Knome Challenged to Keep in Step with Falling Genetic Sequencing Prices

1/20/10

Knome, the personal genomics startup co-founded by leading Harvard geneticist George Church, is navigating rapid change in its business. The Cambridge, MA-based launched in 2007 to make whole-genome sequencing and analysis a personal luxury item rather than just a marvel of modern science, but now it’s facing more competition on the sequencing side of its business and a dramatic decline in fees for its bread-and-butter consumer services.

About two years ago the startup announced that it was charging its first three wealthy customers $350,000 to sequence their entire genomes and then have its scientists interpret and analyze the data for each person. A year or so ago the firm dropped the price for that service to around $100,000, due in large part to a sharp decrease in the cost of sequencing. Last June, that price was then dropped again, to $68,500, where it has stayed, says Jorge Conde, the firm’s co-founder and CEO.

If you had your entire genome sequenced just five years ago, you might have been considered a pioneer on par with the first handful of astronauts who ventured into outer space. But there have since been a series of technological advances in tools used to map DNA, innovations that have brought down the price of whole genome sequencing from about $1 million dollars per genome a few years ago to less than $5,000 today.

Conde says the falling costs of genomic sequencing are a positive development for human health and science. He’s even confident that the lower costs of sequencing opens up a much larger market for Knome than possible at its original $350,000 price tag. Still, the company operated profitably in its early days when its small staff of around five full-time employees served clients who paid six figures for their services. Today, the company is trying to find a way to get back in the black with a larger staff of closer to 20 people and a premium service that costs the same as a fancy Mercedes rather than a nice condo near Kendall Square.

“I think the biggest challenge for us has been in clearly communicating the difference between sequencing and interpretation,” Conde says. He adds that while the price of whole-genome sequencing has fallen sharply, the costs of employing teams of scientists to interpret the data have not decreased nearly as much. The firm is spending more money today on salaries, given that its staff is larger than it was two years ago.

Conde says that the greatest value that his firm brings customers is in the analysis and interpretation of genomic data, for which it employs geneticists, bioinformatics experts, and clinicians. (Indeed, co-founder Church, in addition to heading the non-profit Personal Genome Project, stays involved in the business as a chief scientific advisor.) The actual genomic sequencing is handled by the startup’s partners at the Beijing Genomics Institute in China and SeqWright, a genomic analysis lab in Houston, TX. Indeed, plain genomic sequencing has become a commodity business, with firms such as Mountain View, CA-based startup Complete Genomics advertising whole genome sequencing for less than $5,000 per genome.

Fairly or unfairly, Knome is also often compared with the personal genomic analysis services of firms such as Foster City, CA-based Navigenics, and Silicon Valley startup 23andMe, which was started by a team that includes Google co-founder Sergey Brin’s wife, Anne Wojcicki. Both firms offer DNA tests, not sequencing, for $1,000 or less to tell people whether they have genes for certain diseases. 23andMe also gives customers clues about their ethnic roots based on the genes detected in the firm’s genotyping service. (Rather than sequencing a person’s genome to uncover all the genes in their DNA, those firms get a person’s DNA from their saliva and use test chips to find out whether the person has certain genes for diseases related to diseases or heredity. Conde notes that such DNA tests don’t uncover many genes or variants that give people a more complete picture of their genetic makeup, making it difficult to predict whether a person is at risk of developing, say, heart disease.

Even for those who do get their entire genome sequenced, there are limits to what scientists can tell them about the data because there are vast regions of the genome that are not yet fully understood. But that is expected to change as the U.S. government’s investment in genetic research leads to new discoveries about what the reams of genetic data really mean for human health. The National Human Genome Research Institute, a division of the NIH, received a windfall of … Next Page »

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