The Web search giant's investment in Navigenics is further proof it wants an early stake in direct-to-consumer genetic screening
Your DNA falls into the realm of "the world's information," and it seems that Google (GOOG), as part of its corporate mission, is making a play to organize that, too. The Internet giant received heavy press in 2007 when it invested at least $4.4 million (BusinessWeek.com, 11/29/07) in a genetic screening company, 23andMe, that was started by Anne Wojcicki, the wife of Google co-founder Sergey Brin, and her business partner.
Google's interest in DNA doesn't end there. It is also putting money into a second Silicon Valley DNA-screening startup, Navigenics. The company is also backed by star venture capital firm Kleiner, Perkins, Caufield & Byers. For a spit of saliva and $2,500, your genetic test results are securely delivered to your computer screen with your genetic likelihood for 18 medical conditions, from Alzheimer's to rheumatoid arthritis to several types of cancer. Navigenics aims to boost disease prevention by providing customers reports on their DNA that they can share with their doctors. The company addresses privacy concerns by encrypting customer identities, and screens only for conditions it deems to have scientifically sound genetic studies. The company also offers genetic counseling.
Much in the way it invested in 23andMe, Google wants to plant an early stake in a potentially large new market around genetic data. "We are interested in supporting companies and making investments in companies that [bolster] our mission statement, which is organizing the world's information and making it universally accessible and useful," Google spokesman Andrew Pederson says.
Size of Investment Not Disclosed
Calling 23andMe an example of a company "generating a whole new batch of information of interest to a broad range of people," Pederson says Google wants to extend its search capabilities into genetic testing. The precise path and business contours of the emerging gene-testing market remain unclear, but if Navigenics succeeds it "will generate a lot of a very new type of information with potentially far-reaching value," says Pederson. "We felt it was important to get involved now, at the early stage, to better understand the information generated by this fast-moving field."
If genetic screening proves popular, the nascent technology also stands to benefit Affymetrix (AFFX), which not only invested in Navigenics but also makes the GeneChip system used in the testing and runs the lab Navigenics uses to analyze customers' DNA. Other Affymetrix alumni hold key positions at both gene-testing startups: Sean George is chief operating officer and Stephen Moore is chief counsel at Navigenics; Linda Avey co-leads 23andMe. A former Affymetrix president, Sue Siegel, is also on Navigenics' board.
Google's interest in the company seems to be purely financial. Both Navigenics and Google refused to disclose the size of Google's investment. "While Google is a financial investor in Navigenics, they don't have access to our data; we do not serve ads," says Amy DuRoss, head of policy and business affairs at Redwood Shores (Calif.)-based Navigenics.
Harnessing Star Power in SoHo
Google's forays into gene-screening technologies "might say more about Google and its corporate governance and this particular niche of the biotechnology area than about Google as a company," says Scott Kessler, a Standard & Poor's equity analyst who covers Google. (S&P, like BusinessWeek, is owned by The McGraw-Hill Companies (MHP).) Brin and partner Larry Page "have interests far beyond the Internet search business and even the online media business."
The news of Google's investment comes as the genetics screening firm wraps up a nearly two-week product launch with panel discussions and a public storefront in Manhattan's chic SoHo section. Harnessing star power, big names in finance and politics—not to mention a little boost from an Internet powerhouse—Navigenics hopes its new Health Compass will become the breakthrough tool to usher in a new era of personalized, preventative health care.
"On all these new genetic breakthroughs there is always some resistance culturally," former Vice-President Al Gore, a new Kleiner Perkins partner, said Apr. 8 at a panel discussion Navigenics sponsored about the product's potential. "And then when there's an evaluation of the inherent value, if the ethics are right, if the surrounding culture is right, then it just breaks through. I think this company has it right." Gore is also a personal friend of the company's co-founder, Dr. David Agus, whom he called a "miracle worker," and Gore's former chief domestic adviser, Greg Simon, chairs Navigenics' policy and ethics task force.
A Who's Who of Venture Capitalists
Agus, director of the Spielberg Family Center for Applied Proteomics at Cedars-Sinai Medical Center in Los Angeles, treats Hollywood celebrities, Saudi royalty, and others with deep pockets, but he conceived the company as a way to avert costly diseases. He's hoping Navigenics will inspire a health-care revolution from the masses, by directly supplying vital information to consumers, who will in turn mobilize their doctors. "Going to the individual is how we're going to change doctors," Agus says, "and that's how we're going to change medicine and health-care costs et cetera— prevention of disease."
Since November, two other firms have offered consumers Web-based genetic tests. Mountain View (Calif.)-based 23andMe gives customers their raw genetic data so they can explore their ancestry, possible predisposition to diseases, or engage in social networking with other clients wishing to share their genetic profiles. And deCODE Genetics (DCGN), of Reykjavik, Iceland, tabulates genetic risk for 26 diseases and conditions, provides ancestry data, and lets users share the information with others. (A deCODE spokesman says Google doesn't own a stake in the company.)
A who's who of the venture-capital world is backing Navigenics. The startup completed its second round of funding in November, raising more than $25 million from Kleiner Perkins, Sequoia Capital, and Mohr Davidow Ventures. Mari Baker, a former "executive-in-residence" at Kleiner Perkins and ex-Intuit (INTU) executive, is Navigenics' CEO. MDV had also funded 23andMe but that relationship has ended. Other, individual investors include Scott Cook, a co-founder of Intuit, and Dr. Lubert Stryer, a 2006 National Medal of Science winner, an adviser to Affymetrix and professor emeritus of neurobiology at Stanford University. The school was also an early investor in Navigenics.
Mapping Out the Competition
Interestingly, Navigenics and 23andMe don't consider themselves competitors. Navigenics' DuRoss says "23andMe has taken the approach of providing you a fun, social, and ancestral look at your DNA," adding that her company "has taken the view that science, clinical utility, and the ability to do something about your health is of paramount importance."
Wojcicki, in an e-mail to BusinessWeek, said "23andMe looks at genetics holistically," adding, "Individuals want to understand the health component of their genetics, but they also want to explore their ancestry and compare themselves to other individuals. We work with an outstanding scientific advisory board [and] concluded…that the clinical utility of most of this information is still unknown. We hope that over time…we will have a better understanding of how this information should be used in a clinical setting."
For all its promise, the biggest hurdle to direct-to-consumer testing may be the medical community's resistance. The American College of Medical Genetics recommends that "a knowledgeable health-care professional be involved in the ordering of DNA-based genetic tests," President Joe Leigh Simpson said in an e-mail. "Just because a test exists does not mean it is right for everyone," he said. "Many of the new DNA tests assessing disease susceptibility can provide only a relative risk, not an absolute diagnosis."