Genome Research Benefits Growing and Getting Cheaper
The ruling by the U.S. Supreme Court this week that human genes cannot be patented comes a decade after the Human Genome Project was completed to much fanfare, and people might be forgiven for wondering what the fuss was about. After all, where are the miraculous benefits?
Biotech and drug companies say some are here, and more are on the way. Just as importantly, advances are pushing the technology toward greater affordability. Analysts said Thursday's ruling will help drive costs lower as well.
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"Ten years ago it would've taken a factory full of machines the size of fridge-freezers costing millions of dollars. Now you're talking about doing DNA sequencing on a chip," Life Technologies President Peter Silvester told CNBC's "Squawk Box Europe," showing one little bigger than a Scrabble tile. "The cost is coming down dramatically, and our goal is really to democratize sequencing."
He said that where the mapping of the first human genome took 13 years and $3 billion, five years ago that cost was down to a million, last year it was down to tens of thousands and now it's down to thousands or possibly hundreds of dollars.
The time it takes has been dramatically reduced as well. "Technology, like semiconductor sequencing, can do it in a few hours," he said.
When movie star Angelina Jolie went public about her double mastectomy in May and said she chose that course after genetic testing indicated an 87 percent risk of breast cancer, costs of the gene testing were upwards of $3,000, which may or may not be covered by insurance. However, under Obamacare, genetic counseling and testing must be provided without patient cost-sharing for women whose family history indicates high risk.
Myriad Genetics' stock enjoyed a boost after Jolie disclosed having used the company's cancer-screening services. Thursday's Supreme Court decision was in response to a challenge to Myriad patents.
The mixed ruling, which allowed legal protections for synthetically produced genetic material while disallowing those for naturally occurring genes, sent shares surging more than 10 percent before crashing at the end the day and continuing to fall Friday to close at $27.59, 27 percent off Thursday's high. Investors apparently saw the ruling as opening Myriad's core hereditary testing business to competition.
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Matthew Foy, with GlaxoSmithKline's independent venture capital fund SR One, offered one example of a breakthrough technology that could be available soon. He said a biotech SR One backs, PsiOxus Therapeutics, produces a cancer drug that self-amplifies as it attacks cancer cells.
"It has a genetically engineered virus. ... When it finds a cancer cell, it makes hundreds of thousands of copies of itself. It bursts the cell, kills the cell, and the environment is now flooded with these copies of the (cancer-cell-fighting) virus," he said. "The idea is it can spread throughout a tumor extremely quickly."
The drug is in Phase I clinical trials, where it is tested on a small group of people.
Silvester said a key aspect of genome technology is that it allows for the different ways people react to treatments.
"Drugs that work for some people can unfortunately not work for others, or even kill people, and that's why they're not brought to the market," he said. "So having the ability to target drugs more effectively is critical."
GlaxoSmithKline shares are up more than 20 percent year-to-date. The British drugmaker this week fired one head researcher and disciplined others over "misrepresented" data.
Life Technologies, whose shares have plateaued since mid-April after climbing 50 percent in 2013, on Thursday announced the acquisition of its distribution partner in South Korea, LSK. Thermo Fisher Scientific, meanwhile, has made a $13.6 billion offer for Life Technologies.
Biotechs broadly have been beating the market lately, with the iShares Nasdaq Biotechnology Index Fund up 28 percent year-to-date, the SPDR S&P Biotech ETF up 21 percent, and the First Trust NYSE Arca Biotech Index Fund up 23 percent.
—By CNBC's Matt Twomey. Follow him on Twitter @Matt_Twomey.