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September 9, 2009 | Austrian venture capitalist Hermann Hauser, a co-founder of Amadeus Capital Partners in Cambridge, UK, where he earned his doctorate in physics, made news in August with the announcement that he had received one of the first four personal genome sequences produced by Illumina’s next-generation sequencing service. The service is open to anyone with a doctor’s note and $48,000 to spare. Hauser knows more about the Illumina sequencing technology than most – he was a key early investor in and board member of Solexa, the British outfit that Illumina acquired in 2007 for $600 million. Kevin Davies spoke with Hauser about his dual role as both an investor and now a customer in Solexa sequencing.

Bio-IT World: Congratulations Hermann, you’ve joined a pretty select group.

HAUSER: Yes, indeed. I think I’m probably number 4 in the world who knows their own genome to any detailed extent.

Were you one of the first investors in Solexa?

We came in very early on. The very first was Abingworth. We came in the first round after that. Of course, this technology is all due to a spectacular breakthrough by two brilliant Cambridge chemistry professors, Shankar Balasubramanian and David Klenerman.

What was it that grabbed your attention and led you to invest?

The number one criterion is the size of the market. Can this be a large opportunity? We knew the sequencing market was already $1 billion, so that got a tick. The second thing that we look for is the quality of the people. Both Shankar and David are outstanding, giants in this industry. The third thing is a defensible technology. Do we have patents that, if successful, the other guys can’t just copy what we’re doing. That got a tick too, so that’s why we invested.

Wasn’t Solexa one of the early champions of the $1000 genome?

Absolutely. It was at the forefront of our minds from the very beginning. It’s just so satisfying that we managed to reduce it from $10 million, which was the going rate when we started, to $48,000, which it is now. I believe it will be $10,000 next year. I think the $1,000 genome will only be 2-3 years away.

Was there any sadness at all in selling a British success story to the Americans?

Not really, one has to be pragmatic about these things. The only way that Solexa has managed to become the sequencing machine of choice is by linking up with the phenomenal sales force and marketing muscle that Illumina has. If we’d stayed independent, we’d be a $10-20 million company now. Illumina went from zero to $100 million in the first year.

How did you end up in this quartet of Illumina’s early genome sequence volunteers, along with CEO Jay Flatley, Harvard’s Henry “Skip” Gates and his father?

Jay Flatley bloody pulled rank on me, that’s what it was! I told [ex-Solexa CEO] John West, the minute we sold it to Illumina, that I’d like to be the first person to use the machines to have his genome done. Since Jay runs the company, he got his done before mine! …

I had a very good lunch with Jay when I went to San Diego two weeks ago. Jay said, very interestingly, although he paid $600 million for Solexa pre-revenue, this might go down in the annals of the biotechnology world as the most successful acquisition ever, full stop. The reason that he gave was an interesting reason: once you get it down below $10,000 and eventually below $1000, our combined belief is that people will do it for their babies as they are born. There are 6 billion people, divide by 60 (average lifetime), that’s 100 million people every year. It’s a $100-billion market!

Your physician for this purpose was Michael Nova of Pathway Genomics?

We’re not interested in Pathway, we just needed a doctor to give me advice – as you know, America is a very litigious society, and of course, Illumina wanted to make sure that the only thing they produced for me was the actual sequence and leave the interpretation to another company.… The only doctor that was available when I was over there was Michael, an absolutely wonderful person. I’m now considering using Pathway as one of the companies to interpret the sequence… He gave me doctor’s advice in terms of being aware that you can find out things you don’t want to find out.

Did that give you pause, any concerns about proceeding?

No, but one of the first things I looked up was my APOE gene variant, and that was fine.

How did they present the data to you?

It was a hard drive with all the data plus an iMac with the software on it, the GenomeStudio, so that in the evenings, I can look up the latest gene association studies and look it up in my own genome to see if I have that gene variant, that SNP, or not.

What level of annotation did Illumina provide for your sequence?

