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Genes 'R' Us: The new dot-coms?

Image: DNA
The apparently sudden appearance of companies that want to test your DNA for recreation, disease or whatever is a small, staid affair in comparison to the dot-com boom. Yet, is the genetic-testing industry set to take off?Adrian Neal
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When I moved to San Francisco in 1997, Silicon Valley was in the midst of the dot-com frenzy. Coming from the far less-hip East Coast, I marveled at what seemed to be a Peninsula-wide psychosis.

Sure, the Internet sizzled with possibilities, but the promises being made and the business plans being proffered seemed more often nutty than not — an assessment that led more than one dot-com true believer to inform me that I just didn't get it, whatever "it" was.

Still, it was a heady moment for technology. Hundreds of startups participated in a culture-shifting, multibillion-dollar experiment to see what businesses would work online.

At the time I likened it to World War I, when radical new technologies for killing people were tested by sending legions of 18-year-olds to the front to step in front of them. Millions were killed while generals and politicians figured out what worked.

A brutal comparison, perhaps, but I do recall what seemed like legions of 28-year-olds being given millions by investors to set up everything from online designer-kibble stores to portals offering empowerment for the oppressed.

At ground zero here in San Francisco, much of this money seemed to go to some fabulous parties, Foosball tables, and Razor scooters for every employee, and a good time was had by all.

The apparently sudden appearance of companies that want to test your DNA for recreation, ancestry, disease, and criminal culpability is a small, staid affair in comparison. Investors are pouring in millions instead of billions, and there are virtually no parties. Even the toolmakers that make the sequencers and create the software to analyze genes have an aggregate market value of less than $1 billion.

The question is, are we seeing the early stages of what will become a new flurry of companies rushing to the genetic front lines to see which business plans and technologies work for potential consumers of DNA?

Already, early leaders in one subset of the industry, the direct-to-consumer online genetics companies, are experimenting with different approaches to selling you information on what is hidden in your DNA.

Google-backed 23andme down the peninsula from San Francisco is mixing serious genetic markers associated with dread diseases with "recreational genetics" — finding out about "fun" traits such as caffeine-resistance and preference for evenings.

DeCodeme out of Iceland is offering a slightly more sober site featuring less fun and more on gene markers for disease, many of which their parent company, deCode, discovered themselves.

Both 23andme and deCode offer basic information on genealogical DNA — tracing one's genetic roots and links to ancestors.

Bay-area-based Navigenics will open for business next month with a site devoted to the DNA of disease, with Web-MD-like links to A-list medical institutions and a feature the other two do not have — access to live genetic counselors. Navigenics plans to charge about $2,500, compared with about $1,000 for 23andme and deCodeme.

Other companies such as DNA-Direct of San Francisco offer a test-by-test service, charging from the low hundreds to the low thousands of dollars for tests. They include Food and Drug Administration-approved diagnostic tests for, say, breast cancer.

None of the markers offered by the others are F.D.A.-approved, and the sites take great pains to insist that their tests are informational, and not medical diagnoses.

Many more companies exist on the Web, including those devoted to just genealogy, paternity, and nutrition. A few of these in this largely unregulated space have attracted the attention of authorities in Europe and the U.S.

In 2006, a document issued by the F.D.A., Federal Trade Commission, and the Centers for Disease Control advised consumers to be wary of online nutrigenetics sites that offer dodgy tests intended to sell pricey nutraceuticals — supplements and other dietary products with purported medical benefits.

A huge problem with these sites is that most genetic markers for diseases are incomplete and often not applicable to individuals. [For more information on this see my "Welcome to the Future" column.]

I have a hard time imagining that these companies will reshape (perhaps warp?) my adopted city like the dot-coms of yore. Dot-coms covered the consumer landscape, from shoes and pornography to getting a Second Life, while genetics is a much narrower slice of life.

Also, you need to sequence a person's DNA once, since genes stay largely the same throughout someone's lifetime. There will be no Windows-style updates to genomes, though the analytical tools and programs will improve, and websites will think of ever-edgier and useful ways to tell you about your genes.

None of this is likely to create a consumer-driven information company the size of a Microsoft or Google, generating tens of billions of dollars. However, billions will be made by using genetic information to develop custom drugs and devices.

That process is already beginning with Herceptin from Genentech. This anti-cancer medicine, with revenues last year of $1.3 billion in the U.S., is given only to patients who test positive for a mutation in the HER-2 gene.

Dot-coms may be remembered as the epitome of 1990s irrational exuberance, though of course the Somme-like slaughter of youth largely worked. Online sales of virtually everything have exceeded even the most exuberant forecasts of a decade ago. may be gone, but I can buy almost anything pet-related from might be long gone, but survives.

I doubt that the DNA market will ever be as wild or cool as dot-coms. Indeed, the very first thing that young genetics entrepreneurs — "young" being thirtyish or even fortyish — do to start DNA-testing services is recruit an award-winning Ph.D. geneticist or two and a couple of famous physicians to legitimize their efforts.

This is another barrier to entry. Three guys fresh out of grad school with a harebrained idea aren't going to be taken seriously by investors or customers without connecting up with the establishment, something dot-comers mostly didn't have to worry about.

Personally, as I explore my own genome for a book due out this fall, I'm finding myself mostly confused by the information available. (More on this later.) Even enthusiastic early adopters I have talked to agree that much of the information isn't ready for prime time.

But it will be.

Genetics testing today is about where the Internet was in 1986. Few people have even heard of the technology, but as Bob Dylan once observed, "There was music in the cafes, and revolution in the air."