This report will address genetic testing services as a consumer business. It will focus on the health-related segment sold over the Internet called Personal Genomics, the DTC business of scanning or sequencing genomes for health-related, and sometimes other, genetic information, which has only recently come into its own in a significant way. How certain will the business outlook be once the “curiosity factor” subsides?

1. Direct-To-Consumer Genetic Testing: Business Prospects in the United States
Report Summary
Direct-To-Consumer Genetic Testing: Business Prospects in the United States covers the
business of genetic tests marketed and sold directly to consumers (DTC), with special
attention paid to the small, emerging, and definitely attention-getting segment called
Personal Genomics. Thanks to the confluence of two transformational technologies that
derive from the invention of the Internet and the completion of the Human Genome Project,
the availability of genetic tests is migrating from the scientist- and health professional-
controlled domains of research (hospital and clinical laboratories) to the wild, wild world of
cyberspace, available to anyone, almost anywhere, with the click of a mouse.
Buy Now: Direct-To-Consumer Genetic Testing Market
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This report will address genetic testing services as a consumer business. It will focus on the
health-related segment sold over the Internet called Personal Genomics, the DTC business
of scanning or sequencing genomes for health-related, and sometimes other, genetic
information, which has only recently come into its own in a significant way. How certain will
the business outlook be once the “curiosity factor” subsides?
According to the National Institutes of Health (NIH), almost 1,500 genetic tests are already
in use, primarily in clinical settings, and some remain in research laboratories. Most of them
are for rare, inherited diseases, and only those studying rare diseases know they exist. The
average, or even the highly educated, consumer has likely never heard of them, unless they
happen to know someone affected.
In a June 2007 Forbes.com article, Piper Jaffray said that doctors and patients worldwide
spend $730 million per year on genetic tests, and the market is growing 20% per year.* If
this figure and the 20% growth rate are accurate, that would make the global market
approach about $950 million by early 2009.
Clearly, the genetic tests sold DTC over the Internet, and the newer genome scans or
genome sequencing offered by the newest personal genomics companies, comprise only a
tiny slice of this larger pie. The vast majority of all firms offering gene analyses and services
are privately held, a number are startups, and those that are public have other well-
established lines of business to lean on while testing the waters with their first foray selling
tests and counseling through cyberspace. The newest entries, prominent for their scientific
platforms as well as wide coverage in the media and especially in the genetics blogosphere,
are well-funded firms dedicated to DTC genetic testing barely a year out of the gate.

2. But marketing or selling genetic tests to consumers is not really that new. Though not
covered in this report, various parentage and identity tests have been available to
consumers since the late 1980s. Some firms that specialized in this space early on now
have Web sites with these and additional offerings such as ancestry tests, various
pharmacogenetic tests, and nutritional tests based on DNA assessments. Firms offering
nutritional (“nutrigenomic”) tests got started in the early 1990s. However, none of these
“old timers” have received the attention of the newer genomic scan companies looking at
SNPs (single nucleotide polymorphisms) or gene sequencing, for either disease markers or
other personal traits, using the latest in gene chip or sequencing technologies.
Historically, genetic testing referred to testing for heritable diseases by examining the
metabolic products of single genes, rather than direct DNA analysis. These types of tests are
still in active clinical use, such as in the newborn screening programs present in every state,
though some may be using more modern chromatographic or spectrophotometric methods
for their analyses. By 1995, the NIH redefined genetic testing for a new age, as the
“analysis of human DNA, RNA, chromosomes, proteins, and certain metabolites in order to
detect heritable disease-related genotypes, mutations, phenotypes, or karyotypes for
clinical purposes which include predicting risk of disease, identifying carriers, and
establishing prenatal and clinical diagnosis or rognosis”.
Myriad Genetics paved the way for DTC personal genomic testing because they took the
controversial step of advertising their BRACAnalysis tests for hereditary breast and ovarian
cancers directly to consumers. Initially, these tests could be obtained only through a
physician. The consumer response to the advertising campaign was sufficiently strong that
it was clear that at least one segment ofconsumers, women concerned about breast cancer
(regardless of their family history), wanted genetic information…a clear signal to other firms
contemplating the benefits of selling DTC rather than exclusively through physician practices
that the time was right for them to launch their businesses. Today, Myriad’s tests are
available for consumers to purchase on some DTC genetic testing Web sites.
Many doctors and researchers have vigorously criticized the consumer genomics field,
saying the nascent industry is trying to ramp up faster than the science can interpret what
genomic scans really mean. Some critics have even called for a ban on DTC marketing of
such services and for greater oversight from the US Food and Drug Administration (FDA).
These concerns, the wave of new gene-chip technologies, and the ease of starting a
consumer business offering genetic information has definitely captured the attention of the
Department of Health and Human Services (DHHS), which oversees the FDA, and other
organizations with regulatory oversight of laboratory tests, as well as the Federal Trade
Commission (FTC), an independent agency within the Executive Branch. The federal dialog
has started over the medical legitimacy of the genetic tests offered to consumers; their
sometimes uncertain clinical validity and utility; how the information is being used; privacy

