A new genetic test is going to increase milk production in cows and yield big profits.

While it may take years before widespread genetic testing changes humanity, animals are experiencing a difference today. According to Forbes, a single genetic test for breeding dairy cattle has almost completely replaced older pedigree tests in less than two years. Developed by Curtis Van Tessell at the USDA and performed by Illumina, this test costs only $250, replacing the previous system’s $50,000 price tag! The cheaper testing allows smaller dairy farmers to enter into the profitable business of selling cattle eggs and sperm. Using genetic testing, milk producers predict that the annual increase in US milk production will double to 5%. We’re talking about millions of dollars of increased profit in the United States alone. Van Tessell’s new test demonstrates that the age of widespread genetic evaluation has already started.

When it comes to human genetic testing, Illumina is one of the biggest names in the business. It and competitors like Complete Genomics are aiming to bring whole genome sequencing into the price range of most individuals. Right now, more affordable genetic evaluation can focus on key genes in human DNA. These single nucleotide polymorphisms (SNPs) are cheaper to test – companies like 23andMe use them exclusively to great avail. In Van Tessell’s test, SNP tests are used to keep track of 38,000 key differences that the USDA team discovered were important in dairy cattle breeding. One wonders how whole genome sequencing will affect animal husbandry. The bovine genome was recently mapped in 2009. Could we see even more profitable breeding? Maybe greater acceptance of germline genetic engineering? The reverse also could be interesting: how will attitudes about human genome testing change when genetic evaluation becomes a staple on the farm?

Funny enough, Illumina wasn’t really interested in getting into the animal testing business. Van Tessell was originally working with Solexa when that company was acquired by Illumina. He had to work tirelessly to convince the new company that his cattle evaluation was a worthwhile endeavor. Finally, Illumina developed a chip (snp 50) to use in Van Tessell’s test. It paid off for everyone. Illumina generates about $50 million a year, 8% of its revenue, through agricultural genetics, of which the cattle testing is a major contributor.

What exactly is the Van Tessell test looking at? A long history of milk production. The USDA Animal Improvement Programs Lab evaluates genetic fitness by examining milk records and certain cells in the udder. This helped the USDA and Van Tessell determine which 38,000 genetic markers would correspond to animals that not only had the best genes for milk production, but were actually passing those genes on to offspring. The last century of pedigrees were only about 30% accurate in finding good dairy cows. No pedigree can be better than 50% (due to uncertainty in which parent will pass on a particular gene). The new genetic test is about 70% accurate in predicting milk production. And again, it costs just $250!

With genetic benefits, however, come genetic concerns. In the past thirty years selective breeding has lead to a 8% increase in milk production per Hollstein cow. It has also generated a system by which only 500 bulls are used to inseminate nearly 9 million heifers. The new test has allowed smaller farms to enter into the sperm and eggs market, finding better breeding stock in previously unevaluated cattle. Yet of the 3000 bulls tested under the new system last year, only 130 qualified for breeding. It seems like the male side of the gene pool is going to stay pretty shallow. I worry about any living product (animal or plant) with a narrow family tree. It opens the way for a small genetic predisposition to a new disease to devastate an entire industry.

That won’t likely be a problem with humans however, and the genetic testing of cattle has some important implications for our own species. A single test is going to double the increase in production, and yield untold profits for milk farmers. What kind of parallel benefits might humans enjoy as genetic evaluation becomes more available? We’ve already seen how SNP testing can help tell you about your susceptibility to certain diseases. The real changes in humans, as with cattle, may come when genetic sequencing starts to affect breeding. People are already clamoring to evaluate their kids, and many may want to start the evaluation process earlier. Would you pay $250 to see if your prospective mate had a genome clear of defects? Some would. Some will. And while public discrimination based on genetics in now illegal in the US (and has been in other nations for some time), private discrimination is still to be determined. Are we going to pay a social/moral price for the profits of genetics? Van Tessell’s work with cows make those profits seem very high. In the next few years humanity may follow the herd.

