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Why Sophisticated Genetic Testing via Internet Sources is a

Direct-to-Consumer Trend

Trisha Brown, M.S., C.G.C.Vice President, Clinical Affairs

DNA DirectMay 14, 2008

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Agenda

• The Trends

• The Consumers

• The Companies

• Regulatory Environment

• Opportunities for Labs

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Genetics is receiving increased media attention

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“DNA” has become part of the common lexicon

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Technology costs are rapidly dropping

http://www.ornl.gov/sci/techresources/Human_Genome/project/whydoe.shtml 6

Genetics is redefining common disease

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Genetic services companies are attracting investors

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Social networking for the “MySpace” generation

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Growing consumer interest in genetics

• 2007 survey of 1,199 Americans over age 18 support genetic testing– 93% for research– 93% for reactions to medicine– 91% for diagnosis when treatment available– 86% to find out risk of serious disease in

offspring– 79% to determine disease risk when no

treatment exists

http://www.dnapolicy.org/resources/GINAPublic_Opinion_Genetic_Information_Discrimination.pdf

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Consumers have privacy concerns

• 92% of Americans surveyed are concerned that genetic test results could be used in a harmful way

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There are barriers to accessing genetic testing

Physicians Lack Genetic Expertise

NEJM study revealed that physicians struggle with

management of genetic tests

NEJM study revealed that physicians struggle with

management of genetic tests

100K patients

175 drs.

1 Geneticist

Shortage of Genetic Experts

For every 100K patients, there is only 1 genetic expert

The Impact On Patients:Limited access and awareness of appropriate genetic tests

Receive data rather than information from genetic tests12

Agenda

• The Trends

• The Consumers

• The Companies

• Regulatory Environment

• Opportunities for Labs

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What is “Direct to Consumer?”

• Direct Access Testing (DAT): patient orders a lab test directly from a lab without a physician involved

• Direct to consumer marketing: Marketing messages to consumers, but physician order still required

• Patients are consumers

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The typical consumer seeks DNA Direct’s services because of a medical concern

More than 10% have a known family mutation

More than 50% have a personal or family history

Some lack access - either no genetic services in their region or their doctor didn’t see value in testing

Some seek convenience and anonymity- prefer testing at home and counseling by phone v.s. in-office visits

About 40% test positive

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Customer inquiries: The Worried Well

“dear mr.or miss

we would like to know every thing about our dna.Whatkind of disease we are liable to. So please send us a procedure how can we contact to you or what we have to do.

Many regardsK.M.”

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Customer inquiries: The Well-Bodied

“I am interested in getting my DNA tested for the reason of finding out if I come from Jewish Decent. My grandmother was Italy so I know very little of her family lineage, and because Jewish lineage goes through the mother I really would like to know if I am jewish. What testing should and can be done to accurately find this out for me?”

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Customer inquiries: The Rightly Worried

“I am trying to find out a couple of answers to some questions regarding inheritance of the gene for CF.I have a grandson who may or may not have it. My son was tested twice, the first test came back negative for 93%, the second came back as negative as well for the rest. My daughter-in-law is a carrier. The Doctors are saying there is a chance that my grandson is inflicted with the disease. They say Mom's gene could have multiplied so that there are two genes. Is this possible? We are looking for any help you may give us”.

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• Curious about technology but not worried about their health

The Rightly Worried

The Worried

Well

The Well-Bodied

Our view of the market for genetic testing

• Worried about their health and willing to spend $$ for prevention

• Medical or family event that indicates increased risk

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Agenda

• The Trends

• The Consumers

• The Companies

• Regulatory Environment

• Opportunities for Labs

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Business Models

• Pay per test (lab and access fees)

• Pay per service (phone consultation, web reports)

• Subscription service (come back for updates)

• Build a social network

• Advertising

• Data repositories

• Products (diets, vitamins, cosmetics)

Fee-For-Service Monetize Traffic

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Not all DTC genetic tests are the same

Clinically Valid

Lack of clinical validity

Covered benefit Chromosome test

In medical guidelines sDNA for co.cancer screen

Thought leader recommends PGx for warfarin

Strong science APOE for Alzheimer’s

Late research Prostate cancer

Early research Baldness

Nutrigenomics Diet advice

Dermatogenetics Wrinkle cream

Genome Scans

Whole Genome Sequencing

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Not all DTC services are the same