The software is actually quite sophisticated... I’m probably the most sequenced person in the world at the moment, because they fell just short of the 30X coverage that they’d promised me, so they had to do another run. I actually got 34X coverage… I have all 34 copies on average that I can look at to see how the base calling was done. Then I have the actual called sequence underneath, and underneath that, I get the SNPs. So if any of the nucleotides differ from the reference genome sequence, then I get a SNP alert and I can look up what that SNP is…. It also tells me whether it’s a gene or the non-coding part of the DNA, exon or intron, so it gives me quite a bit of information.

Do you need a Pathway Genomics or a 23andMe for further analysis?

This of course isn’t an analysis, it’s just the data. So the only thing you get is where the genes are, where the SNPs are, and what variant you had. The gene association studies tell you what correlation that particular gene variant has with the propensity of getting Alzheimer’s or Parkinson’s or particular cancers – that interpretation is not done by Illumina…

I’ll be working with a number of companies for the interpretation, whoever has the best database for these association studies. The really exciting thing, and the reason I had my genome done, is the number of association studies coming out now is just phenomenal. That whole field is just exploding. Look at the latest Alzheimer’s associations from Cardiff, that’s all great stuff.

Did anything in your genome sequence surprise you?

There was one great surprise, and that is my genome uncovered 320,000 new SNPs that had never been seen before. Since the total number of SNPS that determines the difference between you and me is only 3 million, 10% of the 3 million -- that was quite a surprising result. It shows the quality of the data we now get out of these sequencing machines.

I don’t have the major interpretation yet… I figured out that I have a high likelihood of blue eyes, the genes tell me I’m likely to be taller than the average, which is something I’ve known for a while. A pleasing thing was that I have intelligence genes, but as you may know, the value of the intelligence gene is only about 2 IQ points, so its not very much to write home about.

A tall, blue-eyed, intelligent Austrian. No big surprise there?

No big surprise, nos. The Austrian part I derived from the expectation that my parents really are my parents, but I have not had the genetic verification of that yet!

Do you think the falling cost of genome sequencing has ramifications for newborn screening?

I think it has phenomenal potential not just for Illumina but for the whole development of personalized medicine. Most drugs that we use at the moment are only effective on 40-60% people. On the rest, they’re a total waste of time. So knowing which drugs are effective to influence some of the pathways in our metabolism, I don’t think people need to be shy about.

Do you have your eye on any 3rd generation sequencing technologies?

Here on my desk at Amadeus I have a “tombstone” [a framed diploma] with my 1G Solexa machine, signed by all the people who did it. By the end of this machine, Illumina will have a machine doing 95G, almost 100G. Jay says we won’t stop there either. There’s a lot of life left in the existing Solexa technology. In terms of really high-throughput sequencing, it’s a very hard technology to beat, because the read lengths are going up as well, approaching 100 (bases) and there’s no reason why they shouldn’t go to a few hundred.

Having said that, there are a number of nanopore technologies I’ve been following, they are quite exciting. Oxford Nanopore is one, we have another one in Cambridge called Base4 which is very exciting. If you run a DNA strand through a nanopore, it runs through at amazing speeds, like 1 million bases/second. If you can catch every fourth or tenth of that, that’s still fantastic speed.

Any final thoughts or comments?

I’m better known for my silicon investments and microprocessor investments than my life science investments. But when I look at it from 30,000 feet, the silicon industry is a $300-billion industry, a very substantial industry. I managed to create $3-billion companies and some have done very well. But the potential size of the market that gets unleashed by personalized medicine because we can finally fix people’s health actually knowing what we’re doing – the way medicine has proceeded so far is you try a molecule on someone and if it doesn’t kill them you try some more and find out if it has a positive effect, and if it does then you give it to them without basically having a clue what it does. This is really unleashing a much deeper understanding of how biological systems work, which means we could introduce very personalized targeted medicine for people’s problems, in such a way that I think it will create an industry that will be many times the size of the silicon industry.

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