[photo credit: ESPN]

The IBM device would read single strands of DNA as they passed through layers of a microchip.

Sequencing your genome is going to be such big business that everyone wants to get in on it, even if they aren’t ready. In a recent press release, IBM announced that it is working to create a microchip that will sequence DNA by running it through tiny ‘nanopores’. The DNA Transistor will be able to sequence the entire genome rapidly and for less than $1000. While a working prototype of the chip won’t be created for three more years, IBM thinks that the theory and computation behind the concept is sound. If ultimately successful, the computer giant would launch itself to the forefront of the genome sequencing field. For now though, the company is just pushing an idea, not a product. I love it when companies compete in a field, but IBM’s got years of hard work before it could be a genome sequencing competitor. A fact that makes their press release seem premature at best. Still, you should check out the admittedly cool PR video after the break.

The first human genome cost around three billion dollars to sequence. Today, Illumina is offering to do the same for $50,000 and Complete Genomics is looking to a $5000 price tag under certain conditions by the end of next year. But the big hurdle is $1000. At that point, sequencing a genome will become accessible to almost anyone, and could see wide spread adoption in health and medicine. Using genetic information, doctors could provide personalized health care that would target illnesses and choose treatments which best suit your body. Knowing more, we could live much longer.


IBM’s proposed device would work by threading a single strand of DNA through a 3 nanometer diameter pore that is drilled through a silicon chip using an electron beam. As the press release admits, that idea is being explored by several companies around the world (including Agilent, Sequenom, NabSys, and Oxford Nanopore Technologies). The IBM innovation is to slow the progress of the DNA through the nanopore by using electric fields as gates. By controlling the speed at which the DNA moves, IBM hopes to read the strand. That reading would be accomplished by measuring the variation in electric potentials across the pore, which is uniquely different depending on if the base is A, C, T, or G.

Strands of DNA suspended in a solvent would be encouraged to pass through the nanopore due to an electric bias. Electric fields in the pore would control strand movement and read the DNA.

When I first looked at the IBM video describing the DNA Transistor, I thought, “I’ve seen this before.” I interviewed DNA Electronics CEO Christopher Toumazou about the combination of CMOS technology and genetics last month. The SNP Dr is a hand held silicon chip based device that reads DNA to find interesting genetic sequences. Unlike IBM’s device, it’s already been made and tested.

But there are big differences between the two devices besides the fact that IBM’s is still on the drawing board. First, the SNP Dr looks for single nucleotide polymorphisms, the single gene variations that have important impact on physical traits, drug reactions, etc. The SNP Dr does not sequence your entire genome as the DNA Transistor plans to do. If it helps to draw comparisons to companies, the SNP Dr is like 23andMe and the DNA Transistor is more like Illumina or Complete Genomics. Secondly, the SNP Dr works by using enzymes (polymerases) to cause protons to be released as a strand of DNA is read, and the silicon chip measures that current. The DNA Transistor would only use electric fields to read the strand as it passes through the nanopore.

So the DNA Transistor could be an important improvement over the existing SNP Dr technology, but not yet. In fact, IBM is looking to have a working prototype in three years. That seems like forever. Complete Genomics will have $5000 sequencing by the end of 2010 and it should only get cheaper thereafter. The same goes for Illumina and every other genome focused company. By 2013, the $1000 hurdle could have been jumped by one of these companies. Heck, by that time, we could see the price drop much lower. If the DNA transistor is to be competitive that far down the road it will have to be cheaper (IBM has tossed around the $100 mark as a possibility) or much much faster.

Luckily for IBM, silicon technology has speed down to a fine science. I don’t know if the DNA Transistor is going to be the device that defines the next generation of DNA sequencing, but I do know that the marriage of CMOS and genetics is powerful. That’s a sentiment shared by the researchers behind the IBM device, Stas Polonsky and Gustavo Stolovitzky, in the companion video embedded below.

