Illumina Inc., private equity firm Warburg Pincus and Sutter Hill Ventures are joining up to form a genetic-sequencing startup called Helix, aiming to reach consumers who want to know what their DNA says about their ancestry and health.
The company has raised more than $100 million and will be based in the San Francisco Bay Area, the partners said in a statement Tuesday. Helix will sequence a customer’s genes and then let the client pick and choose from various providers that offer health, fitness and genealogy analysis.
Jay Flatley, Illumina’s chief executive officer, will be Helix’s chairman. The CEO hasn’t been selected yet, said Eric Endicott, a spokesman for Illumina, which makes DNA-sequencing equipment.
Helix joins a growing field of genetic-sequencing companies that offer people information on their family history or congenital health conditions, including Invitae Corp., 23andMe Inc. and Ancestry.com Inc. Behind this is the plummeting cost of genetic-sequencing technology.
Helix’s prices will be competitive with other consumer products on the market, according to Mary Zimmerman, a spokeswoman for Warburg Pincus, who declined to comment on the size of the equity firm’s investment. 23andMe and Ancestry.com’s services cost $99.
The startup was set up so that consumers won’t have to order separate tests and repeatedly send saliva or blood samples, according to Endicott. Consumers will be in full control of their data and will be able to delete their account or remove information at any time, he said.
Helix is working with the Mayo Clinic, which will create consumer-education and health-related applications, and with Laboratory Corporation of America Holdings, which will provide analysis and interpretations services on genetic conditions, according to the statement. The Mayo Clinic is also investing in Helix.
Though it’s known more for filling doctors’ requests for lab tests, LabCorp is starting to move into the realm of direct-to-consumer health care. The company is preparing a service that allows patients to order bloodwork like cholesterol readings and thyroid tests from the diagnostics company through an online service.
LabCorp is also facing competition as options emerge for consumers to get tests without visiting a service center at all. Startup Theranos Inc. has developed a diagnostic kit available in some Walgreens Boots Alliance Inc. drugstores to provide a range of results.
Helix offers Illumina and LabCorp a way to make a long-term bet on consumer demand for genetic information with respected health-care providers like the Mayo Clinic, analysts at Evercore ISI said in a note Tuesday.
“The real question in our minds remains the pacing of market development as well as the potential challenges of an uncertain regulatory environment,” analysts Ross Muken and Vijay Kumar said in the note. They estimated that the more complex genetic sequencing tests under development may take as long as a decade to be commercially successful.
Closely held 23andMe has shown the role regulators may play in the burgeoning market for genetic data, running into a standoff with the U.S. Food and Drug Administration in late 2013 over the information it was providing consumers about disease risks. Since then, the company has gotten back into the agency’s good graces, getting authorization for a test for Bloom syndrome, associated with short stature and sun sensitivity.
Helix will be included in Illumina’s financial statements. Illumina’s earnings excluding one-time items will be reduced by 10 cents per share in 2016, and the 2015 impact was already included in the company’s July 21 financial forecast, according to the statement.