquidation plan, including the debtor-in-possession financing pledged by Saga Investments.
deCODE’s struggles have been well chronicled, and there has been plenty of other discussion about whether direct-to-consumer (DTC) genetic testing is a commercially viable industry at this point in time. Although it is nothing more than sheer coincidence, the past week has also brought to my attention two new DTC genetic testing companies that, though they may be quick to draw the skeptic’s attention, indicate that there are investors that continue to see long-term commercial potential in DTC genetic testing.
deCODE Declares. Now What?
If you’re a regular reader of the Genomics Law Report – or the Wall Street Journal for that matter – by now you have probably heard the news: deCODE genetics, Inc. has filed for Chapter 11 Bankruptcy protection.
Given deCODE’s recent financial struggles, this latest development is hardly a surprise. Indeed, two months ago, we anticipated this very event when we asked a hypothetical question: “What Happens if a DTC Genomics Company Goes Belly Up?” That’s precisely the question that deCODE’s customers and creditors are asking today.
In our original article, which was initially published in three parts on September 14, 15 and 16 at Genetic Future, we looked at the interplay between the privacy policies of DTC genomics companies and the relevant bankruptcy law statutes, and offered some educated guesses as to how courts and companies would handle the sale of a bankrupt company’s sale of its customers’ genetic information.
The coming weeks will see that analysis tested in Delaware bankruptcy court. In the meantime, there is a lot to unpack in this morning’s deCODE announcement.
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23andMe’s New Game Plan: What it Means for the Company and for DTC Genetic Testing
Late Friday afternoon, direct-to-consumer (DTC) genetic testing company 23andMe announced a change in its game plan. Currently, 23andMe offers a single product – a $399 genotyping service that provides customers access to information about their genetic ancestry as well as genetic variants linked to certain other traits and diseases, including diabetes, Parkinson’s disease and certain cancers.
Beginning this Thursday, November 19th, that $399 service will be cut in two. Customers will have the option of purchasing a $399 “Ancestry Edition,” which includes 23andMe’s new “Relative Finder” tool or a $429 “Health Edition,” which includes testing for variants associated with genetic diseases and other traits, carrier status and drug response. The complete package will be $499. At Genetic Future, the indefatigable Daniel MacArthur has already covered 23andMe’s announcement and highlighted several of the most salient points.
Today, in three separate commentaries, I analyze 23andMe’s announcement and its implications for the DTC genetic testing industry:
- In “A Fundamental Right to Genetic Information (Now More Expensive Than Before),” I look at the unexpected increase in price of 23andMe’s service and the impact of the company’s new model on its customers’ ability to exercise their “fundamental right” to access their genetic information.
- Next, in “The Open Secret of DTC Medical Genetic Testing,” I explain why separating recreational genetic testing from medical genetic testing is likely to provide 23andMe – and other companies employing the same model, including Pathway Genomics – with important flexibility in dealing with future changes, whether driven by regulatory or market forces.
- Finally, in “DTC Genomic Research: Revolution or Minor Uprising?,” I discuss recent under-the-radar changes made by 23andMe to its pioneering DTC genomics research activities.
The Open Secret of DTC Medical Genetic Testing
This is the third of four related posts analyzing 23andMe’s decision to separate its health and ancestry DTC genetic testing services. For more please see 23andMe’s New Game Plan: What it Means for the Company and for DTC Genetic Testing, A Fundamental Right to Genetic Information (Now More Expensive Than Before) and DTC Genomic Research: Revolution or Minor Uprising?
For well over a year, the DTC genetic testing industry in general, and 23andMe in particular, has been undergoing a shift in the way it characterizes and promotes its offerings. Where they once focused on the educational and recreational features of their services, DTC companies have rolled out an increasing array of tests and reports that appear unambiguously aimed at influencing their customers’ clinical or medical decision-making.
Genomic Research Continues To Go DTC
Way back in July I wrote about an emerging dimension in the DTC genomics space: direct-to-consumer genomic research. That article focused on the activities of 23andMe, and TruGenetics, which made a summertime splash by offering free genome scans to the first 10,000 individuals willing to contribute their genomic information to a commercial research database. While TruGenetics has since faltered, 23andMe continues to push DTC research forward.
Last month, at the American Society of Human Genetics (ASHG) meeting, 23andMe presented some of the first preliminary DTC research results. Daniel MacArthur of Genetic Future discussed 23andMe’s findings (emphasis in original):
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The Human Provenance Project Attempts to Unring the Bell
Last week I wrote about the U.K. Border Agency’s widely criticized Human Provenance pilot project (“Why the Errors of the Human Provenance Project Will Echo Beyond the U.K.’s Borders”) and suggested that “we should not be surprised to see the pilot project substantially revised, or even scrapped altogether.” I worried, though, that the damage may already have been done by contributing to a highly charged atmosphere that could add to pressure for premature regulation and public skepticism.
Today brings word, via ScienceInsider, that the Border Agency is pulling back on its plans to use DNA and isotope analysis to evaluate the nationality of asylum seekers attempting to enter the U.K. According to ScienceInsider:
In a statement released this afternoon by the Home Office, which oversees the Border Agency, the department’s Chief Scientific Advisor Paul Wiles now says such evidence will be collected for later analysis of its potential but will not currently be used for individual case decisions.
