Organizing the Company – Choice of Entity

Bench to Market (article)In the first installments of the Bench to Market series, we discussed how to secure and protect intellectual property rights to technology that will be central to the venture. Once the entrepreneur is confident these rights are secure, it is time to form the legal entity that will carry on the business of developing the new technology. It is generally a good idea to create a company early in the process to avoid the necessity of assigning contracts and taking other legal steps that might be required if legal arrangements are made initially in the names of individual entrepreneurs.

It is also important to conduct all business related to the new technology through a company structure so that there is no confusion about who is responsible for the company’s obligations. If a corporation, partnership, or LLC is formed, capitalized, and operated properly, the new legal entity constitutes a separate and distinct “person” for all purposes under the law, and the company, as opposed to the entrepreneur who forms it, will be liable for the debts and obligations of the business. While this is not true in all situations (for example where the owner has personally guaranteed a debt of the company or where the owners have failed to provide appropriate capitalization), the “limited liability” that a separate legal entity provides can and often does prove to be crucial.

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Filed under Badges, Bench to Market

Weekly Twitter Roundup

Each week there are a number of stories and developments that, for one reason or another, don’t find their way into a full-length posting on the Genomics Law Report. Here’s a recap of what I was Tweeting this week @genomicslawyer:

Filed under General Interest, Industry News

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.


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Filed under Direct-to-Consumer Services, Genetic Testing/Screening, Genomic Sequencing, Industry News, Legal & Regulatory

Pre-implantation Genetic Screening: Socioeconomic Stratification and Equality of Opportunity

What ELSI is new (article)This commentary in the Genomics Law Report’s ongoing series What ELSI is New? is contributed by Austin Alexander, Siftgen, Inc.

As the era of personal genomics comes of age, genomic information will play an increasingly important role not only in medical decisions but also in reproductive decisions. Already, preimplantation genetic screening (“PGS”, also referred to as preimplantation genetic diagnosis or “PGD”) is being used to screen embryos prior to implantation to select those without known genetic diseases such as cystic fibrosis and Huntington’s disease. As the understanding of the genetic contribution to diseases and traits increases, and as the cost of full genome sequencing decreases, it will become feasible to use PGS to target the full spectrum of genetic diseases.
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Filed under Badges, What ELSI is New?

Welcoming GINA into the Workplace

The most recent layer of federal antidiscrimination law took effect this past weekend – to the ADA, Title VII, FMLA and other federal and state laws, employers can add another: the Genetic Information Nondiscrimination Act. Title I of this new law (called GINA) took effect in May 2009, prohibiting health insurers and group plans from using genetic information to deny coverage or set payment rates. Title II now joins the fray, and with it brings prohibitions that make their way into almost every workplace. Under Title II, an employer may not “discriminate against any employee with respect to the compensation, terms, conditions, or privileges of employment … because of genetic information.”

While a long time in the making (13 years of (often procedural) debate), in the end, there was little argument in Congress that this law was needed – the Senate approved it unanimously, and the House of Representatives had only one vote against it. As early as January 2001, the Council for Responsible Genetics claimed hundreds of documented cases of genetic discrimination and/or fear of genetic discrimination in its Genetic Discrimination: Position Paper (pdf). In a 2007 survey (pdf), the Genetics and Public Policy Center found that 92% of participants expressed concerns that a genetic test could be used in harmful ways against a person. Last summer, we reported on Major League Baseball’s genetic testing to verify the reported ages of certain Latin American prospects. This past month, the University of Akron made headlines over a new policy requiring job applicants to turn over DNA samples, and in the process energized the Ohio chapter of the ACLU.

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Filed under Badges, Genetic Testing/Screening, Genomic Policymaking, Genomics & Society, GINA, Legal & Regulatory, Pending Regulation

Does a genomics that does not work for some mean a genomics that will not work for all?

What ELSI is new (article)This commentary in the Genomics Law Report’s ongoing series What ELSI is New? is contributed by Jenny Reardon, Department of Sociology and Center of Biomolecular Science and Engineering at UC Santa Cruz, and Stephanie M. Fullerton, Department of Bioethics and Humanities at the University of Washington.

The future promise of personalized medicine rests precariously on the care with which we pursue genomic research in the current moment. While a focus on legal protections and open access are important, we must also attend to fundamental questions about the constitution of human diversity at the genomic and social level.

This is clearly evident in the recent collision of open source genomics with privacy rights. While calls for unfettered data sharing have formed the ground for much biomedical research, the achievement of a genomic commons may create its own kind of blockages. For example, although it is finally against the law to use genomic information to discriminate in healthcare or employment, the Genetic Information Non-Discrimination Act does not protect against misuses related to long term care coverage, life insurance, membership in federally-recognized groups, or immigration. For these and related reasons many people remain wary of involvement in genomic research. “Open access,” in other words, may inadvertently close the door for many.
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Filed under Badges, What ELSI is New?

Weekly Twitter Roundup: Personalized Medicine Edition

Each week there are a number of stories and developments that, for one reason or another, don’t find their way into a full-length posting on the Genomics Law Report. In addition, this past week I attended the Partners Healthcare conference on Personalized Medicine, and provided live updates from a number of the sessions. So, this version of the weekly Twitter roundup comes in two sections: the regular roundup followed by my Tweets from the conference.

Part I: A recap of the standard @genomicslawyer Tweets:

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Filed under General Interest, Industry News

deCODE Declares. Now What?

BankruptcyIf 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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Filed under Direct-to-Consumer Services, General Interest, Genetic Testing/Screening, Industry News, International News, Legal & Regulatory, Uncategorized

How should we deal with the arrival of very common prenatal testing for a broad set of genetic characteristics?

What ELSI is new (article)This commentary in the Genomics Law Report’s ongoing series What ELSI is New? is contributed by Hank Greely, Stanford University.

Each year, about 60,000 pregnant women undergo prenatal genetic testing in the United States, out of more than 4.2 million live births. Within five years, new testing methods, made possible by the rise of cheap forms of genomic analysis, will be able to test cell-free fetal DNA from the pregnant woman’s blood. These tests, feasible as early as the fifth week of pregnancy, will require a simple 10 milliliter blood draw, avoiding the invasive procedures of amniocentesis or chorionic villi sampling, with their attendant high costs, discomfort, and miscarriage risks.
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Filed under Badges, What ELSI is New?

23andMe’s New Game Plan: What it Means for the Company and for DTC Genetic Testing

Crossing out Plan A and writing Plan B on a blackboard.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:

Filed under Direct-to-Consumer Services, Genetic Testing/Screening, Industry News, Legal & Regulatory