Unlocking the Human Genome

By Russ Banham

It's one thing to invent a technology that allows us to analyze the very fiber of human existence. It's quite another to meaningfully interpret the data produced by this technology. Such is the challenge currently confronting the medical community around sequencing human genomes.

A genome sequence is the long, ordered string of connected molecules, called nucleotides (or bases), that form the basic units of nucleic acids, which are themselves the cornerstones of life. Genome sequencing determines the chemical makeup of each of those DNA nucleotides and their respective order along the string of an organism's DNA. Each of those nucleotides is assigned a letter—A for adenine, C for cytosine, G for guanine, and T for thymine—that refers to its structural components. The human genome is comprised of more than 3 billion of these genetic letters. Today you can plunk down $7,000 to have your entire genome sequenced, and gain a wide range of data about possible health risks like cancer or diabetes.

According to estimates, about 100,000 people have paid to have their genome sequenced. Dr. Arthur Beaudet, Professor and Chairman of the Department of Molecular and Human Genetics at Baylor College of Medicine, estimates that about 90 people turn up at his office to unlock their genetic mysteries each month.

The opportunity for average individuals to have their genomes sequenced is thanks to the rapid rise of Next-Generation Sequencing, or NGS, which not only delivers genetic data at lightning speed but also gives us a much more complete picture than before. While early sequencing technology used tools like X-rays, dyes, and heating methods, NGS technologies use semiconductor-based and electronic-detection methods, among others, and companies are continually experimenting with new possibilities. "We really don't have the Apple iPhone or iPad yet—the NGS technology that completely alters the paradigm—but what has been accomplished to date and in such a short time is truly extraordinary," says Ryan Phelan, the founder and former CEO of DNA Direct, a provider of genetic testing services (now part of Express Scripts).

The Promise—and Challenges—of Genetic Sequencing

While NGS has radically altered our ability to peer into human DNA, we don't always understand the importance of what we find. Genetic variance—the change in the chemical structure of a gene caused by mutation—can mean many different things. "A variant is any change in a common gene sequence," explains Dr. Beaudet. "It could be inherited or new…. It could be benign or could be disease causing. We just don't know."

That said, we do know the significance of some mutations. Of the roughly six billion genes in a person's genome, three to four million genes are variant. "Of those, less than a dozen are ‘actionable' genes," explains Dr. Ned Calonge, the former chair of the United States Preventive Services Task Force, and a member of the Centers for Disease Control and Prevention's (CDC) Task Force on Community Preventive Services. "In other words, if we knew ahead of time about these genes we could intervene based on this knowledge and make a difference in a person's health outcome."

A dozen genes out of six billion might seem like searching for a needle in a haystack. And in some cases that's only the beginning. A single gene can have multiple mutations, or in the case of the one that triggers cystic fibrosis, for example, 1,800 mutations. We often don't yet know which mutations are meaningful.

"We have these genes mapped out for Alzheimer's, and breast and colorectal cancer," says Dr. Calonge, "but now we are seeing with Next-Generation Sequencing technologies all sorts of new, undocumented variances." He adds: "It might mean something or it might mean nothing. What does a family physician do with this information?"

Dr. Calonge offered the example of a woman who has her genome sequenced and learns she has a genetic variation brought about by mutation that is associated with breast cancer. The woman opts for prophylactic surgery, even though she might never develop cancer. "The significance of the genetic variation is the question, and it's a tough one to answer," he says. "We really have to be prepared to think about this as doctors and as a society."

Important Ethical Questions

As technology for sequencing genomes becomes more prevalent, challenging ethical issues are surfacing around areas such as: genomic sequencing of unborn children, sequencing of prospective mates for inherited disorders such as cystic fibrosis and Tay Sachs, and in vitro testing and selection of eggs for women susceptible to the inherited BRCA gene mutation (these women face a much higher risk of developing breast and ovarian cancer compared with the general population).

Another ethical issue that doctors—and we ourselves—may face one day surrounds whether knowing the information contained in an individual's genomic sequencing could do more harm than good. While the speed, accuracy, and cost of sequencing should only continue to improve, the likelihood that individuals could be positively diagnosed with untreatable future diseases could become much more prevalent. And there is no way to put that genie back in the bottle once it is out. "You may learn that a particular therapeutic treatment for a disease will not work for you" says Phelan, who serves on the Board of Directors of the Personal Genome Project, which aims to sequence the complete genomes and medical records of 100,000 volunteers to enable research into personalized medicine.

Despite these concerns, at least four companies already have created tests that allow us to pinpoint possible genetic mutations—Sequenom, Ariosa Diagnostics, Verinata Health, and Natera—and there will surely be others that follow in their path.

The Business of Genetic Sequencing

As for full genome sequencing, there are a number of companies that currently provide the service, including Illumina, Ion Torrent (now owned by Life Technologies), Complete Genomics, private equity-backed Pacific Biosciences, and Oxford Nanopore Technologies. Competition and technological improvements have led to rapidly falling prices. "The original sequencing of the human genome in the Human Genome Project, in 2003, cost upwards of $3 billion," Dr. Beaudet notes. "We're now charging $7,000 to do it, and expect to see this fall to $2,000 to $3,000 before much longer."