3. issues; the appropriate way to make sure that good scientific, medical, and ethical
standards are set and not compromised and consumers are protected from fraud—all at a
time when current regulatory oversight is shared between several agencies. State health
departments have already taken action against 13 DTC genetic testing firms. Some
companies have faded away as a result, and others passed regulatory muster with flying
colors.
The latest market entries that offer genomic scans or gene sequencing for disease markers
or other personal traits currently have similar business models but appeal to very different
consumer segments. At least one firm is evolving toward a more traditional “medical
model,” already partnering with physician groups to help them incorporate genetic
information into their practices. For another firm, increasing physician referrals, in addition
to consumer orders for specific genetic tests for disorders for which a patient has a family
history, are driving the business. Other firms have goals that will lead them in this same
direction. But some have put their corporate positioning stake in the ground as being a
strictly consumer business, and how they adapt to the realities of a consumer products and
services marketplace remains to be seen. Will new consumers keep coming to learn about
their predisposition to diseases they have never heard of? Should negative press
accumulate about the lack of clinical validation of the tests, and
how the same set of genes can obtain different interpretations from different companies,
how will consumers and these companies respond? How will securing repeat business be
managed? Will companies adopt any of the well-established consumer research
methodologies long relied upon by consumer goods companies to guide their business
decisions? When properly executed, consumer research methods have the built-in rigor to
forecast with considerable accuracy the market size in units and revenues for a new
consumer product or service. The investor community specializing in consumer businesses
often demands this kind of information early on, but it appears that biotech investors have
not.
For the 40+ DTC companies offering genomic or genetic testing services on the Web—from
DNA dating services to scientifically valid, medical genetic tests—it will be more than just
technology developments and regulations that shape the future: It will be the consumers
themselves. After taking a look at the history, the regulatory environment, and the current
business dynamics of DTC genetic testing, and having conversations with executives at
some of these dynamic firms, this
report will tell you why.

4. Table Of Contents:
Chapter 1
GENETIC TESTING: YESTERDAY AND TODAY
1.1. PKU: The First Genetic Test
Phenylketonuria
Success with PKU Testing Initiates Screening of Newborns for Other Inherited Diseases
Newborn Screening Is the Largest Segment of Testing for Gene-Based Disorders Today
1.2. Societal Issues Emerge as Testing for Genetic Diseases Evolves
Sickle Cell Trait and Tay-Sachs Disease
Tay-Sachs Disease: Incidence, Etiology, and Pathogenesis
Genetic Testing of Asymptomatic Gene Carriers Influences Family Reproductive Decisions
The Next Wave of Carrier Screening: Neural Tube Defects, Cystic Fibrosis, and
Huntington’s Disease
1.3. NIH Helps Redefine Genetic Testing for a New Age
Adoption of DNA “Fingerprinting” Is Embraced
1.4. BRCA1 and BRCA2: A New Breed of Genetic Testing for Hereditary Breast and
Ovarian Cancer (HBOC
Background on Hereditary Breast and Ovarian Cancer
Myriad Genetics Commercializes HBOC Genetic Testing
DTC Genetic Testing Rapidly Expands Following Myriad’s DTC Marketing Success
1.5. Genetic Testing in Medicine Today
Chapter 2
TODAY’S REGULATION OF GENETIC TESTING
2.1. The Emerging Business Environment
An Evolving Supply Chain Embracing New Technologies Drives a Growing Need for
Regulatory Reform
2.2. Regulatory Oversight
Several Agencies Have Oversight of Clinical Laboratory Tests and Devices, but Regulatory
Gaps Exist
An Overview of How Genetic Testing Is Currently Regulated in the United States
FDA’s Role Covers Equipment, Reagents, and Laboratory Tests
Medical Devices and In Vitro Diagnostics (IVDs)
Analyte Specific Reagents (ASRs)
Laboratory Developed Tests (LDTs)
Centers for Medicare & Medicaid Services (CMS) Regulates Laboratories, Their
Testing Services, and Their Reimbursement
The Federal Trade Commission (FTC) Oversees All Print, Media, and Internet
Advertising
The CDC’s Role Is Primarily One of Scientific Advisor
DHHS Addresses Issues Associated with Genetic Testing under the Secretary’s
Advisory Committee on Genetics,
Health, and Society (SACGHS)
2.3. Business Implications
The US Federal Regulatory Environment Favors Entrepreneurial Genetic Testing Companies
…But Each of the 50 States Has Its Own Suite of Regulations, Creating Confusion for DTC
Companies
Recent Regulatory Initiatives: States Step In When Federal Regulators Appear Slow to Act
New York State Quietly Begins the Challenges
California’s Recent Citations to DTC Companies Were Accompanied by Print Media