Quality

Controversial Quality

Professional/clinical Physician oversight and authorization, genetic counseling, informed consent, family and medical history review, transparency of clinical validity

Genome scans Genetic counseling, risks in context with family history, transparency of science

Information only

Tailored products Focus on selling products (nutrients or cosmetics)

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Based on Genetic Test Results

Customized to family & medical history

Embeds lab report, physician letter & family letter

25 - 50 pages depending on test & result

Provides access to additional resources

Helps user build an action plan for next steps

1-800 genetic counseling phone support

DNA Direct sample report

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• Customized to family and medical history

• Explanation of risk at patient’s education level

• Embeds lab report, physician letter, family letter

DNA Direct sample report

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DNA Direct sample report

• Checklist of detailed next-steps

• Access to supporting tools and resources

• Tools for continued decision support

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29www.genelex.com as accessed on 5/8/2008

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http://www.sciona.com/ as accessed on 5/6/2008

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http://www.suracell.com/ as accessed on 5/8/2008

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Agenda

• The Trends

• The Consumers

• The Companies

• Regulatory Environment

• Opportunities for Labs

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Growth of tests raises alarms

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Increasing clamor for greater regulation

“Marketing of unproven genetic tests a threat to public health”

April 2008

Secretary’s Advisory Committee on Genetics, Health and Society

“The FDA should address all laboratory tests, regardless of how they are produced (ie, commercial kit or laboratory developed test)………because it will be increasingly difficult to distinguish genetic testing from other complex laboratory testing, we chose to apply a number of our recommendations to laboratory tests generally.”

April 2008

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A laboratory is defined to be a facility that performs certain testing on human specimens in order to obtain information that can be used for the diagnosis, prevention, or treatment of any disease or impairment of a human being; or the assessment of the health of a human being; or procedures to determine, measure or otherwise describe the presence or absence of various substances or organisms in a human body (42 C.F.R. sec. 493.2.).

CLIA

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What some companies say……

“DeCode CEO Kari Stefansson emphasized at the time of the firm’s launch of the DeCodeMe service that it is not offering a genetic test. “We strongly encourage you not use this to make medical decisions,” he said during a webcast”. GenomeWeb News April 18 2008

Anna Vitebsky, Consumer Genetics' product manager, said she did not believe the company had to comply with the state law that requires a physician to order the tests because the company doesn't offer diagnostic tools. She described the services as "fun well-being tests" that do not involve disease testing or a medical diagnosis. SF Chronicle April 24, 2008

http://www.consumergenetics.com/home.php as accessed 5/6/2008

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Ordering tests

• States regulate who can order a lab test– Varies by state. 25 states permit DTC without

restriction, 12 permit for certain categories, and 13 prohibit entirely

http://www.dnapolicy.org/news.release.php?action=detail&pressrelease_id=81

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FDA

• Oversight of medical devices and kits• Plan oversight of “high risk tests”• IVD-MIAs• Through the FD&C act has authority to

regulate cosmetics• FDA can regulate vitamins and

supplements considered to be treatment for disease

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Agenda

• The Trends

• The Consumers

• The Companies

• Regulatory Environment

• Opportunities for Labs

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Opportunities for Labs

“ASCLS supports the consumer's right to have unfettered access to their own medical information and to clinical knowledge in a manner which he/she can understand. ASCLS supports the role of certified clinical laboratory scientists in the development of a DAT program. “

http://www.ascls.org/position/index.asp as accessed on 5/6/2008

Consumer driven access is here to stay

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Opportunities for Labs

• Capitalize on consumer interest in genetic tests– Ensure providers and their patients have resources

to help them understand the utility of your test and how to obtain it

– Evaluate partnership opportunities with genetic services companies

• Facilitate the ordering of genetic testing– Provide educational material for physicians and

patients that is easy to access– Clinical utility and scientific validity of test should be

transparent and help providers order the right test– Experts should be available for pre-test consultation

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Opportunities for Labs

• Make lab reports understandable for physicians and patients– Provide a comprehensive, easy to

understand result interpretation

– Provide decision support tools to aid in pre-test and post-test education

– Provide experts for consultation

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What To Avoid

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• Media attention and consumer interest will continue to fuel direct-access genetic services

• As the market matures and the regulatory framework evolves, “winners” will emerge in the genetic services market

• Labs are in a unique position to provide solutions and bridge gaps

• Labs can capitalize on consumer interest in genetic testing by working with providers to provide consumer-friendly resources

In Summary