Everything about this press release strikes me as hype. Good hype, sincere hype, but hype all the same. There’s no doubt that the combination of genome sequencing and microchip technology is a game changing idea, but IBM doesn’t have a monopoly on it. Obviously DNA Electronics has a somewhat related device already nearing market, and there are other companies also working towards using nanopores to sequence the whole genome. A lot can happen in three years. Hopefully someone will have a working prototype by that time. It could be IBM, but no matter who it is, their cheap and quick sequencing is going to change our lives.

The race to provide you with access to your genome is really heating up. Industry leader Illumina (NASDAQ: ILMN) has completed its first genome sequencing service for an individual at the low-low price of $48,000. That’s almost ten times what Complete Genomics plans to charge, but Illumina is offering the service directly to private individuals, not research groups. In fact, this is the first time any one person has had their genome sequenced for less than $50k. Illumina’s performance shows that it is still one of the forces to be reckoned with in whole human genome sequencing.

What are we to make of Illumina’s successful personalized genome sequencing service? It stacks up well against Knome’s KnomeCOMPLETE™ service which is perhaps the only other successful individual genome sequencing service on the market at the moment. Knome is trying hard to remain a contender in the field, but at $99.5k, it’s more than double Illumnia’s price.  With comparable capabilities and results, price becomes the real determining factor between those two companies.

Of course, it’s hard to take either seriously as a contender against Complete Genomics. $99,500 versus $48,000 versus $5000, which price would you want to pay? Of course, CG is only offering that low price to orders of 40+ genomes. In orders of 8+, they’ll be charging $20,000 (see our earlier article for more). The price for a single solitary genome could be even higher. But it’s actually unclear whether Illumina or Complete Genomics is really after the individual customer market. We know people who are after the individual market, and may be offering it at only $1000, and we’ll get that story published soonish. (It seems like we mention this mystery company every other day. Sheesh)

While CEO of Illumina, Jay Flatley was the first to get his genome sequenced under the new system, the first official customer was Herman Hauser of Amadeus Capital Partners. According to the Illumina website, both men intend to place their genomes in the public domain (potentially doubling the number of such genomes) in order to facilitate understanding and research. The next two customers on the docket are preeminent scholar of African American studies, Henry Louis “Skip” Gates, Jr. and his father, Henry Louis Gates, Sr. As Skip Gates hosted and produced two TV specials on African American heritage that featured DNA tests, I anticipate his genome results will facilitate the production of a third show.

There are two broad approaches to the task of analyzing the entirety of your DNA. You can specialize as much as possible, and in doing so reduce costs, or you can keep your range of applications wide, but sacrifice in economic efficiency. Complete Genomics represents the first approach, Illumina the second. Illumina can sequence DNA and RNA and not just from humans. Their sequencing services are broad, rigorous, and perhaps the most trusted in the industry.

So that’s how I view Illumina’s latest success: just another feather in a well-feathered cap. Unless Illumina drastically brings the costs down, Complete Genomics, or another company like them, will dominate the human genome sequencing market. If Illumina does cut the price, they certainly will enjoy a large share of the market. They have broad respect in a variety of DNA testing fields and they are working with 23andMe, Knome, deCODE Genetics, and Navigenics in secondary data analysis.

Knowledge of your genome is likely to be one of your strongest assets in the decades to come. Current uses and understanding of genetics tend to focus on relatively few genes – single nucleotide polymorphisms or SNPs. Companies like 23andME help you determine ancestry, risks for diseases, and important trait information just by using SNPs (and some short sequences of DNA). That’s why services from those companies are so cheap. As research into genetic traits continue, the range of ‘interesting’ DNA segments will increase. Whole genome sequencing has the potential to tell you about every inherited aspect of your body. In that light, sequencing your complete genome is likely to change from novelty to necessity.

