In 2017, when we first began this journey, the idea of using blockchain to help secure and monetize individual genomic data ownership for research was still novel. We are proud to have paved the way for a flurry of imitators who have emerged since then. Few have persevered as we have to reach both the launch of a full version 1.0 (we did in November 2018) and have a path forward for continued growth and success, preserving meanwhile our commitment to a democratic business model benefitting individuals and researchers above all. As 2020 begins, we continue to lead the way. Growth of the sort we feel is reasonable and profitable remains on the horizon, and we are prepared to get there, even while the numbers we sought this past year eluded us.
How far we’ve come
In a year and with just a few thousand dollars spent testing direct advertising for our product, we have achieved a user base of about 1100 who have uploaded 767 files that have been purchased 175 times for an average of 15 USD each. This testing gives us excellent insight into how to reach and convert new users, and is providing us with solid data to use as we now pursue a Series A round to significantly grow our user base. This past year we have made strides in the direction or growth, strengthened partnerships, honed our strategy, and developed an understanding of the marketplace that can move us forward and keep us in the lead for the foreseeable future.
In 2019, our new partnerships with Murietta Genomics and the TPA Network, and more recently with Amchart, have all been aimed at growing the user base in the genomic data space. Our calculations based upon the past year of experience demonstrate that at the 50,000 user level we will be profitable and self-sustaining, able to take advantage of profits to continue our consumer-growth strategy. Murietta Genomics is a startup incubator in southern California with ties dating back 20 years to the genomics industry there. We are working closely with them to make further deals to get their own startups using the Gene-Chain where it is consistent with their business models and ours.
TPA Network is a consulting company focused on the “Third Party Administrator” market. Their research consortium will begin to investigate and get empirical evidence for what everyone thinks is the case regarding the usefulness and cost-effectiveness of providing genetic testing, primarily and initially for pharmecogenomics, to the client-employees of self-insured employers. TPA Network has a reach based upon decades of experience in the field to several million potential subjects/customers and is focusing their study on a small subset of 100000 employees in their networks. Once the study is fully funded, our memorandum of understanding with TPA Network ensures us their users’ participation in our platform over about 30 months. Critical to the study’s hypothesis is the understanding that by monetizing the data generated, there is certain to be income to offset the costs of testing. As the only company offering that already, we are a valuable part of this study.
More recently a nascent cooperation with Amchart is intended to explore how the two companies can share users and data to accentuate both platforms. We will continue to explore this more deeply, as well as other partnerships in development with the attendees of this event in Austin this coming February at which our CEO, Dr. Koepsell will be lecturing.
The state of the market
The genomics market shows signs of cooling in general and this has impacted competitors and non-competitors alike. Illumina, the manufacturer of testing kits for the big direct-to-consumer genetic testing companies like 23andMe and Ancestry, recently cut their forecasts based upon a slowdown in the DTC testing market. Privacy concerns and the lack of a clear medical use for DTC testing may well account for the current slowdown, and we see this as an opportunity. No one else is poised as we are to cater to the current state of the market. The 30 million people who have already bought tests and wish to take control of that data, as well as perhaps make a bit of money on the side, are still our primary advertising-target market. It costs them nothing and can actually earn them money if they take their data and upload it. We know how to target these users based upon our testing this past spring, and will use the money we raise from our current Series A round (seeking 1.5 million USD) to gain the 50000 users we need to be profitable, in addition to the free users we expect to gain from our partnerships.
The slowdown has hit our competitors as well and we are confident that because of the state of our platform, which is fully functioning and efficient, we will remain in the lead as the only company offering blockchain-powered privacy and monetization of genetic data. Our two main competitors, neither of which ever offered as great a share of profits to their users (and in some cases changed their policies to require a subscription), are clearly trying to adjust to changing conditions as well. While we never believed that competiton was bad for our business as indeed users can choose to put their data on all of the various platforms at once, our first-mover advantage and business strategy as an open marketplace have largely been vindicated and mean we can weather the slowdown, take advantage of it, and continue to move forward indefinitely. We also continue to offer partnership and cooperation with any and all competitors who wish to give their users the benefit of payment for data with $DNA.
Nebula Genomics, founded by and partnered with Veritas Genetics (they share a co-founder), has yet to release its full platform, and has lost access to the (presumably discounted) testing provided by Veritas which has shuttered its operation in the US. They also appear to have deviated from or abandoned their ambitious white paper and contracted to third-parties for their privacy features. We are interested to see how they ultimately adapt and gain users, and hope they find a way forward as a worthy competitor in the space we pioneered.
LunaDNA’s most recent SEC filing indicates shares based upon user data valued at about 3800 USD. Based upon their filings, which show they issue 50 shares per file at a valuation of about 3.80 USD per individual, this means Luna has reported expenses of about 300,000 USD to get fewer users than we have, with each user making significantly less money, and none of whom have a path to cash in their shares at this point. Moreover, neither LunaDNA nor Nebula have published a blockchain browser for anyone to use to see current activity. Our users can always check http://explorer.encrypgen.com to see ongoing activity. It will be interesting to see if Luna, who can only pay users in the US for their data, will find a viable means of growth.
Our own operations can continue indefinitely for the foreseeable future, with or without additional funding, although we will certainly be able to increase the rate of customer adoption as we gain capital.
Future (still) so bright
Because of our focus on platform development, efficiency, decentralization, and customer empowerment, we are poised to grow as the genomics market in general settles and finds its footing. We do believe that routine genetic testing will become a part of healthcare in the long run and have built our latest product to help facilitate this. Our B2B product, https://business.encrypgen.com was built on Azure as part of our Microsoft Startup partnership. This product allows companies who are self-insureds to invite their employees to create an account (which is a revenue source for us) by which they can invite and choose to subsidize at various levels their employees to buy genetic testing from one of our partners, initially through our partnership with Genomics Personalized Health. This product is live and will be launched and listed in the Microsoft Store early in the new year.
As well, our Active Studies program began working with data brokers like Sano Genetics to help find subjects willing to take part in studies (earning in some cases several hundred dollars), and also to put their data on the Gene-Chain. We continue to seek other researchers and partners to take advantage of this program.
Genomics, as a science, will only succeed with more research. It holds tremendous promise for helping us understand our health and development, and treating us more efficiently and in the way that prophets of personalized medicine predict. Our Gene-Chain is, we think, a democratic, fair, and ethical means to help achieve those ends. While DTC genetic tests are not yet terribly helpful for improving our health, they hold data that can help us better achieve that, and our partnerships and plans for whole genomic data testing will certainly be instrumental for both the scientific and medical promise of genomics.
We thus remain focused for now on the 30 million users of direct-to-consumer genetic testing who we hope decide they want to take charge of their data, put it on the Gene-Chain, and better secure its privacy as well as monetize it to earn $DNA. Tell your friends who have done their tests to give us a try and join us on our path to this future.
Some press for EncrypGen in 2019: