SV Bio, Backed by Sequoia, Strives to Make Medical Genomics Simple

1/22/13Follow @xconomy

Physicians don’t usually learn much about genetics in medical school, but they increasingly need to know about it. That’s why Dietrich Stephan, the co-founder of Navigenics, is building a new company to give physicians clear and simple information about the genome so they can better tailor treatment to individual patients.

Foster City, CA-based SV Bio, a k a Silicon Valley Biosystems, got started in the summer of 2011 after a series of conversations between Stephan and the people at Sequoia Capital, the big-name high-tech venture firm. Now SV Bio is starting to talk publicly about its work. SV Bio says it has raised an undisclosed financing from Sequoia, and that it has struck a strategic partnership to provide genomic sequencing and interpretation services to the Mayo Clinic. Terms of the Mayo Clinic deal aren’t being disclosed.

But SV Bio has built a team of 20 employees, has set up two sequencing labs in the U.S. and one in Asia, and has been working out the kinks in its service with a group of six beta test groups at places like Sutter Health in California and Dignity Health in Arizona. The plan is to start commercializing the service this quarter, Stephan says.

SV Bio, along with InVitae, Caris Life Sciences, and Foundation Medicine, is one of the emerging players in the “clinical genomics” or “medical genomics” business. The concept is about scanning far-reaching areas of the genome—instead of just looking at one specific gene or small set of variants—in search for information that’s useful for patient care. About a decade after the first human genome sequence was completed, the coming age of the $1,000 genome has made it possible for physicians to start thinking about whether it’s practical to do broader sequencing runs for routine diagnostic purposes.

Dietrich Stephan, Founder and CEO of SV Bio

“We decided we weren’t going to build another DNA sequencing company. It’s a low-margin, commodity business,” says Stephan, the founder and CEO of SV Bio. There has already been significant progress in software that does basic tasks like finding gene variants, and in aligning a new patient’s genome with the original “reference” genome from the Human Genome Project, he says. The opportunity he saw was in a genome sequencing service that could spot the variants that are linked to clear symptoms of disease—an answer that physicians can work with.

“Everybody is backed up at that point,” Stephan says. “We decided to jump in and solve that problem: to simply, accurately and comprehensively move from variants in a genome to a clinical report that’s actionable.”

SV Bio’s vision is to create the network of labs that take samples, scan broad regions of the genome, interpret the data with software, and send the results back a few days later. Based on feedback from early users, SV has developed a standard 3-page report in which the first page offers the answer, the second page provides a reference in the scientific literature that supports the answer, and the third page offers quality control data on how the test was done, Stephan says.

“If you think about a physician’s life, they are busy, they often don’t know which genes to test for which disease,” Stephan says. “There are thousands of genetic tests. We decided ours has to be simple and easy to use. Our test is geared for any physician with zero knowledge of genetic testing, and allows them to unlock the value of it.”

The price for the service is initially being set in the “$5,000 to $6,000 range” for a scan of all the roughly 20,000 genes, although prices will be set on a sliding scale, based on how wide a scan the customer wants.

Eric Schadt, the director of the Institute for Genomics and Multiscale Biology at Mt. Sinai Medical Center in New York, said the new company has “the exact right vision.”

“I am not intimately familiar with SV Bio, but I know enough to know that they are aiming to solve one of the more pressing problems in genomics-based medicine, and that is how you take all of the data generated, all of the interpretations, and deliver it into the hands of physicians and patients in ways that impact their decision making for diagnosis and treatment,” Schadt says. “How to convey that complex information in a meaningful way is a key ingredient to achieving the precision medicine vision.”

SV Bio, from the start, has a different vision than Navigenics. That earlier company, along with its longtime competitor 23andMe, ran into resistance from some physicians who thought the “consumer genetics” movement was premature, because too little was known about correlations or causative links between certain gene abnormalities and disease. The tests also struggled to gain much  broad acceptance from consumers in the early days, partly because of the price. Navigenics ended up being sold last year for an undisclosed amount to Life Technologies.

Instead of marketing to consumers, SV Bio is taking aim at physicians, and it is attempting to show links between genes and disease that are on the most firma of scientific terra. So SV Bio is setting up its labs with the latest Illumina HiSeq machines, and tailoring them in the beginning with software to spot gene variations that are linked to rare, inherited disorders that are sometimes called Mendelian disorders.

SV Bio chose that area to go after first, because that’s where the underlying scientific data is strong, Stephan says. But that’s just the first step. Eventually, SV hopes to use its labs to be able to tell doctors whether variants in a patient’s genome raises his or her risk of suffering dangerous drug side effects; whether a patient is at risk of getting certain chronic diseases that involve multiple genes; what genes might be driving tumors in a given cancer patient; and what kind of immune profile a patient has to certain pathogens.

Accuracy is one big question many SV Bio customers are sure to have. The data produced on many regions of the genome isn’t sensitive enough to provide the kind of confidence physicians want when they make a diagnosis. For example, if someone wants to look for signs that a person has gene variants that raise the risk of colon cancer, today’s technology can provide about “70 percent sensitivity at best,” Stephan says. That means three out of 10 people with the mutation would go undiagnosed, and “they’ll get colon cancer and die,” Stephan says. While a scientist might get excited about an improvement in a marginal improvement in sensitivity, that still may not mean much to a physician treating a patient.

“Diagnostics is the real deal,” Stephan says. “In some cases you make life and death decisions on this information.” If a condition can only be spotted with, say, 70 percent sensitivity, then it’s not ready for diagnostic purposes, he says. “It’s not very good for business. Unless you fix it, [next-generation sequencing] will never be adopted in the clinical setting.”

Last year, physicians at major medical meetings like the American Society of Clinical Oncology and the American Society of Hematology started to show growing interest in genomics for their practices. This year, many companies will find out just how much demand exists in clinics for genomic information. Already, Stephan says SV Bio has more expressions of interest from physicians at its beta sites than it can currently process. But the push is on to build up capacity, and to go from a small group of early adopters to more mainstream use as quickly as this year.

“This year, our major goal is to prove with thought leaders such as the Mayo Clinic that they love our product, and that we will start to see market data that we’re penetrating outside the (key opinion leaders) to community-based physicians,” Stephan says. “Every case we unravel in our beta testing phase has led to several additional calls from physicians around the beta site saying, ‘how can I access this?’ I see a desperate need from physicians.”

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