Anyone who’s read my posts before probably knows that I love when businesses compete. The only thing that makes me happier than knowing someone is trying to provide wide-range access to genome sequencing, is knowing that someone else is trying to do it even cheaper. The public needs that access sooner rather than later. Today, knowing your genome just gives you a little more information for you and your doctor to use when planning your healthcare. Tomorrow, understanding your genome could help you extend your life by 30 years, increase your intelligence, or make you glow in the dark. It all starts with sequencing, and thankfully no one has a monopoly on that. Yet.

Complete Genomics is pushing down the costs of sequencing the human genome.

It’s getting progressively cheaper to sequence your entire genome. Earlier in June, Illumina announced it would provide sequencing for close to $50k, half of their original price. Not to be outdone, Complete Genomics just released on Monday that it had gathered $45 million dollars in funding. The Silicon Valley based company is planning to use that money to further develop their streamline sequencing operations so that they can offer a complete genome for just $5000 by next year. CG’s goal is to finish 10,000 sequences by years end 2010. Even though that’s later than we had hoped, it’s still a whole lot of DNA and at the cheapest price for a whole genome seen so far. The question is, can they really pull it off?

We’ve been looking for a company, any company really, to break the $1000 price mark for a complete genome sequencing sometime in the next few years. That’s about the point where retail sales of the service will explode. With their exponentially decreasing price tag, Complete Genomics might be on that path. However, we know of at least one company that is trying to reach that goal by the end of this year. Stay tuned for that story in the next few weeks.

If you’ve never heard of Complete Genomics, read our first and second story to catch up. Basically they use a common form of short read sequencing and throw in a ton of computer power to sequence a human genome. Interest in personal genomics is escalating as genetic links to diseases are discovered. 23andMe already offers some testing for such diseases and is hoping to gather samples for further clinical trials. By providing the entire genome for perusal on the cheap, CG could make it economically feasible to expand that research into many more illnesses. Already, we’ve shown you how some facilities are erroneously promising to predict a child’s aptitude based on genetic sampling. Perhaps with the cheap sequencing CG could provide, scientific research will match pace with the growing demand for such testing.

Daniel MacArthur of Genetic Future was able to pry CG head Cliff Reid to provide some details in how they hope to achieve their goals. First, Reid disclosed that the test won’t be offered directly to consumers, but rather through retail providers such as Knome and 23andMe. That means the price you or I will see could be considerably higher than $5k. Whatever the retail price, Reid promises 120 billion base pairs sequenced, 98% of the genome, with just one error in 10,000. That’s considerably better stats than what CG offered in February (92% of genome, about one error in 1,000).

Between now and year’s end 2009, Complete Genomics will focus on its dozens of customers currently in the line up. These include the Broad Institute out of MIT and Harvard which announced it was purchasing at least 5 genomes from CG in March. The Broad Institute reportedly paid $20k for each of their genomes which might be taken as the current baseline price for CG customers. If so, that’s a factor of four that the company has to make up between now and next year.

But scaling is no problem for genome sequencing. Remember that it took 15 years to sequence the first human genome, but the next 6 were done in 24 months. Now we’re talking about doing thousands a year. That’s just nuts and one of the amazing parts about sequencing that I love. Exponential growth is sexy science. And it’s supposed to be one of CG’s strengths. They just finished their first genome in the summer of 2008, and are now on schedule to finish 100 by the end of 2009. Current estimates of finishing 1000 by mid 2010, and 9000 more by the end of that year fit within the exponential growth curve. As MacArthur points out, most of these sequencing services will likely be purchased by researchers in genomic and cancer studies. So the demand is also there.

How can CG scale so quickly? By remaining inflexible but efficient. Their process doesn’t rely on making huge improvements in sequencing technology. Or finding a new sequencing technique. It comes down to streamlining the process. Stick to one task, human genome sequencing, miniaturize whenever possible, fewer reagents means lower costs, and build build build. You can bet a huge portion of that $45 million is going to expanding their facilities in Mountain View.

