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Kailos Launches Low-Cost Consumer PGx Testing; Keeps Docs Involved

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NEW YORK (GenomeWeb) – Late last year, the management team at Kailos Genetics had a moment of reckoning about why they decided to get into the genetic testing business.

Since its launch in 2010, Huntsville, Alabama-based Kailos had taken the traditional route. The firm developed a method called TargetRich, which enables clinicians to home in on and deeply sequence specific regions of interest in the genome. After garnering CLIA certification for its lab in 2013, the firm began accepting patient samples from doctors for pharmacogenetic testing, analyzing them in its lab, and reporting results back to the physician. 

Kailos, which means well-being in Greek, has sold around 10,000 tests as of last year to several hundred doctors. But ultimately, the conventional commercialization pathway "felt extremely disconnected" from the very people Kailos' test was intended to benefit, Chief Scientific Officer Troy Moore told GenomeWeb. Coming from the research tools space, Moore was used to keeping in touch with his customers. "If we needed to know what they wanted or any problems they were having, we could talk with them," he said. "In diagnostic testing that's not the case. We receive a patient sample, we know who that patient is, but we can't talk to them."

In the diagnostics space, regulation distances the testing shop from the end user: the patient. "We looked back late last year and asked, 'Why did we start Kailos?'" Moore recalled. "We started Kailos to enable individuals to get genetic testing." Staying in line with regulations, the company decided to launch a consumer-focused business model where the decision to get tested starts with the consumer and ends with the physician and the patient discussing the results together.

Using this model, the firm this week announced the availability of its first offering, Praxis, a pharmacogenetic test that gauges genes associated with response to a range of commonly prescribed medications: proton pump inhibitors, antidepressants, Plavix (clopidogrel), Tamoxifen, and oral contraceptives. Patients can order the test online, paying as low as $150 to learn whether they are at risk of blood clots from birth control pills or up to $300 to figure out which antidepressant is likely to work best. Kailos mails a sample collection kit to customers' homes where they can swab their cheeks for cells and send it back to the lab for analysis. Kailos guarantees results in 10 days.

In transitioning from a "physician-initiated" to "patient-catalyzed" testing model, Moore said Kailos carefully considered the experience of other genetic testing firms that tried the direct-to-consumer model and got shut down by health regulators. Most publicized has been the experience of 23andMe, which held on to its DTC testing ethos longer than all other startups in the field, but had to stop marketing its health-related reports in 2013 at the behest of the US Food and Drug Administration. The company had to restart its regulatory interactions with the FDA and has so far garnered 510(k) clearance for one test out of the hundreds it was previously marketing.

Kailos decided to proceed differently. Consumers can order testing without a doctor's prescription, but in order to view and interpret their test results, they will need their doctor's permission. On Kailos' website, the company tells customers that per FDA regulations they "must get [their] doctor’s approval" in order to view PGx test results. "This is because your test could uncover a serious medical risk, and your doctor is the best person to discuss your options with you," the company informs.

The company offers to ease this process for customers by contacting their doctors and garnering approval on their behalf. But Moore pointed out that some states have strict rules around DTC testing and physician licensure. If a patient doesn't have a physician, one of Kailos' doctors licensed in Alabama and other states can sign off on the test requisition and interpret the report for customers, but they can't change any prescriptions. That must be done by a patient's own doctor. In such a case, Kailos will try to help customers find a local physician willing to consider PGx results and guide treatment decisions if necessary. "If your doctor won't approve your test, we will give you a full refund," Kailos promises.

Kailos doesn't have FDA approval for its test, but its lab has CLIA certification, and the firm is working on meeting additional regulatory requirements, such as accreditation from the College of American Pathologists and approval from the New York Department of Health. The regulatory trouble that DTC testing firms previously faced has stigmatized the consumer-focused model in genetics, Moore acknowledged, and shedding that perception has been a challenge.

Still, in Kailos' survey of the market, it sees growing consumer interest in genetic testing. The published literature suggests that people generally want to know their genetic information and for the most part, knowing it and having it interpreted in terms of their health doesn't increase their anxiety or lead them to make harmful decisions. They're even willing to pay for the test themselves, Moore noted, "as long as it's in a reasonable price range and they get results that are useable."

Also recognizing growing consumer demand for affordable genetic testing, several cancer genetics experts earlier this year launched Color Genomics. The California-based start up allows consumers to order breast and ovarian cancer risk testing online for $250, at one-tenth the cost of other diagnostic shops.

