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The Business of Genomics The Business of Genomics

More than 50 years after the discovery of the double helix, its profit potential remains unrealized. See All Video & Multimedia

Predicting Your Future Predicting Your Future

What you might learn about yourself from new genetic data. See All Video & Multimedia
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The startup’s buzz comes from its close association with Google. The co-founder of 23andMe is a 34-year-old former biotech investor named Anne Wojcicki, who is married to Google co-founder Sergey Brin. Wojcicki met Brin when her sister rented her Menlo Park, California, garage to Brin and Google co-founder Larry Page as their first office. Wojcicki’s father, Stanley, is a physics professor at Stanford University, and she has a degree in biology from Yale University. Before 23andMe, she worked as an investor at a San Francisco hedge fund, Passport Capital. In 2006, she joined Linda Avey, a 47-year-old business-development expert with extensive experience with major gene-technology companies, to form 23andMe. In May, Google invested $3.9 million in the tiny startup, part of $10 million raised in a recent round of private funding, according to VentureBeat, an online news site covering Silicon Valley. This influx of capital reportedly allowed the company to pay back a $2.6 million personal loan from Brin. Other investors include Genentech, the Menlo Park venture capital firm Mohr Davidow Ventures, and New Enterprise Associates.

Brin has said that he wants to unleash Google’s search technology to make sense of genomics, which so far has yielded rafts of genes and studies that have yet to be well organized. Google has offered few details, and its representatives declined to comment for this article, but biotechies eager for a fusion of stodgy life science with hip I.T.—dare I call it Web 3.0?—are closely watching 23andMe as a possible vehicle for Brin’s vision. Other contenders include Navigenics, a startup planning to launch early next year; DNA Direct, which already offers individual gene tests online; and DeCode Genetics, which conducts original research and is developing new drugs.

In 1998, famed geneticist Craig Venter stood in front of a crowd and held up a credit card with his picture on it. In five years, he said, everyone would have a card like this. A magnetic strip on each card would contain all a person’s DNA information.

In those heady days, his prediction seemed believable. The Human Genome Project, a government-funded program to map and analyze all the genes of human beings, was nearing completion—with a privately funded effort led by Venter in hot pursuit—and the promise of personalized medicine was fueling a boom in genomics companies. Unlike 23andMe’s effort to sell tests and information about one’s genes online, the companies of a decade ago were trying to develop personalized drugs. Big Pharma invested heavily, startups raised billions of dollars, and stock prices soared.

In 2003, five years after Venter’s forecast, genomics had scored few successes, personalized medicine still had not yet arrived, and the genomics bubble had burst. What happened? Companies discovered that the science of linking one’s own genetics to new drug compounds was far more complex and expensive than originally anticipated. In 2002, Venter was ousted from his company, Celera (he says he quit), which reorganized itself into a more traditional diagnostics business.

While commercial genetics struggled, the science of gene identification exploded. Researchers using ever more powerful sequencers and computers feverishly combed through the 3 billion nucleotides of the human genome—all those A’s, C’s, G’s, and T’s. Geneticists have now strongly linked nearly 2,000 genes to highly heritable rare diseases by combining genetics and computers in a science called bioinformatics. About 50 have been strongly linked to more common diseases, says Francis Collins, but the science is moving so fast he expects that number to increase to 500 by 2009. Every few days, new genes are discovered and linked to diseases, everything from male pattern baldness to schizophrenia. “A Moore’s law for bioinformatics is under way,” says Randy Scott, C.E.O. of a diagnostics company named Genomic Health. Moore’s law is the axiom that computing power doubles every 18 months. “Like mainframes to personal computers, this is an unstoppable force.”

A few meaningful genetic tests are now commercially available. For instance, thousands of women a year are tested for variants of two genes associated with breast cancer, BRCA1 and BRCA2, at a cost of between $300 and $3,000 per test. Breast-cancer patients are tested for a variation of the HER2 gene to see if they might benefit from Genentech’s anticancer drug Herceptin. The Oncotype DX test from Genomic Health analyzes 21 genes and uses a mathematical equation to assess the likelihood of cancer recurrence and to assess treatment options. Roche Diagnostics manufactures DNA tests that identify patients who might suffer from the side effects of antidepressants; sales of such tests are expected to reach $1 billion in a few years. This summer, the Food and Drug Administration recommended that patients take a genetic test before being prescribed warfarin, a blood thinner that can cause dangerous clots or excessive bleeding. Thousands of pregnant women a year also have their fetuses tested for rare genetic disorders such as Tay-Sachs disease.

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