Who provides the cheap genomes is probably less important than the change it will create. While scientific research will undoubtedly benefit first, the public at large will likely become a dominant consumer. Genetic information is on the journey to becoming one of the most important sets of data someone can know about themselves, with insights into disease, aptitudes, and longevity. Give us the chance for cheap access to that info and you’ll never run out of customers. Just a little while longer, it’s bound to happen.

Brin appears to have sunk $10 million into this series B round, while Google has put in $2.6 million.  As if the financial investments weren’t controversial enough, apparently Google and 23andme have entered into some sort of leasing agreement, though the details of this agreement are not available.

For those with their heads in the sand, there are two major types of personal genome sequencing out there.  In the first type, your entire genome is sequenced – every single one of your 3 Billion base pairs.  This procedure is expensive and time consuming, and although companies like Complete Genomics are poised to bring this ability to the masses for about $1,000 per individual in the next year or two, the price is currently much higher.  For the masses who cannot wait for the full genome sequencing from the likes of Complete Genomics, an alternative is to have more than 1 million of the most important or interesting chunks of your DNA, called SNPs, analyzed for much less than $1,000 today.  There are two major players in this space, 23andme and Decodeme.  As we reported earlier, Decodeme is facing imminent bankruptcy, and this latest round of funding shows that even for industry front runner 23andme the market is a tough place to be.

Although the future for personal DNA sequencing is eventually going in the direction of full sequencing of every single base pair, 23andme offers a valuable service in the near term that is charting new ground and helping to pave the way for the ongoing genetics revolution.  Given that the future seems to be in whole genome sequencing, rather than with SNPs, the long term future of 23andme seems perilous…I would not want to be one of their investors for the long term.

Ethical investments and economic viability of the company aside, you gotta hand it to 23andme for being an innovative and leading company in the field of genetics.  They have really stirred things up: making genetics cool, bringing real genetic tools to the masses, and proposing bold initiatives for conquering disease.  Most notably perhaps, our earlier story on the 23andme initiative to gather DNA samples from at least 10,000 people as part of a massive effort to identify genes that may be at the root of Parkinson’s disease is laudable.

Now with more money in the bank, 23andme should be able to plug along for another year or more and further the genomics revolution.  Lets wish them well, for we need all the help we can get to achieve the promise of genetics.

(Disclosure: In my previous career I worked at Google)

Complete Genomics uses a sequencing technology called “short read”, which means that they decode the DNA in small segments and then stitch all of these small segments together to make the whole sequence.  This same technique is used by many of Complete’s competitors, and is plagued with the problem that errors are sometimes introduced into the sequence during the stitching process.  MacArthur notes that Complete Genomics’ current error rate of 0.1%, which is reasonable by current industry standards, would result in 300,000 errors in a 3 billion base pair whole human genome.

So what does this mean?  It means that although Complete Genomics’ ability to accurately decode genomes seems to be within the range of its competitors, it falls short of the 100% accuracy that is ultimately desired.  The upshot is that the coming revolution in genomics in the next few years will be somewhat limited by sequencing that is not 100% accurate.  There is still a great deal of work that can be done on genomes that are 99.9% accurate and great scientific progress will undoubtedly result.  Ideally though, in the next ten years the technology will improve to true 100% accuracy, at which point further doors will be opened in the field of genetic analysis.

MacArthur reminds us that Complete Genomics is committed to only sequencing human genomes, even though genomes of monkeys and other organisms could easily be performed.  The reason:

“focusing only on large-scale human -omics will allow Complete to avoid the worst complexities of the service model (i.e. receiving many types of sample that require processing in many different ways), but still focus on the area where the market is the strongest.”

“Reid says that the goal of Complete is to create “a stream-lined factory” producing complete human genomes; by focusing on just one application (unlike any other genome facility) they can hone this process down to the point that they can do it cheaper and better than anyone else.”