As Daniel MacArthur points out at Genetic Future, while some of the initial outrage over the Border Agency’s policy may have been overstated, “the initial policy was still grossly premature” and the “Border Agency’s decision to take a step back and consider the implications before wading into the morass of genetic ancestry testing” is a welcome development.
Why the Errors of the Human Provenance Project Will Echo Beyond the U.K.’s Borders
ScienceInsider has posted several pieces this morning describing and critiquing the U.K. Border Agency’s Human Provenance pilot project:
Scientists are greeting with surprise and dismay a project to use DNA and isotope analysis of tissue from asylum seekers to evaluate their nationality and help decide who can enter the United Kingdom. “Horrifying,” “naïve,” and “flawed” are among the adjectives geneticists and isotope specialists have used to describe the “Human Provenance pilot project,” launched quietly in mid-September by the U.K. Border Agency. Their consensus: The project is not scientifically valid—or even sensible.
In addition to the feature article, ScienceInsider has also published a FAQ describing what is now known about the program as well as links to the underlying documents and expanded reactions from leading geneticists and isotope specialists.
The project is, as the name indicates, a pilot project, and one spokesperson described it as being “in its baby stages.” Still, as reported by ScienceInsider, the scientific community’s reaction to the program appears to be swift, unanimous and extraordinarily critical. Daniel MacArthur of Genetic Future has a slightly more measured take, expressing skepticism about the ability of the government agency to identify precisely an individual’s geographic ancestry based on genomic data and rightly pointing out that the “crucial issue is that it must be shown that the data are used in appropriate ways, and not given undue weight in making serious decisions about a person’s future.” That’s an issue that cannot be resolved until the Border Agency provides additional details on both its scientific methods and its utilization of the collected DNA and isotope data.
The near-uniform scientific skepticism that has greeted the announcement of the Human Provenance project suggests that we should not be surprised to see the pilot project substantially revised, or even scrapped altogether. But has damage already been done?
What Happens if a DTC Genomics Company Goes Belly Up?
The following post was originally published in three parts on September 14, 15 and 16 in Genetic Future.
Direct-to-consumer (DTC) genomics companies are not immune to the current recession. When TruGenetics, a new player in the DTC genomics space, announced in June that it would be handing out 10,000 free genome scans, both Genetic Future and the Genomics Law Report raised questions about the financial viability of its business model, particularly in the current economic climate. Sure enough, on August 21, TruGenetics announced that it had been unable to secure funding sufficient to support its business model as contemplated. Frequent readers know that TruGenetics is not the only DTC genomics company that is struggling. The financial struggles of deCODE Genetics have been well chronicled (see here, here and here) and even new market leader 23andMe has undergone a dramatic shift in its top management as it pursues a new round of financing.
Ultimately, it was a recent headline here at Genetic Future—“deCODE Genetics on the brink of insolvency”—that started us thinking: what would happen if an established DTC genomics company actually went bankrupt? More specifically, what would happen to the genomic (and other) data held by the company? Genomic data is likely to be the company’s most valuable asset. Can that data be sold off to help meet the company’s debts? Bankruptcy can be a confusing and arcane process, with real risks and uncertainties for companies, their creditors and their customers.
23andMe to Offer Discounts to Docs, But at What Cost?
Mark Henderson of the Times of London recently sat down to talk with Anne Wojcicki, now the sole remaining co-founder of DTC genomics company 23andMe, to discuss the company’s future plans. As Mark wrote in yesterday’s paper, Wojcicki and 23andMe are undertaking what appears to be a new strategy for the company, encouraging “doctors to take [23andMe’s] tests themselves so they are better placed to help patients who take it and then approach them for advice.” The Times and Wojcicki continue:
We want to help [doctors] to make sense of this, we want them to help consumers,” she said. “If you come in with results that tell you your risk of type 2 diabetes is marginally higher than average, how much do you need to worry about that?
Over at Genetic Future, Daniel MacArthur has the first reaction to this new development. Although MacArthur focuses primarily on the difficulty of using DTC genomic services—even at cut rate prices—to improve genomic literacy among overworked clinicians, a valid point, he also notes in passing that the announcement by Wojcicki and 23andMe represents “a subtle shift in…tone from the ‘we’re not doing medicine’ tone that has long characterised 23andMe’s attitude.” Whatever the business justifications for encouraging medical professionals to familiarize themselves with 23andMe’s services, the “subtle shift in tone” that MacArthur correctly identifies is what I consider to be the truly significant piece of news in Wojcicki and 23andMe’s announcement.
What Happens When a Personal Genomics Company Goes Bankrupt
The first and second installments of a three-part series of guest posts by GLR contributors Daniel Vorhaus and Lawrence Moore are up today at Daniel MacArthur’s excellent Genetic Future blog. In this series, we consider what would happen to all of the personal information provided by customers of a personal genomics company if the company went bankrupt. In part one of the series, posted yesterday, we considered the legal relationship between consumer and company and reviewed the privacy policies of TruGenetics and 23andMe. In part two, we get into the legal issues governing the consumer information under the bankruptcy laws. Tomorrow, in the final post in the series, we discuss what all this means for consumers of personal genomics companies.
