In Depth October 23, 2008, 5:00PM EST

What Gene Tests Can Really Tell You

(page 4 of 4)

Michael Nagle/New York Times/Redux

Geneticist Lennon says: Save yourself $1,000. Ask Aunt Clara what runs in the family Stephen Voss

Yet many scientists believe that unless Navigenics, 23andMe, and others can make the transition from SNP testing to more complete genome work and find a way to overcome the many complexities, they won't be able to go public or make money for their investors. Lennon's own history shows how biotech fads have foundered on the shoals of biology's complexity. He was chief scientific officer of a gene startup that soared and crashed, and CEO of a stem cell company that shut down when the science didn't pan out. "There's tremendous pressure on [biotech startups] from their investors for a fast return," he warns. "That creates a clear conflict and tension."

There are already signs of such strife in direct-to-consumer gene testing. In early September, 23andMe slashed the price of its test from $999 to $399. CEO Avey says the drop wasn't brought on by lower-than-expected demand: "We are very happy with the volume of customers." Instead, she says, the company is passing along reductions in the cost of the tests. Navigenics CEO Baker says she intends to hold to her $2,500 price point—at least for now. DeCODE's Stefansson says that his personal-genomics business, deCODEme, has started slowly, but says "sales are picking up gradually." Other startups haven't been able to afford to wait. In early October, Smart Genetics, a South Philadelphia company that tested for genes that could predict risks of Alzheimer's disease, closed up shop. As for Greg Lennon, he's still optimistic. "Trust me, someday your genome will be incredibly important for you to analyze. But today, for the average person, the test results can't live up to their slick marketing."

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Sequencing for Less

The true value of genetic information won't be realized until researchers and companies can read the entire genetic code. That's expensive today, but the cost is dropping fast, as Andrew Pollack describes in two stories in The New York Times. On Feb. 9, 2008, he chronicled the technological competition, focusing on an innovative approach from Pacific Biosciences. And on Oct. 6, Pollack zeroed in on how another company, Complete Genomics, hopes to lower the price to $5,000 per genome.

Read these stories at http://bx.businessweek.com/genetic-testing/reference

Join a debate about whether health insurers should pay for genetic tests.

Carey is a senior correspondent for BusinessWeek in Washington.

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