5. and Online Fanfare, Especially in the Gene-Blogosphere Community
What Was At Stake for Personal Genomics Companies in the California Order?
How Did Companies Respond to Regulatory Challenges?
The Outcome and Remaining Issues
Implications of the California Decision
What Remaining Issues Could Surface With Other State or Federal Regulators
Personal Information Services versus Medical Testing Data
How Are a “Diagnostic” or Clinical Laboratory Test and an “Authorized Provider”
Legally Defined?
Does Telling Someone They Have a Certain Genetic Profile, or Providing Them
With a Genetically Based Disease-Risk Assessment, Constitute Relevant Clinical
Information?
California Regulators, As Well As Others in the Medical and Federal Policy
Communities, Have Argued That DTC Genetic Testing Companies Pose a Danger
to Consumers
2.4. The Regulatory Outlook: Federal Regulation Grows More Likely
Congressional Activities
What Lies Ahead
2.5. Points to Ponder for Personal Genomics Companies
2.6. The Genetic Information and Non-Discrimination Act of 2008 (GINA)
GINA Removes Some, But Not All, Concerns Relating to
Protection from Genetic Discrimination
Chapter 3
DIRECT-TO-CONSUMER GENETIC TESTING: THE INDUSTRY TODAY
3.1. Will Medical Genetics Evolve To A Consumer Business?
The “Distribution Revolution”
3.2. Direct-To-Consumer Genetic Testing Companies
Industry Segmentation Today
Law Enforcement/Forensics
“Recreational Genomics/Genetics
Ancestry/Genealogy Testing
Personal Traits
Nutritional Genetics/Genomics
A Dynamic and Fluid Marketplace
3.3. For Personal Genomics, Myriad Genetics Helps Set the Stage
3.4. Direct-To-Consumer Genetics and Genomics: Personal Genomics Companies
Launched in November 2007
New Genome-Scan Entrants Celebrated Their First Birthday in November 2008
23andMe
Navigenics
deCODEme
Knome
3.5. Other DTC Genetic Testing Companies Debuted a Little Earlier, With Less
Fanfare
DNA Direct
Other Genetic Testing Companies Abound
Chapter 4
UNDERSTANDING CONSUMERS…THE BIGGEST VARIABLE IN THE PERSONAL
GENOMICS BUSINESS EQUATION

