By Julia Karow
Human genome sequencing and analysis firm Knome, which launched in 2007 offering whole-genome sequencing directly to consumers, has shifted its focus to the more lucrative research services market.
Last week, the privately held company disclosed in a filing with the US Securities and Exchange Commission that it has raised $5 million in an equity financing round that has a target of $20 million.
Earlier this summer, the company started using a new version of its proprietary genome interpretation engine, kGAP 2.0, and is currently offering human genome sequencing, annotation, and analysis services at a promotional price of $4,998 per genome for orders of at least ten.
Knome's interpretation technology was used in a recently published study by researchers at the University of British Columbia who identified a mutation associated with an inherited form of Parkinson's disease. Knome sequenced and interpreted the exomes of two individuals for that study.
According to Jorge Conde, Knome's CEO, the company's business volume in the first quarter of this year was higher than in its entire history through the end of last year. Rather than individuals curious about their genomes, most orders have come from researchers in industry and academia. "The market that we think can be serviced now, and we can be effective in, is the research market," Conde said.
Knome does not disclose details about its order volumes or revenues, but Illumina said in a recent earnings call that Knome has ordered 250 human genomes from its Illumina Genome Network whole-genome sequencing service (IS 8/2/2011). IGN currently charges $4,000 per genome for orders of at least 50 genomes.
Conde said that Knome outsources sequencing to Illumina, China's BGI, and Complete Genomics, depending on the needs of the customer, though most are currently sequenced using Illumina technology.
According to Knome's website, researchers using its KnomeDiscovery service will receive whole-genome sequencing at 30-fold depth; genome annotation with "project-driven curation;" a comparative analysis of the genomes; a short list of "suspect" variants, genes, and networks; and desktop software for further analysis, including KnomeFinder for candidate variant discovery and KnomePathways for finding gene-gene interactions and gene networks. Customers can also request interpretation services only, paying a little less than half the full price, depending on the size of the project, Conde said.
The $4,998 offer represents an almost 50-percent price reduction compared to the company's most recent list price, he said.
Version 2.0 of the kGAP interpretation engine, which Knome uses to analyze the sequence data, differs from the previous version in that it can run several projects in parallel because the data is now processed in a cloud.
Also, the output of kGAP is now in a database format rather than a flatfile format, allowing customers to query and compare genomes more easily.
Conde acknowledged the growing competition in human whole-genome analysis services but said that Knome is "well-positioned" because of its experience and because it "spent a lot of time thinking" about the needs of researchers prior to building its tools, especially with regard to comparative analyses of genomes. Competitors include Omicia, which recently said that it plans to launch a clinical genome analysis platform later this year (CSN 7/29/2011).
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Specifically, Conde said, the database format of the results and the ability to "do some very robust data querying directly from the database using our tools" differentiate Knome from others, as well as the ability to interpret sequence data generated on different platforms.
The company also tries to cater to researchers with no prior expertise in genome analysis. "Our focus has been very much on the non-bioinformatic scientist," Conde said. "There is an ease of use and simplicity that we focus on in terms of developing our software tools that I think is also very unique."
Knome still offers direct-to-consumer genome sequencing and analysis services — formerly called KnomeComplete for the entire genome and KnomeSelect for the exome — but "it's something we have not been focusing on too much because we think the opportunity for us is helping researchers," Conde said. In the future, that service might become more important again, "but at the moment, that market is still very young," he added.
The DTC service, now called KnomeAtlas, currently costs less than $20,000 for a full genome, Conde said. For comparison, Illumina recently cut the price for its Individual Genome Sequencing service, which does not include interpretation, to under $10,000.
Knome received a warning letter from the US Food and Drug Administration last year stating that its DTC offering required the agency's review because consumers may make medical decisions based on the results (IS 6/15/2010), but Conde said the FDA's action did not play a role in deemphasizing the consumer service. The company has met with the FDA to provide more information about its service but has not heard back from the agency. "We intend to work with them as they work through their thinking of how best to regulate the space," he said.
Knome is currently funded through revenues, private investors, and a strategic investor, BioMérieux, which put $5 million into the company last year as part of a collaboration (IS 4/27/2010). Conde said the two partners have been exchanging know-how and information "on a fairly regular basis" but have no specifics to report at the moment. Knome has not yet disclosed the investors in its most recent funding round.
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