The chief objective for each of these companies is to improve the detection of genetic mutations, and to do it as fast and inexpensively as possible—one letter of the genome at a time. The business model is built on the notion that lower costs will spur demand.

"Most companies are using lasers to detect abnormalities, but the next frontier is purely electronic," explains Dr. Jeff Schloss, program director for technology development at the National Human Genome Research Institute, part of the National Institutes of Health. "By interpreting the electrical signal when a DNA molecule passes through a nanopore—a tiny hole that the DNA strand threads its way through—you can detect changes in the flow of ions to determine possible mutations. It's a beautiful concept, but has been hard to implement."

Introducing such disruptive technology is how the current providers compete. "One company's cutting edge technology can easily and quickly make another's outdated," Dr. Beaudet says. "There has been this continuous flow of dramatic improvements over the last decade, and user labs like ourselves are constantly switching to the most cost-effective and best technology."

Phelan predicts the market will consolidate over time. She also expects to see widespread use of sequencing technology on a Software-as-a-Service (or SaaS) basis, in which researchers would access sequencing data via a portal and not need to own their own equipment. "Why should a medical center buy a $250,000 sequencing machine and upgrade and maintain this technology, when it can do it all in the cloud at much cheaper upfront costs?" she says. "Every medical center will soon be thinking long and hard before they bet on the latest machines."

Determining Action Based on Results

In the meantime, physicians are seeking ways to communicate the findings of genomic sequencing to patients. Dr. Lawrence Brody, chief and senior investigator at the National Human Genome Center, has a simple solution: a checklist. "Someone 25 years old with unexplained shortness of breath could be given a menu of sorts, in which he or she is asked, 'Do you want to know if you have a five-fold risk of Alzheimer's Disease even though this might be several decades in the future?'" he says. "The other way is the paternalistic approach, where it is left up to the physician to make the call as to what is important or not."

To address this issue, the medical community is drafting guidelines on how physicians should disclose the findings of genetic sequencing. Leading the charge is the CDC's Evaluating Genomic Applications for Practice and Prevention Workgroup, which Dr. Calonge chairs. He provided a four-part test before physicians should communicate results: "You want to ensure that the evidence indicates an association between a variant and a health outcome. And you want to ensure that this association is important. You do this because the probability that the variant will express itself as symptomatic disease is sufficient to present a significant risk to the person's health, and lastly because there is something therapeutically we can do."

For medicine then, learning more about our genetic makeup is just the tip of the iceberg. Whether that information is useful, ultimately, will come down to how and whether it leads to more effective treatments and cures—still the most important factor of all.

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Russ Banham is a veteran financial journalist and frequent contributor to "The Wall Street Journal", "Chief Executive", "CFO", and many other business publications. He is the author of several books, including "The Ford Century," a history of Ford Motor Co.

This disclosure applies to the following T. Rowe Price mutual funds: T. Rowe Price Blue Chip Growth Fund, T. Rowe Price Capital Appreciation Fund, T. Rowe Price Capital Opportunity Fund, T. Rowe Price Growth Stock Fund, T. Rowe Price Health Sciences Fund, T. Rowe Price Mid-Cap Growth Fund, T. Rowe Price New America Growth Fund, T. Rowe Price New Horizons Fund, and T. Rowe Price Tax-Efficient Equity Fund. Express Scripts represented 1.26% of the T. Rowe Price Blue Chip Growth Fund, 0.48% of the T. Rowe Price Capital Opportunity Fund, 0.26% of the T. Rowe Price Capital Appreciation Fund, 1.23% of the T. Rowe Price Health Sciences Fund, 0.62% of the T. Rowe Price New America Growth Fund, and 0.47% of the T. Rowe Price Tax-Efficient Equity Fund as of June 30, 2012. It was not held by the other funds above. Illumina represented 0.14% of the T. Rowe Price Health Sciences Fund, 0.23% of the T. Rowe Price Mid-Cap Growth Fund, 0.24% of the T. Rowe Price New America Growth Fund, and 0.26% of the T. Rowe Price New Horizons Fund as of June 30, 2012. It was not held by the other funds above. Life Technologies represented 0.05% of the T. Rowe Price Capital Opportunity Fund and 0.04% of the T. Rowe Price Tax-Efficient Equity Fund as of June 30, 2012. It was not held by any of the other funds above. Pacific Bioscience, Oxford Nanopore Technologies, Complete Genomics, Ion Torrent, DNA Direct, Sequenom, and Ariosa Diagnostics were not held by the funds above as of June 30, 2012. The funds' portfolio holdings are historical and subject to change. This material should not be deemed a recommendation to buy or sell any of the securities mentioned.

T. Rowe Price and Russ Banham are not affiliated.

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Anthony Bradshaw