Genome Sequencing Cost 2001-2012

Interesting the genome has gone down dramatically since 2001 and most likely will continue to go down. The  big decrease seemed to come after 2008 and I suspect will be very affordable within the next 10 years and perhaps just another test that the doctor does. As more genomes are sequenced we can compare them, look at them over time, and see how they change to get cancer, diseases, and other illnesses along how they repair. It is amazing how the free market works when people get greedy and want to serve their fellow man.

Gene Sequencing and Value Creation

Lately, I have become interested in the genome and genetics. In an earlier blog post I talked about biotech and how I felt it was some sort of bubble. I still think it could be for the short term but a boon for the long term. In the 1990’s tech companies were short term bubble yet today we enjoy all the benefits created in that era even if companies went out of business. Biotech and genome companies I believe will go through the same thing. Companies in this industry are relatively young and the industry itself isn’t mature.

One important distinction I learned is that gene sequencing is a process that takes a vast amount of information on a individual’s DNA and can be stored but really isn’t meaningful. Since DNA is just a string of letters there really isn’t any value in the genome being sequenced. The true value comes from understanding mutations, variants, and commonalities with other people. The real value of an invention comes by its use. Companies like 23andMe scan genetics and these tests are only a few hundred dollars. However, 23andMe is only scanning .02% of the genome. Companies like Knome, Illumina, Complete Genomics, and others are trying to sequence the full genome. These companies are sequencing the whole genome. The whole genome has six billion letters. It will only be meaningful and valuable if we understand what letters are missing if you have cancer or some serious illness. Many people will have to get their genome sequenced in order to figure out patterns in the genome. Companies like Knome and Illumina provide analysis of the genome but the cost can still be thousands if not tens of thousands of dollars. Knome is offering whole genome sequencing with functional interpretation for around $5,000. Clearly, over time sequencing will only get cheaper and one day may be regularly going to the doctor. However, it will only become more valuable once people get it done and scientists look the genomes of millions of people in order to figure out if anything can be learned. I think of the internet or phone. The phone or internet would not be very valuable if let’s say you have one and no one else does because then you can’t communicate or talk to anyone. However, once other people get phones and computers the value rises exponentially.

Once scientists start studying genomes and figuring out what letters are associated with different diseases they could try different therapies and see which ones worked on people with similar traits. Drug companies could figure out how to target people with certain genes or traits. Once we get this knowledge we will be able to make better decisions and know even more about ourselves than ever before.