Genetic Testing a Chance to Profit From Prevention

by Hilary Kramer | June 5, 2012 9:30 am

Just six months after we flipped the calendars over to the new century, science completed a truly game-changing project: sequencing the human genome. It was such a big deal that the first “rough draft” of the genome was announced jointly by U.S. President Bill Clinton and British Prime Minister Tony Blair.

I remember well how biotechnology stocks were flying like crazy at that time, as everyone expected that this new map would help us discover what makes us tick and lead to medical advances that would both extend life and enhance its quality. It was a question of when, not if.

Here we are 12 years later, and while research continues and advancements are being made, the payoff hasn’t been as fast as many thought it would be. Still, the mapping of the human genome has the potential to be the game changer to end all game changers when it comes to healthcare.

I expect there will come a day when we will walk into our doctor’s office with our personal genetic profile on a DVD, phone or whatever we’ll be storing data on, and our doctor will use that to not just treat our health problems but prevent them.

This fundamental shift from a treatment paradigm to a prevention paradigm is one of the game-changing results of the genome sequencing. We’re already seeing this start to play out as the new health care law signed by President Obama requires insurance companies to cover certain preventive care.

One of the early catalysts for this shift is genetic testing, which has gotten more sophisticated in the last decade. By understanding the underlying genetic basis of both people and diseases, doctors can identify individuals at greater risk of developing diseases, and they can use the information to improve patient outcomes and better manage their care.

In this month’s visit, I have a new opportunity to tell you about in an innovative leader in genetic testing. It’s also time to book our profits in another healthcare stock, Cerner (NASDAQ:CERN[1]).

We have a lot of important things to talk about, so let’s get started with a look at the changes genetic testing is bringing about.

Genetic testing is a subset of molecular diagnostic testing, a new class of tests that identify markers in genes and molecules. These markers are what help determine our risks of developing diseases and how we will respond to available therapies. Molecular tests produce highly accurate results quickly, so they have the potential to reduce the costs associated with less advanced testing and also reduce the burden on the patient and the system by improving disease management.

The market for molecular testing was estimated to be $4.1 billion in 2010, according to consulting firm Frost and Sullivan, which also projects that the market will grow 11% per year to $6.2 billion in 2014 – well above the low single digit rate for standard medical tests. The market for genetic testing specifically will be about $1.8 billion in 2015, according to Global Industry Analysts, with the great majority of that in the U.S. The firm believes the market will continue to grow as more doctors and patients understand the benefits of genetic testing combined with increasing numbers of genetically related diseases in an aging population.

Over 500 laboratories in the U.S. have the ability to perform genetic testing from a simple blood sample. There are three types of tests. Predictive tests measure risk of developing a disease later in life; personalized tests measure how an individual is likely to respond to a certain medication; and prognostic tests measure an individual’s risk of disease progression or recurrence.

Not everyone is a fan of genetic testing. The tests aren’t cheap, and while highly accurate, they deal with percentages and not absolutes, so it’s possible that someone who shows a higher risk for a disease could go through procedures and treatments that may be unnecessary.

Still, even critics admit that the number of tests administered is likely to grow. The information is just too valuable — and will become even more so as genetic testing advances and new treatments are discovered — and I believe the vast majority of patients will want to be as informed as they can be.

  1. CERN:

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