Tuesday, November 17, 2009

Hey DTC genomics, Stay Private, Stay Alive, Go Public and Die

Today's lesson in start up business in the field of DTC Genomics is this.....

Stay Private and Stay Alive. IPO and doom yourself to a painful and public death.

"When a DTC Genomics bust, what happens to the data?"

Well, someone else can buy it, at a rock bottom price. Hell, the selling company can even violate YOUR TERMS OF AGREEMENT!

Daniel, posts a great email from some sucker who bought DeCodeMe......or maybe just an "Early Adopter"

" there has also been filed with the court an offer by Saga Investments LLC to purchase deCODE's Icelandic subsidiary, Islensk Erfdagreining (IE). IE, which is not declaring bankruptcy, carries out all of deCODE's human genetics work and and provides deCODEme."

So, Saga Investments, a private firm will be taking over in Iceland and likely will be handed the keys to a bunch of genotypes.....

"For this reason, we do not expect this to have any impact on your deCODEme account. As ever, our commitment at deCODEme is to keep you in the forefront of progress in understanding the human genome and what it means for you and your health."

What did this achieve? Well, it took the DTC DeCodeme out of the publicly owned realm. Which is probably a good thing. Let me tell you why.

Publicly owned companies shares are extremely liquid and can be crushed pretty easily, where as rich ol' moneybags (SergeandMe) can keep throwing money into the kitty and outlast this economic downturn and premature launch of these companies, hoping to innovate his way out of this money pit.

This reason is probably why DeCodeme went private and will likely give up control of their data. They need some sucker to keep pouring money into a boondoggle that has no exit for at LEAST the next 15 years if at all.

The moral of the story for start ups is "Stay Private, Lose Investor's Money, Live, Innovate (gulp)"

The Sherpa Says: Now I want to know how many people will file a class action against DeCode for selling the data? Any ideas? Because that could really make the genetic data an unwanted commodity.


Molecular Creativity said...

Decode genetics did publish a lot of genome wide association studies (GWAS), studies that have value but the company failed to make a profit. The GWAS from Decode were/are significant advances in discovery research. I have wondered if the Iceland based genetics is informative for other populations-how unique are the alleles on Iceland compared to how many shared/common alleles? Do we learn about heart disease and diabetes only in Iceland or beyond? Most of these studies explain only a small percentage of disease risk?

Andrew said...

Oh, I don't think you'll ever have to worry about seeing new "DTC" genetic companies anymore. That label "DTC" will be the kiss of investor death for the next decade at least.