Invitae Reinvents Genetic Testing
According to a recent article on Bloomberg, the biggest U.S. health insurer, UnitedHealth Group Inc. (UNH), stated that it expects national annual spending on genetic tests to increase fivefold over the next decade to $25 billion. The costs of genetic testing have been decreasing rapidly with price points that are now affordable for the general public. Last year we highlighted a genetics testing company, 23andMe, which was offering health-related genetic testing and reports to the public. Since then, the FDA has banned 23andMe from selling its personal genetic testing kits to the public and their website states “at this time we do not offer health-related genetic reports“. One other company that markets similar genetic tests to the public is Invitae.
San Francisco based Invitae was founded in 2012 and has taken in funding of $75 million so far from the likes of Genomic Health (NASDAQ: GHDX), Redmile Group, Genesys Capital, Casdin Capital, and others. The last investment round was a $40 million Series E financing which took place in December 2013.
Invitae’s strategy over the next several years is to aggregate all of the world’s medical genetic tests (>3,000 known genetic diseases) into a single assay at a lower cost than most single-gene tests today. Invitae’s clinical genetic tests must be ordered through a certified healthcare professional and any combination of genetic tests costs $1500 with a 2-week turnaround time. Tests can be selected for hereditary disorders, single genes, or panels such as the one seen below to test for various cilopathies:
In June 2013. the Supreme Court ruled that naturally occurring DNA cannot be patented which allows Invitae to use publicly available data from studies of gene variants and rare disorders without having to spend a great deal of money on clinical trials. Invitae also chooses to promote publicly available genetic information and offers a beta tool called CLINVITAE which is a searchable online database of 9189 clinically-observed genes with 79907 different variants aggregated from public sources, and made freely available. Other competitors are keeping a close eye on this release of genetic information into the public domain with Invitae being named a defendant in a lawsuit filed by Myriad Genetics (NASDAQ:MYGN) regarding Invitae’s BRCA and MUTYH genetic tests. Invitae made this response to the lawsuit and later filed a countersuit against Myriad.
Affordable genetic testing, along with last year’s Supreme Court ruling that DNA cannot be patented, makes Invitae’s business model very compelling and the company is one to watch closely as this new market develops over time.