The global genomics market size was estimated to be around $12 billion in 2016, and it’s been forecasted to reach $23.88 billion by 2022. When you consider the rate at which the cost of sequencing a genome is falling, it’s easy to understand why the number of people getting their DNA tested is increasing exponentially. With greater amounts of valuable data come increased security risks, but it also presents a number of very exciting opportunities. One blockchain startup is poised to reduce the risk and maximize the opportunities for consumers who have had their DNA tested and for research labs that are willing to pay to study study that DNA data.
Clinical research uses for genomic data have been destined for rapid growth ever since the Human Genome Project fully sequenced a human genome in 2003. The total cost at the time was a staggering $2.7 billion. Fast-forward to 2018, and it’s now possible to fully sequence a human genome for less than $1,000, with the cost expected to drop much further as technology improves. This dramatic reduction in testing and sequencing costs has resulted in far more DNA tests being carried out, and it has made using mass quantities of genomic data for scientific research a much more regular practice. Needless to say, scientists and health care professionals are learning so much more about genetic diseases and how to treat them than ever before.
Consumer DNA testing companies like 23andMe, AncestryDNA and others have been given the all-clear by the FDA to help customers learn a lot more about themselves through do-it-yourself DNA tests, which has resulted in an incredible growth in consumer purchases of these test kits. In 2017, it was reported that market leader 23andMe had a customer base of around 2 million, up from 500,000 just a couple of years prior and in 2018 have soared past the 5 million mark.
The growth of 23andme and its immediate rivals has raised awareness of the benefits of having your DNA tested. These tests can not only tell an individual about their ancestry, but they can also reveal genetic related health information such as an individual’s likelihood to eventually suffer from a genetic disease such as Alzheimer’s or Parkinson’s Disease.
The larger result of more people having their DNA tested is that there is a much larger and more diverse number of genomic data sets that can aid in research to advance scientific discoveries that will deliver more efficient and effective treatments. Make no mistake about it, a market of buyers, namely big pharma labs and other researchers, have taken notice of this rapidly growing pool of genomic data sets and they are willing to pay for them. In the case of the larger testing companies, we now know that selling their customer’s DNA was part of their business plan all along. Nothing illustrates that better than the $300 million dollar deal between drugmaker, GlaxoSmithKline and consumer DNA testing company 23andMe. This deal grants GSK exclusive rights to 23andMe’s database for 4 years which is certainly good for both parties, but what about the rest of the scientific research community and more importantly, what about the rightful owners of that genomic data 23andMe is selling?
23andMe customers paid to have their DNA tested, and ultimately became the company’s data supplier, but won’t receive one penny of the $300 million. That alone has upset a lot of people, but there is even greater cause for concern. According to 23andMe, the average customer’s DNA is used in 200 research studies. The scary part is that the customers have no idea where, when or how their most private and valuable data is being sent and stored. Collectively, the selling of customer data without compensation and the transfer of data without customer notification has sparked a revolution in the genomic data industry. While there are a number of startups addressing these issues, the consensus among these next-gen companies is that the solution lies in blockchain.
The main advantages to using blockchain stem from the fact that it is an immutable ledger, transparent to all on the network who are authorized to see it. Furthermore, since the data is strung across the network of computers supporting the blockchain, there is no central server for hackers to target. This means it’s far more difficult for cyber-criminals to steal data. When you consider the amount of high-profile hacks into traditional databases, it’s little wonder that so many businesses and customers are excited about the security aspects of blockchain.
The decentralized nature of the blockchain also facilitates peer-to-peer transactions without the need for banks or any centralized authority. Obviously there are many business applications where one party may act as the central authority to provide, manage and support business operations, but even in those cases blockchain offers a faster, more efficient and more secure mechanism to execute peer-to-peer transfers and transactions.
Some of the biggest issues plaguing the genomic data industry right now stem from concerns about data security and what some consider unethical practices of selling customer data for mega-profits. As genomic data becomes cheaper and more valuable to sequence, it has been suggested that the repositories of this data could be the next targets for cyber-criminals. The sensitivity of genomic data means a data breach of this sort could potentially be more harmful than the loss of financial data.
The ever present threat from cyber criminals is only part of the problem. The fact that some of the big consumer DNA testing labs have sold their customers’ DNA data multiple times and provide the data owner no record of where or how securely their most private and valuable data is being stored so the rightful data owner could never revoke the right for them to use or resell it. This not only has huge security implications, but it also has tremendous financial implications because the testing companies that are making millions off of their customers to test their DNA are turning around and making hundreds of millions more from selling the data repeatedly without giving the data owner…er, customer AND supplier a dime of the revenue.
The more data there is available to study, the more doctors and scientists can learn to help identify, treat or even prevent illnesses and diseases. The development of what’s been termed precision medicine is very valuable for researchers and pharma labs, so much so that a multi-billion dollar market is erupting around it.
EncrypGen Founder and CEO Dr. David Koepsell, is an author, ethicist, and attorney. He’s written several books centered around ethics, intellectual property and cyber technology including Who Owns You? The Corporate Gold Rush to Patent Your Genes. The book is comprehensive exploration of the numerous philosophical and legal problems of gene patenting and calls for public attention and policy changes to end the practice of gene patenting. Koepsell was able to affect those policy changes by arguing the case in front of policy makers and practitioners. In 2013 The U.S. Supreme Court validated Koepsell’s stance by ruling that human genes could not be patented, but Koepsell has not stopped advocating for the rights of genomic data owners. He saw major problems associated with the testing company model of selling customer data and transferring it potentially hundreds of times without compensating the rightful owners of the DNA or providing a record of who has access to it. “DNA data owners should have control over their most private and valuable data and if they choose to share it with researchers to advance medicine, they should be compensated for it”, states Koepsell.
With their mission defined, Dr. Koepsell and his co-founding wife, Dr. Vanessa Gonzalez Covarrubias, a genetic scientist researching pharmacogenomics, launched EncrypGen, the first of a handful of new startups focused on providing solutions for both individual DNA data owners and the scientific research community interested in buying a diverse range of genomic data profiles. Koepsell and his team determined that blockchain technology could provide an immutable ledger of all transactions and they created an ERC-20 based cryptocurrency, aptly named the DNA token, to facilitate cross border, peer-to-peer payments between buyers and sellers in a first of its kind genomic data marketplace. The development team also programmed the platform to de-identify the genomic data, by separating DNA data profile owner’s identifiable information from the raw genomic data that’s uploaded to the platform.
EncrypGen’s Gene-Chain marketplace (currently in beta, and launching Q4 2018) allows DNA data owners to sell their de-identified genomic data directly to pharmaceutical companies and other scientific research projects interested in their profile in exchange for DNA tokens, which are available on a number of public cryptocurrency exchanges. Unlike the DNA testing company model, at EncrypGen the DNA data owner controls everything. Should they choose to share their data with research studies they and only they have the right and control to do so. They can even name their price. “In the world’s first blockchain powered genomic data marketplace EncrypGen connects DNA data sellers with DNA data buyers in an ecosystem that all parties benefit from”, added Koepsell. EncrypGen takes a small transaction fee for using the marketplace, facilitating the deal with the DNA token and logging the transaction on the immutable blockchain ledger.
Koepsell and his team believe that this solution will encourage more people than ever to get their DNA tested to not only to discover ancestry and benefit their own health, but also offer it to scientists to aid in advancing medical research, while making some money every time they do it.