The first company to offer whole genome sequencing for free can build the most valuable advertising engine in the world.
DNA test kits are popular these days. They are top sellers on Black Friday and Amazon Prime Day. Over 12 million people have paid companies like Ancestry.com and 23andMe to take a peek at their genetic code.
But most DNA tests are low-resolution scans, delivering a hodgepodge of correlations about ancestry, lifestyle, or disease risk. They aren’t very useful to your doctor, to researchers, or probably even to you.
Clinical decisions or research typically requires more comprehensive sequencing, ideally whole-genome sequencing (WGS), and sophisticated analysis. WGS is more expensive and the results are too complex for most people to understand. But professionals can’t get enough of the stuff. If data is the new oil, complete genomes are sweet Texas crude.
Complete genomes help researchers determine what genetic code does what. Correlating the code to human traits or behaviors can advance basic research and lead to new diagnostic services and personalized new drugs. Paired with your “second genome” — genomes of the microbes in and on your body — it can be used to develop a wide range of consumer products, too, like soaps, makeup, lotions, meal plans, on and on. Companies with your genome and other information in their databases will know a lot about you and be able to match you to a growing array of genome-linked products and services.
Matching you with a universe of products and services: if that sounds to you a lot like the enviable position that Google sits in, you’d be right. So the question is: who will be the Google of whole genome sequencing? Who is going to turn today’s DNA testing business from one in which people pay for a mediocre product to one in which people get something that is free and yet vastly more valuable to them?.
Snowball effect
When you pay $79 or so for a spit test from DNA testing companies, read the fine print. They typically request or demand the right to continue to use your genetic material, and any other information you’ve shared, in any way they like. That’s because this is their real business: reselling your DNA, often to pharmaceutical companies. In 2015, Genentech made a $60 million deal with 23ndMe. In June, GlaxoSmithKline announced a $300 million investment in the company and said they would collaborate to develop new medicines.
Within five years, there was a good chance that a group offering free genomes would have a million members in its database.
When you get one of these DNA tests, you’ve traded an intensely personal, incredibly valuable asset — literally the code that runs your body and makes your children — for a few informational baubles. Unless you go with a company that will pay you if it shares your data, you won’t see a penny from any further sale of your information or DNA. You won’t get royalties or discounts on any drugs or other products that may be developed. With a click or two, you’ve not only signed away your rights to be compensated, you’ve paid for the privilege.
But a new crop of what I’ll call second-generation (2G) DNA testing companies are starting to radically change all this. They are powered by the plummeting cost of whole genome sequencing, which very well could drop below $200 in the next year or so, plus cheap computing to store and crunch all that data, and new platform technologies like blockchains.
2G companies, including Luna DNA, Nebula Genomics, and EncrypGen, aren’t so much about DNA testing as they about are creating a place where people can connect and transact — a network of genomic data and related information. Their competitive advantage is a fresh business model. Rather than take your DNA and cut you out, they want to help you manage it and get you a fair share. Instead of becoming the product when you send off your spit kit, you become a stakeholder in their genomic community. You retain ownership and control of your DNA. And no matter whether you get paid in digital tokens or in cash, the idea is the same: You’re able to share in the value created by your data.
There’s a powerful snowball effect with networks. Completeness matters, which is why, for 2G companies, it’s pretty much whole genomes or nothing. But so does size. The bigger a genomic network becomes, the more likely it is that correlations previously impossible to detect will be uncovered, and the more people and groups will sign on to mine the information for gold.
Genomic marketplaces are already attracting partners interested in paying for access to your DNA sequences and related information, with your consent. If you meet their criteria, they could even foot the bill to sequence you. It’s just a matter of matching you with the right payers, be they pharmaceutical companies, health management groups, or insurance companies. DNA can match patients to the best treatments, or save hundreds of thousands, even millions of dollars, by diagnosing diseases early. Meanwhile, whole genome sequencing can be cheaper than what insurance companies currently pay for a single-gene DNA diagnostic test, like BRCA1 for breast cancer. Expect to see 2G companies sign deals that could bring in millions of members at a time.
But the marketplace will really thrive when 2G DNA companies eventually tap into the wellspring of dollars that today supports the Web: advertising. Genomic networks could become the richest source of detailed, opted-in data ever collected for targeted advertising. As more gene-linked products and services appear, these marketplaces should diversify beyond health and medicine, and the revenues flowing through them should explode. And you’ll get your cut.
By eliminating the up-front cost of testing, 2G DNA testing companies could give everyone, everywhere, the opportunity to enter the genomic age. Signing up should be as easy getting a Facebook or Gmail account — no credit card required. This will be the biggest thing to ever happen in DNA testing — a once-in-a-lifetime economic inflection point that should see genomic networks mushroom in size and catch many people off guard. And it will supercharge biomedical research by unlocking a vast new data set about humanity.
Dominance
For the average person, 2G DNA testing will be an unexpected windfall. We already share our related digital droppings without getting very much in return. But mix in our DNA and suddenly this data can be a lot more valuable to us and to others. This said, you will want to sign up with the network that looks to become the biggest, because their information will be in the most demand, and their tokens or cash payouts should become the most valuable.
And that means that if history is any guide, chances are there will only be one Google of genomics. Network effects will generate a winner-take-all dynamic like the one that has shaped the search and social media markets. The competition for dominance will be fierce.
Network effects will generate a winner-take-all dynamic like the one that has shaped the search and social media markets.
The payoff is huge. Think about how Facebook is worth about $500 billion and has 1.5 billion daily active users. Each person is worth about $350. Advertisers trying to reach them give Facebook an average monthly revenue of almost $9 per person in the US and Canada. It’s very possible these figures would be significantly higher in a genomic network, given that its data can be used to inform crucial medical, health, and family decisions. Combined with the falling cost of sequencing, it’s economically realistic for a billion human genomes to come online over the next decade or two.
I’d bet on it — and in fact I have.
Last year, I was in Seattle at the Sage Assembly, an open innovation conference. Genetic scientists were sharing some of the challenges of working with siloed DNA databases that different groups maintain around the world. The scientists had to send their own software to the various databases, process the information, and then collate the results — a frustrating, inefficient process.
I was speaking with Gary Wolf, a co-founder of the Quantified Self movement, and noted that the falling cost of DNA suggested to me that some group would soon offer sequencing for free, creating a massive, unified database that would be easier to analyze. I told him that within five years, there was a good chance that a group offering free genomes would have a million members in its database. Gary said, “Andrew, you’re crazy.” (I hear this a lot.)
So we bet $1,000 on it, with the winnings going to charity.
He is so going to lose.
Source: https://neo.life/201...le-of-genomics/
