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Life Health > Health Insurance > Health Insurance

Health Market Chills Gene Testing Firms

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Genetic-testing startups are finding that selling consumers insights on their risk of getting cancer may not be as easy as telling them about their Irish roots.

23andMe Inc. and LLC have capitalized on the public’s insatiable appetite for discovering their family trees. However, consumers have balked at paying other companies for health analysis of their DNA. Some testing firms are finding it works better when health care providers are more directly involved. That way patients are better able to understand test results and integrate them into their care.

(Related: DNA Holds the Key to What Financial Consumers Want)

Helix, which launched in 2015 with $100 million from genome-sequencing giant Illumina Inc., had planned to sell tests directly through an “app store’’ for DNA. Instead, it’s now looking to partner with health care providers. Illumina said on April 25 that it would no longer hold equity or participate on Helix’s board, ending the partnership.

Color Genomics has also changed course. It began by offering doctor-prescribed tests to consumers, but in January it said it would shift focus to partnerships that incorporate genetic testing into primary care for large numbers of patients. And recently 23andMe has drawn criticism for cancer tests that critics say can mislead consumers without a professional’s input.

“It works really, really well when your partner can directly provide the follow-on care that people need, because that’s what people are looking for,” said Justin Kao, a co-founder of Helix and senior vice president of business development and partnerships. “They want to know how to take their information and take action on it. That caused us to rethink some things.’’

When Helix rolled out its “app store’’ in 2017, the idea was that customers would pay Helix to sequence their DNA. They would then purchase DNA apps from other companies selling products on the Helix platform, depending on whether they were curious about ancestry or health, or perhaps in the market for custom socks printed with their own genetic code. In addition to Illumina, investors included the venture capital firms Kleiner Perkins, Warburg Pincus and DFJ Growth.

Changing Course

But now Helix is shifting gears. It deemed a partnership last year with the Healthy Nevada Project to sequence DNA of state residents so successful that it announced a similar deal with AdventHealth in Florida last month. In both arrangements, Helix sequences DNA and screens for specific genetic conditions, then passes that information along to its health care partners, which follow up with patients. For Helix, the arrangements give it access to large pools of customers in one fell swoop.

Color Genomics has also moved toward selling its services to companies that offer health care to large numbers of people. In January, it inked a deal with NorthShore University HealthSystem in the Chicago area to offer its kits to more than 10,000 patients. It also sells its services to several employers, which offer DNA testing as a benefit alongside insurance.

Color, which requires a doctor’s prescription and has always offered genetic counseling alongside test results, said the shift has been mostly about reaching larger numbers of patients in order to make precision medicine widely available. At the same time, it stopped its focus on recruiting individual patients to order tests through its website.

“The economics work more as part of care delivery,” said Chief Executive Officer Othman Laraki.

Recently, 23andMe has demonstrated the peril of offering nuanced and complicated health information directly to consumers. Critics argue that its tests for breast cancer could mislead people about their health. Because 23andMe tests only for a few of the many harmful genetic mutations to the BRCA genes associated with breast-cancer risk, one recent study by a competitor found nearly 90% of participants who carried a BRCA mutation would have been missed by 23andMe’s test.

23andMe said it makes clear to customers that it tests for only three of thousands of possible genetic variants, ones that have a documented risk for breast and ovarian cancer. The company said it also urges customers not to forgo additional testing.

Helix said its consumer marketplace won’t totally disappear. But for now, the focus is on partnering with providers, with more deals in the works, Kao said.

“As a startup, I think you have to you have to react when you hit on something,’’ said Kao. “No health system is going to sit there and become a genetics expert. That’s not their job. And we said we think we have something there.’’

Stephen Montgomery, a geneticist at Stanford University who criticized Helix when it launched, said the pivot seemed like a good idea. For most people, he said, the health information delivered by consumer genomics companies just doesn’t seem that useful. The biggest DNA testing company, Ancestry, doesn’t offer health testing at all.

“It’s not precise enough to be able to be actionable for most people,’’ said Montgomery. “The best way to deliver that information to people is partnership with clinicians who know how to use it.’’

— Read Share Your DNA, Get Shares, on ThinkAdvisor.

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