Our interpretation: Complete Genomics is smart!  These guys are carving out the position as the company to go to for human genomic sequencing.  The genomics field is competitive and wide.  By narrowing their focus to human only genome sequencing, Complete Genomics is simplifying their business model and further solidifying their position in the lucrative market for human genome sequencing.

Image: source

When reading Daniel’s post you can feel the intensity at the conference as companies at AGBT fight for top bragging rights to deliver the fastest and cheapest genome sequencing capability to the world.  The stakes are extremely high: literally billions of dollars in sales await the company that can dominate in the delivery of affordable, rapid, whole genome sequencing to every human on the planet.

The intensity at the conference reached a climax when Clifford Reid, the CEO of Complete Genomics, delivered his much anticipated presentation to confirm whether or not the company’s industry shattering claim of $5000 sequencing of a whole human genome by mid-2009 was really true.  According to MacArthur, Complete Genomics did not disappoint, and hence a company that nobody had even heard of until it came out of stealth mode in October 2008 now appears to have cemented its position solidly at the front of this high stakes race.

So what is the secret behind Complete Genomics’ stunning success?  The secret is that Complete Genomics’ has completely upended the business model for genetic sequencing, focusing on computational might and centralization while its competitors have focused on flexibility and distribution.

Complete Genomics’ competitors have built their business models around the production of devices that their clients can purchase and install at their own facilities.  This business model offers customers the flexibility of performing their own genetic sequencing, but in exchange for this flexibility customers are limiting the computing capacity they can throw at the problem to what can be squeezed into a deliverable product.

Complete Genomics, on the other hand, does not produce anything that its customers can install or use.  Realizing that genetic sequencing is a raw horsepower problem of who has the most computing capacity,  Complete Genomics has built a server farm that can be continuously expanded to throw more and more computing muscle at the problem.  Complete Genomics has optimized the computation of genetic sequencing, building one centralized, giant super sequencer that now seems poised to leave its competitors in the dust.  Within the next 5 years Complete Genomics is aiming to sequence a whopping 1 million human genomes!

It is important to point out that being the fastest doesn’t mean anything if your output is littered with errors.  MacArthur notes that investigation is still required to confirm the accuracy of Complete Genomics’ sequencing technique when he writes:

“I was convinced by the SNP data, but I will be very interested to see how the system performs in terms of calling large-scale structural variants, and in dealing with highly repetitive regions. These are major problems for very short read technologies that can’t be solved by simply increasing coverage; information on these issues was largely missing from Reid’s presentation, aside from an almost cursory mention of a technology called “long fragment reads” that might help to address such problems. Large-scale structural variants play an important role in human variation and disease, so Complete will need to deal with these areas effectively if it is to generate genome sequences that can realistically be called “complete”.”

As an aside, many might mistakenly think that genomes are already being sequenced for less than $1,000 by companies like 23andme and decodeme, but these companies do not offer full genome sequencing.   Instead they only analyze a few hundred hot spots in your dna called SNP’s that can tell you lots of interesting things about your dna, but not the whole story.  Fully sequencing every single one of the approximately 3 billion base pairs of your dna is a completely different scenario, and this is where the real battle is being fought.

Update: More information has recently been revealed about Complete Genomics

The Archon X Prize is offering $10 million “to the first Team that can build a device and use it to sequence 100
human genomes within 10 days or less, with an accuracy of no more than
one error in every 100,000 bases sequenced, with sequences accurately
covering at least 98% of the genome, and at a recurring cost of no more
than $10,000 per genome.”

The Archon X Prize will accelerate mankind’s efforts to achieve affordable and fast sequencing and analysis of the DNA for every individual on the planet. Once this capability is a reality it will unleash a revolution in our ability to make people healthier, fight disease, and even improve people beyond their original genetic and biological bodies.

Picture from Archon X Prize Website