What Is Pharmacogenomics?

In the 1967 movie, The Graduate, 20-year old Dustin Hoffman comes home to Los Angeles and is advised by a family friend , “I just want to say one word to you – just one word – ‘plastics.’” The advice – smack in the middle of the Vietnam War and the age of disillusion was seen as a cynical commentary of the times. In 2010, a more rational and real advice to a Dustin Hoffman-like graduate for a real future would be “Pharmacogenomics.” The convergence of the life sciences, information technology, high-speed computation and genomics has created a unique industry that may well be among the most attractive investment opportunity for investors today. And it has many committed entrepreneurs involved – entrepreneurs who have left other callings to focus on ways to make drugs more efficiently and effectively. In 1996 Icelandic neurologist Kari Stefansson left his position as a professor of Neurology, Neuropathology and Neuroscience at the Harvard Medical School in Boston to return to Reykjavik and launch deCODE Genetics. In the decade and a half since its launch, deCODE has become a global leader in analyzing and understanding the human genome. Using its unique access to Icelandic health data deCODE has discovered key genetic risk factors for dozens of common diseases ranging from cardiovascular disease to cancer. deCODE went public in 2000, the last of the major genomics companies to do so. But in recent years it got whipsawed by a market that looked the other way and the problems of the biotechnology industry itself. Late last year Polaris Ventures and Arch Venture Partners, two of the early venture investors in deCODE, engineered a buyback of the company and took it private. Stefansson continues to head deCODE’s research and introduce a slew of new products and services. In 2001, Stephen Friend sold Rosetta Inpharmatics, a genomic analysis company to Merck for over $600 million and went to work for the pharmaceutical giant as a senior researcher. Last year he left Merck to launch Sage Bionetworks, a non-profit biomedical research foundation with a mission to coordinate and link academic and commercial biomedical researchers through a “Commons that represents a new paradigm for genomics intellectual property, researcher cooperation, and contributor-evolved resources.” Sage wants biologists to start sharing their data in a free, open database, so they can pool their brainpower to come up with insights that one person, or team, never would discover in isolation. The ultimate result would be more accurate models and more effective drugs. Pharmacogenomics has also became a calling for Alnoor Shivji, the co-founder of Wafergen Biosystems, a Fremont, Calif company that is making a real time polymerase chain reaction (RT-PCR ) system for use by researchers in genetic analysis for the life science and pharmaceutical industries. The Wafergen system has the potential to accelerate RT-PCR detection 20x and overall times 20 to 30x, says Shivji. More important, it has the capability of transforming the industry’s R&D timetable as it now stands, adds Shivji. Shivji, born in Tanzania, co-founded Cyras Systems and served as its President and CEO until it was acquired by Ciena for $2.6 billion in March 2001. He also co-founded Fiberlane Communications, a networking communications company that split into Cerent (acquired by Cisco for $7 billion) and Siara Systems (acquired by Redback Networks for $4.3 billion). But then personal tragedy struck. Shivji’s young cousin died of a heart attack with no visible symptoms. In 1980, his mother had died of breast cancer. Shivji felt that with early diagnosis and targeted therapy, her life could have been prolonged. So, after the death of his cousin, Shivji resolved to apply his systems and software expertise in the life sciences hoping to have an impact in addressing some of the difficult diseases with early detection and targeted therapy. Shivji began attending health care conferences in order to get a better sense of what the needs were and what the solutions could be.”One of the most persistent refrains from pharmaceutical executives and life science researchers was how convoluted the drug diagnostic process was, how the failure to create a more sophisticated system was delaying drug development,” he explains. The other consideration was the idea that targeted therapy based on an efficient molecular drug diagnostic tool (companion drug and diagnostic) would lower the cost of drug development and benefit not just patients in the developed countries but in developing countries in Asia and Africa. Shivji felt that he could help most by working with computational and genetic researchers in creating faster diagnostic tools. So with co-founders Victor Joseph and Amjad Huda he launched Wafergen, funding it himself and with some venture funds. Wafergen, which went public through a reverse shell in 2007, has raised $38 million to date. Wafergen has recently launched its game changing genetic analysis platform SmartChip after a successful early access program with ten customers including key academic institutions, university hospitals, and a pharmaceutical company. Shivji hopes Wafergen’s genetic analysis solution to have an impact in drug development and molecular diagnostics ultimately addressing difficult diseases with early detection and targeted therapy. Is there a demonstrated need for companies such as deCODE and Wafergen? In mid August, Life Technologies, a major biotechnology tools company, purchased Ion Torrent for $375 million. Ion Torrent, founded in 2007 by Jonathan Rothberg, makes low-cost DNA sequencing machines. Another sequencing company, Complete Genomics raised $39 million in August in Series E financing. Pacific Biosciences, waiting to go public, already has over $400 million in venture capital.