6. 4.1. A Survey Sampling: Attitudes about Genetics, Genomics, and Genetic Testing
Among Different Consumer Groups
Burrill & Company/ChangeWave Research’s Personalized Medicine and Wellness Survey,
May 2008
Cogent Research’s “Cogent Genomics Attitudes and Trends” (CGAT) Survey, 2008
4.2. Consumer Segmentation: Sorting the US Population by Opinions, Attitudes,
and Values Regarding Use of Genetic Information for Health Optimization
4.3. Physician Market Research: Important, But Still Limited
4.4. The Bottom Line Derived From Preliminary Research
Chapter 5
THE BUSINESS OUTLOOK FOR DIRECT-TO-CONSUMER GENETIC TESTING
5.1. Rapid Technology Change
The Archon X Prize
The Race to Commoditization…The $1,000 Genome
Information Overload: So We Can Sequence an Entire Human Genome…Now What?
5.2. Likely Regulation
5.3. An Uncertain Future with Consumers
5.4. Will Consumer Genomics Be a Means to a Different End?
Chapter 6
EXPERT INTERVIEWS
6.1. Linda Avey, Cofounder, 23andMe, Mountain View, CA
6.2. Mari Baker, Chief Executive Officer, Navigenics, Redwood Shores, CA
6.3. George Church, PhD, Professor of Genetics, Harvard Medical School, Director, Lipper
Center for Computational Genetics, Boston, MA; Founder, Knome, Cambridge, MA
6.4. Fred Ledley, MD, Professor and Chair, Natural Sciences Department, Bentley
University; Founder and Chair of My Genome
6.5. Gilbert Leveille, PhD, Executive Director, Wrigley Science Institute, William Wrigley Jr.
Company, Chicago, IL; Scientific Advisory Board Member, Sciona, Aurora, CO
6.6. Ryan Phelan, Chief Executive Officer, DNA Direct, San Francisco, CA
6.7. Dietrich Stephan, PhD, Cofounder and Chief Science Officer, Navigenics, Redwood
Shores, CA
6.8. Peter Vitulli, Chief Executive Officer, Sciona, Aurora, CO
6.9. Christy White, Founder and CEO, Cogent Research, Cambridge, MA
Appendix A
RECOMMENDED NEWBORN SCREENING TESTS FOR US BIRTHS
Appendix B
GENERIC COPY OF CALIFORNIA DEPARTMENT OF PUBLIC HEALTH’S “CEASE-AND-DESIST”
LETTER SENT TO 13 GENETIC TESTING COMPANIES
Appendix C
SELECTED COMPANY PROFILES
23andMe
Management Summary and Board of Directors
Company Vision and Mission

7. Genetic Testing Services
BioMarker Pharmaceuticals
Company Description
Products and Services
Dietary Supplement Products
Management Team
Board of Directors
Scientific Advisory Board
Technology Platforms
Consumer Genetics
Company Description and Mission
Management
CyGene Direct (CyGene Laboratories)
Background and Description
Mission and Vision
Products and Services Offered (since 2006)
Management
Technology Developments
Alliances
Scientific Advisory Board
Financial Summary
deCODE genetics
Company Description
Recent Scientific Developments
Financial Summary
DNA Direct
Company Description
Mission
Business Model
Company Standards and Criteria for Offered Tests
The Test Purchasing Process
Privacy and Security
Investors
Management
Services Offered
Other Company Initiatives
Board of Directors
Medical Advisors
Genelex Corporation
Company Description
Company Mission
Products and Services
Awards and Recognition
Company Licenses
Management

8. Other Products Offered
Knome
Company Description
Partnerships
Management and Advisors
Technology
Products and Services
LabCorp
Company Description
Management Team
Board of Directors
Genetic Testing Capabilities
LifeCode
Company Description
Navigenics
Company Background
Management
Mission and Vision
Genetic Testing Services
Other Information
Navigenics’ Clinical Advisory Board
Navigenics’ Scientific Advisory Board
Navigenics’ Genetics Counseling Task Force
Navigenics’ Policy and Ethics Task Force
Sciona
Company Description
Investors
Products and Services
Management
Technology
Board of Directors
Scientific and Business Advisory Board
Current Research Collaborations
SeqWright
Company Description
Mission
Products and Services
Overview of Genomic Profiling Service
Professional Staff
Scientific Advisory Board
Regulatory Compliance

9. Smart Genetics
Company Description
Mission
Management Team
Board of Trustees
Expert Advisors
Product Offerings
Suracell
Company Description
Management and Advisory Team
Product Lines
Partnerships
Financial Summary
References
Company Index with Web Addresses
List of Figures
Figure 2.1. Direct-To-Consumer Genetic Testing: Challenging Traditional Business Models
Figure 2.2. U.S. Department of Health & Human Services Organizational Chart
Figure 4.1. The Health Managment ModelTM
List of Tables
Table 1.1. Myriad Genetics: Genetic Testing Launch Timeline
Table 1.2. Current Applications of Genetic Testing in Medicine
Table 2.1. DTC Genetic Testing Companies In Receipt of Advisory Letters from the NY
State Department of Health
Table 2.2. California Issues Cease-and-Desist Orders to 13 DTC Genetic Testing
Companies in June 2008
Table 3.1. Genetic Testing and the Internet Foster a „Distribution Revolution“
Table 3.2. Companies Selling Genetic Tests Directly to Consumers Identified Online (as of
February 2009)
Table 3.3. National Society of Genetic Counselors’ Direct-to-Consumer Genetic Testing
Recommendations
Table 3.4. American College of Medical Genetics’ Direct-to-Consumer Genetic Testing
Guidelines
Table 5.1. Representative Next-Generation Sequencing Companies
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