Before launching its consumer-focused model, Kailos carefully considered the price point for its tests. It had to be at a level that patients could afford but that would also allow the company to grow. "We're really tired of seeing patients get bills for $2,000 to $3,000 for tests … that they didn't necessarily ask for," Moore said. Kailos assures customers that the firm wont "rent or sell" their genetic information to other businesses.

This closes off a key revenue stream that consumer genetics firms like 23andMe have benefited from. While 23andMe irons out its regulatory issues around health-related testing, it has ramped up research partnerships with big pharma using genotype-phenotype data culled from consenting customers and is even trying its hand at drug development.

23andMe has said it is still growing its consumer business selling spit kits for ancestry testing, which has tremendous popular interest. According to one estimate earlier this year, consumer genomics firms can soon boast having tested 3 million samples, driven largely the ancestry market.

Moore believes there is enough consumer demand for genetic testing that Kailos can acheive good growth margins by selling affordable tests. He added that Kailos' proprietary TargetRich process helps make the testing process more efficient and less costly. "We can pull out, say, 20 genes from a particular person and provide back the information that they and their physician have asked for," he said. "We're not trying to sequence their entire genome or their whole exome."

Kailos will perform next-generation sequencing using Illumina's MiSeq or NextSeq based on the test being run and its volume. Most of the approximately two dozen genes on the Praxis PGx panel, such as those in the CYP450 family, Kailos sequences entirely. In a few genes where only a few SNPs are associated with drug response, Kailos sequences the specific region containing the marker of interest.

"The technology allows us to do what's most appropriate," Moore said. "If we need to look for rearrangements, we can do that. If we need to look for indels, we can do that. Or we can look for SNPs, and combine it all in a single test."

In the coming weeks, Kailos is planning to launch other PGx indications and then eventually move into disease risk assessment. The firm started with PGx testing because physicians and patients alike can easily understand its impact on care. Patients may not come into it understanding pharmacogenetics, but they know when they have a problem responding to their meds, Moore said.

"When you mention they can get tested for this, their face just lights up," Moore said. "If anything, it takes the pressure off them in thinking they've done something wrong or there's something they're not doing."

Kailos is providing test results in PDF format. Academic centers and healthcare systems that have incorporated PGx testing have found it is most useful and cost-effective when results are available in patients' electronic medical records, so doctors are alerted to this information when it comes time to prescribe drugs.

But because physicians can have different EMR systems that often don't play well with one another, "we're putting the information in the hands of the patient so that they can … bring it to the physician's attention," Moore said. Then, physicians can put it in the EMR if they choose; or, if the doctor asks for it, Kailos will try to put it in a format that can be brought in to the EMR. Kailos also gives customers a card that they can give to doctors with instructions on how access patients' online reports, so the PGx results can continue to inform their care if they see a new doctor.

Consumers have a report designed for them that lays out what they should discuss with doctors and physicians have a more detailed report that suggests dosing adjustments or alternative treatments. In the past, some doctors have expressed frustration at medical conferences about patients walking in with a hefty 23andMe report, when most genetic markers account for only a small part of the risk for complex disorders and don't have much utility from medical standpoint. So, ahead of launching testing that informs people about their risk for illnesses such as cancer, Kailos is developing educational resources that would facilitate physician/patient discussions that are quite different from the ones they might have around PGx testing.

Ultimately, in launching a consumer testing business, Moore highlighted the importance of setting accurate expectations in terms of the insights PGx testing can and cannot provide, and about the importance of talking to one's physician."You have to be careful not to oversell it. It's not a panacea," he said.

Leslie Conway's doctor used PGx testing through Kailos in March — before direct consumer ordering was available — to inform her cancer care. In January, Conway, 50, who works in telecommunications sales and marketing, was diagnosed with invasive lobular cancer and PGx testing revealed that she was a poor metabolizer for tamoxifen. "This turned out to be very important," she said, noting that her oncologist told her that if he'd administered the regular dose of tamoxifen, it wouldn't work as well and there would be a greater chance of her cancer coming back.

Unfortunately, the PGx test results weren't available by the time Conway underwent the first reconstructive surgery after her mastectomy. Afterwards, she was in tremendous pain despite being on pain killers. Her plastic surgeon changed her medications but genetic testing would later show that she couldn't metabolize certain pain drugs that well. "I thought I was going crazy," she said. "That's a bad feeling to have when you're struggling and can't get relief from it and you don't know why."

She took the results with her for her second reconstructive surgery in April. "I was able to say to the doctor, 'Look! This is why the Percocet and Lortab didn't work," she said. "It was awesome that I was able to show him the report."

This empowerment and relief that Conway felt is perhaps the best part about a model that brings testing directly to consumers, Moore reflected. But "we prefer physicians participate in this. We want to educate not only the patient but also the physician."

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