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Solexa Officers West and Rubinstein Discuss New Tech Impact in Sequence

John West

Name: John West

Position: CEO, Solexa, 2004 — the present

Background: Vice President of DNA Platforms, Applied Biosystems; President, Princeton Instruments;

Education: MS, Engineering, Massachusetts Institute of Technology; MBA, Finance, Wharton School at the University of Pennsylvania




Linda Rubinstein
Vice President
and CFO

Name: Linda Rubinstein

Position: Vice President and CFO, Solexa, March 2005 — the present

Background: Background: Principal, RDJ Advisors; Vice President of Finance, ChemoCentryx; Senior Vice President,Global Healthcare Group of Lehman Brothers;

Education: MA, Economics, University of California, Los Angeles


In light of recent and pending movement along the nouveaux-sequencing axis of pharmacogenomics, we thought it would be a good time to talk with Linda Rubinstein and John West, respectively, about their views of the market and the impact of new technologies.

Linda, in your position at Lehman Brothers you did an analysis on the impact of genomic technologies on drug discovery. Can you tell me if that's relevant to your new position?

Lehman Brothers and McKinsey collaborated on a project where we looked at the impact of genomics and these other new technologies on drug discovery and development, and came to the conclusion that the new technologies were very promising, but it was going to take longer to get benefits from them in terms of having new drugs come to market. As a result, it was our prediction that drug discovery and development was going to become more expensive, riskier, and was going to take longer. Part of the driver for that was that there were so many new drug targets that were being discovered, that the ability to truly evaluate them hadn't kept up, and the thesis was that, for competitive reasons, the pharmaceutical companies were going to continue to put things into the clinic, and they were going to have more failures in early clinical development, because the mechanisms wouldn't be as well understood. The thesis was that, over time this would be corrected as there was better understanding of the targets, and as the technologies continued to improve, and there was better understanding of the biological circuitry underlying them.

You could agree or disagree with the conclusions, but we had a mathematical model that built it up, and at the time the Tufts Center said that drug discovery cost about $500 million to take something from early-stage lab work all the way through to having an approved drug, and that included the cost of failure and the cost of capital, and they came to that estimate. And then shortly after we put out our report, which was called "The Fruits of Genomics" and came out of the Lehman Brothers research piece, Tufts increased their estimate to $800 million, and subsequently increased it to about $1.2 billion.

So, I think at the time it was somewhat controversial, because we started rolling the thesis out in late-2000 early-2001, and got people like Bill Hazeltine all upset when they were quoted railing against the thesis. I think now most people would say that it has been tougher, that just having, for example, combinatorial chemistry doesn't meant that you're going to increase the throughput and the success rate in terms of getting new drugs.

So that was the report that (Lehman) did with McKinsey, and it comes back to what we're doing here at Solexa, because here we're at the front end of the process, with genetic analysis in the form of DNA sequencing, and gene expression analysis. And I think that where we are, now in 2005, is halfway through that projected 10-year horizon where the technologies were going to improve, so that you could get better data, and you could apply the technologies more effectively in discovery and development. I think it also applies at the back end, where in order to apply the technologies better, you're going to have to do that in a better linked model of molecular diagnostics with therapeutic development and discovery, and it ties in very much with pharmacogenomics.

John, how do these technologies impact drug discovery and development?

I think that the impact that the kind of sequencing that we're developing will have depends a lot on how much progress they make. So, the large genome centers now are talking about the cost of resequencing of the whole human genome being in the range of $15 million — Washington University and others put that out in the last year.

If you bring that down by one order of magnitude, to be honest, it probably doesn't change very much, because at $1 million per genome, or in that range, you'd still have very few of them done, and it's certainly not the kind of thing you could afford to do with individuals as part of any kind of personalized medicine. Even at the level of $100,000 — I think that level will open up research projects, but it's not going to get people to actually use personalized medicine. I think we really need to get the cost down to single-digit-thousands of dollars for a whole human genome to have an impact. I think that part of the reason that people are pretty excited about Solexa, and the reason I came here, is that I think we can get there, and we can get there pretty quickly.

Now, instead of looking at individual mutations, or a few mutations that have been associated with a particular disease state or drug response, or that kind of thing. One can look very comprehensively, and that actually ends up being more economical than doing a whole bunch of individual tests, where you have one test for this disease, one for that disease. I think that's part of our outlook.

The second part of our outlook is that I think to the extent that people have been using genotyping as a method of understanding people's individual predispositions, it's helpful, but most of the genotyping that's being done now is in association studies, where people are trying to look statistically across a group of people at what might be associated with a disease or a particular drug response, but that doesn't help you very much with the individual person, because the SNPs that people are looking at are surrogate markers. They're not the actual causative SNPs, and those often have a very dispersed mutational spectrum, so you end up with lots and lots of locations at which you can have a mutation that actually causes the problem, and the detailed prognosis for an individual will end up depending a lot on seeing those mutations that are individually rare, but are collectively the basis behind a lot of disease. So if you want to see the causative mutations, which I think are what you need to understand a particular person's medical situation, then you need to have the ability to look very broadly.

By bringing down the cost to a level where it really becomes practical as a diagnostic, I think that really will open up personalized medicine in a way that individual tests for individual genes don't.

Some of that is getting going — it's getting going remarkably slowly, in a way. Because it's kind of having to be done one SNP at a time, one disease at a time, one drug at a time, as opposed to being able to get sort of a comprehensive set of data where you say, 'Wow, I can see the whole thing.'

I think that bringing down the cost of sequencing the initial one or two orders of magnitude, will build some interesting businesses — including ours — in the research space. But I think the place that it really plays into personalized medicine is when you get the cost down to below the $10,000-genome level, and you get down to a few thousand dollars, or even $1,000 for a genome. And I think we see those as not being that far away.

How far is that for Solexa, John?

Our feeling is that we would be expecting to deliver single-digit $1,000 genomes in 2007. So it could be two years away. People talk about this as being 10 years — I don't think it's going to be 10 years from now; we're working on designing a technology that will make this a practical reality now.

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