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Genomics Thread #5
We've already laid the groundwork for understanding DNA, and some parts of the sequencing value chain but now let's talk about genetic testing...
We've already laid the groundwork for understanding DNA, and some parts of the sequencing value chain but now let's talk about genetic testing...
1/ You can think of genetic testing companies as platforms built on top of genome sequencing companies.
Some of the players here are 23andme, Ancestry, Invitae, Fulgent and Natera.
Interestingly, 23andme might come public via SPAC soon: https://www.bizjournals.com/sanjose/news/2021/01/28/richard-branson-spac-may-help-take-23andme-public.html
Some of the players here are 23andme, Ancestry, Invitae, Fulgent and Natera.
Interestingly, 23andme might come public via SPAC soon: https://www.bizjournals.com/sanjose/news/2021/01/28/richard-branson-spac-may-help-take-23andme-public.html
2/ Ancestry and 23andme are probably the most popular DTC genetic testing companies. You receive a test kit, swab your cheek and then you can get insights into your familial history, etc.
However, the DTC market has been more difficult than servicing health care providers.
However, the DTC market has been more difficult than servicing health care providers.
3/ There are a few reasons for this but one is insurance.
23andme & Ancestry aren't medical genetic tests. It's a fun thing to find out but once everyone has done it, there is a limited runway.
However, companies like Invitae provides tests that are covered by insurance.
23andme & Ancestry aren't medical genetic tests. It's a fun thing to find out but once everyone has done it, there is a limited runway.
However, companies like Invitae provides tests that are covered by insurance.
4/ This is because they are medical genetic tests.
The value chain goes like this...
1) An OBGYN prescribes a pre-natal DNA test for a pregnant mother.
2) $NVTA utilizes sequencing technology in its labs
3) $NVTA sends the results back to the doctor
4) Insurance pays $NVTA
The value chain goes like this...
1) An OBGYN prescribes a pre-natal DNA test for a pregnant mother.
2) $NVTA utilizes sequencing technology in its labs
3) $NVTA sends the results back to the doctor
4) Insurance pays $NVTA
5/ So $NVTA sits as a connection point between doctors as well as biopharma companies that are doing clinical trials and need rapid genetic testing (to be thorough, $NVTA does have a DTC offering as well).
But the company uses different sequencers depending on the need.
But the company uses different sequencers depending on the need.
6/ So for a liquid biopsy test, they may use a SRS machine made by Illumina but for a more complex clinical trial maybe they use a SMRT PacBio sequencer.
Basically, genetic testing companies can bring down the cost of these tests thru volume but also create a network of partners
Basically, genetic testing companies can bring down the cost of these tests thru volume but also create a network of partners
7/ What's interesting is that these companies fill a gap.
Healthcare/biopharma have enough to worry about without running their own labs (though big ones can).
And sequencing companies are focused on creating better tech rather than interfacing with patients and doctors.
Healthcare/biopharma have enough to worry about without running their own labs (though big ones can).
And sequencing companies are focused on creating better tech rather than interfacing with patients and doctors.
8/ Another important thing to note is that these companies can be platform agnostic. They can use the best tools and benefits from the cost curve declines (no pricing power b/c of this).
Invitae has done a lot of acquisitions to broaden its capabilities.
Invitae has done a lot of acquisitions to broaden its capabilities.
9/ For instance, it bought ArcherDx in October for $1.4 billion ($325 million + quite a few shares of stock) to get into the liquid biopsy space.
This is a huge space and incredibly important.
We will talk about liquid biopsies in the next thread!
This is a huge space and incredibly important.
We will talk about liquid biopsies in the next thread!
10/ Genetic testing companies like Invitae and Fulgent also benefit from a growing library of genetic data.
Obviously, this brings privacy concerns but there is real potential to share genetic insights to move cancer research forward.
Obviously, this brings privacy concerns but there is real potential to share genetic insights to move cancer research forward.
End/ Fulgent has done A LOT of COVID tests so it goes to show how nimble these companies can be.
Once they see a trend, they can either buy the tech to broaden their scope or focus more resources on it.
That's what we're seeing with liquid biopsy.
Once they see a trend, they can either buy the tech to broaden their scope or focus more resources on it.
That's what we're seeing with liquid biopsy.
