July 1, 2011 (Vol. 31, No. 13)

Rapid Transition from Laboratory Discoveries to Commercialization Is Transforming Healthcare

It’s been less than a decade since a full human genome was sequenced, but already there is talk that the promise of genomics-inspired personal medicine is not being realized. I couldn’t disagree more. As we point out in this article, cardiologists, psychiatrists, and internists can now order quick and inexpensive genetics-based screening tests to help determine the best treatment for patients with conditions as diverse as depression or diabetes. These days, researchers are actively working on systems that will take the next step, designing specific treatments for specific people based almost entirely on their genome.

Genomics, it turns out, is only half of it. Also at work is Moore’s Law, which has allowed the electronics industry to deliver products year after year that do more in a smaller space and for lower cost.

Combine the two and the result is a new era of personalized, clinically actionable medicine, one in which treatments are tailored to the genetic make up of each individual patient. The resulting care will be more effective, since it abandons a one-size-fits-all approach to medicine. It will also be more economical; genomic techniques help doctors know ahead of time what therapies will or won’t work, putting an end to the days of trying several drugs, one after another, to discover the one that is effective.

Genomic medicine is perfectly in tune with current healthcare policy, which stresses better outcomes at lower overall costs.

The market opportunities, of course, are enormous. PricewaterhouseCoopers estimates that the core diagnostic and therapeutic segment of the personalized medicine market, made up of pharmaceutical, medical device, and diagnostics companies, is currently worth $24 billion and will reach $42 billion by 2015.

Even greater growth is predicted for the related fields of telemedicine, health information technology, and disease management. Those services are now valued at between $4 billion and $12 billion a year, but could conceivably grow to $100 billion by 2015.

Genomic medicine is a perfect investment arena for healthcare venture capitalists because it is so closely aligned with the traditional mission of VCs: taking big bets on novel technologies that have the potential of being transformed into huge commercial products. Most genomics companies are still small start-ups taking advantage of highly focused R&D in an area with enormous potential.

As it matures, personalized medicine is likely to become a significant part of every global pharmaceutical company’s portfolio. In fact, those corporate divisions might well be built on the foundations of some of the startups described in this article.

The five companies profiled here are emblematic of this new wave of smart, personal medicine. The founders of these companies come from different academic fields and are all taking different approaches to the problem. Some of the diagnostic firms, for example, are developing low-cost, disposable point-of-care test kits, while others rely on a traditional hospital lab for the test performance.

But they all show the remarkable speed at which laboratory and research insights are making their way into the doctor’s office. In the case of some diagnostic equipment, barely two years have elapsed between an initial scientific insight and a product being available for evaluation. This pace of change is likely to continue to increase, as medicine is being transformed before our eyes.

Brad Webb


AssureRx has developed a diagnostic product that brings the world of genomics to psychiatry. A cheek swab is taken from patients seeing a doctor for a psychiatric condition, anything from moderate anxiety disorder to severe depression or schizophrenia. A lab at company headquarters then analyzes clinically important genetic variants to determine how well the patient will respond to commonly used psychotropic medications.

The treating physician receives a report that recommends the medications that are the most appropriate for the patient’s condition. This information allows doctors to choose the right drug for the patient from the start, speeding remission of the psychiatric disorder.


CardioDx uses genomics-based diagnostics to bring a new level of precision to the treatment of coronary artery diseases. The immense social cost of cardiac disease is well known, and despite remarkable diagnostic advances over the decades, cardiologists still don’t have all the information they need to make fully informed decisions.

One study suggested that 62% of patients who underwent invasive angiographic procedures did not, in fact, have any actual blockage to begin with. CardioDx researchers have identified a set of 23 genes and other patient characteristics that are expressed differently in healthy and diseased arterial tissues, and as a result, the company can determine the extent to which an individual patient is susceptible to blockage depending on the score.

Gene Security Network

Gene Security Network provides genomic screening tools that permit doctors in fertility medical practices to determine whether in vitro fertilized embryos, before their implantation, have any of a number of chromosomal abnormalities, such as Down Syndrome. These diagnostics tests reassure parents with difficulty becoming pregnant that their child won’t have a major genetic disease that might require a selective pregnancy termination. Embryonic chromosomal abnormality levels can be as high as 80% in women over the age of 40.


Nanomix has developed a carbon nanotube-based technology called Sensation that can be used for lowcost, disposable point-of-care diagnostics for a variety of conditions. One example is a test for elevated cardiac troponin levels that is reportedly superior, not only to other point-of-care troponin tests, but also to assays performed in a central lab. The same basic technology can also be used in respiratory and industrial sensing applications where lower power consumption and quick access to information are crucial.


Malignant cells, even when caused by the same kind of cancer, vary from patient to patient in a variety of ways, including certain intracellular signaling processes. Existing methods of detecting these differences are slow and expensive. Nodality researchers have developed a procedure to isolate individual tumor cells so that their intracellular signaling pathways can be easily measured.

The procedure is initially being used with leukemia patients, to test their likely response to induction treatment regimens. Initially, the company plans to extend use of the technology first to autoimmune diseases.

Tethys Bioscience

Diabetes is at epidemic levels in the U.S., with disastrous consequences for healthcare costs. It can be difficult for clinicians to know which of their possibly prediabetic patients should be treated aggressively or which should be monitored less frequently.

Tethys Bioscience has developed a blood test that looks at levels of seven proteins and metabolites that have been correlated with progression to an advanced stage of the disease. The test is able to deliver a score that tells a doctor a given patient’s risk of developing type 2 diabetes within five years.

Genomics is fast becoming a crucial part of the medical landscape. For investors, there is a chance to be in at the ground floor of important new markets. Entrepreneurially minded scientists have a chance to take a new idea and quickly determine if it can gain market traction. Patients can look forward to the prospect of treatments that work the first time and can be personalized for their individual medical needs, and society stands to gain from better healthcare delivered at lower cost. Few eras in medical history have been as rich with possibility as the one we are living in now.

Brad Webb ([email protected]) is a VC investor at Claremont Creek Ventures, which invests in AssureRx and Gene Security Network.

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