How genetic testing will show us the money in 2009

Every new business niche goes through specific stages. Launch, proof, competition, consolidation.

The business of your genetic code has now entered stage two, proof. Also known as, show me the money.

Of all today's start-ups it's the best known, 23andme, which seems to be facing the stiffest headwinds.

It has slashed prices, brought in new leadership, and faced no small amount of media ridicule, as reporters start asking the hard question -- what's it for?

While 23andme has headed directly toward the mass market, Knome has headed to the class market. It puts its genome sequences on a stick, puts the stick in a box (above), then gives the box a fancy lid.

But at the end of the day, the offerings seem quite similar. The box and the stick just hold the result of a test -- what do you do with it?

Navigenics offers a twist. Instead of a stick in a box it's a service, genetic counseling with an RSS feed back-up. When your genes make news it's in your inbox.

Navigenics is also engaging in affiliate marketing, lining up wellness groups in an attempt to make its results actionable. But the money is still coming from consumers.

The concept being pushed here is bespoke medicine -- care tailored to your specific needs. Instead of taking your blood pressure, we may know you're prone to hypertension, and even which medicines are best, before you seek care.

That's why I like the market approach of deCODE, whom I profiled here last month.

Rather than just push whole genetic scans, deCODE has developed specific genetic tests for chronic conditions -- heart attack, stroke, diabetes, and various cancers.

Fact is that by the time we can afford this test we generally know what is most likely to kill us -- it's what killed mom or dad or grandma. We know, in general, where are risks lie.

A simple test that can tell us if the risk is real, and delivers news a doctor can use, which may prove its value to insurers. As it did to co-founder Jeffrey Gulcher, whose own prostate cancer was nipped in the bud thanks to deCODE genetic testing.

Rather than targeting the consumer market deCODE is looking at corporations who want to protect key employees, and insurers who want to cut specific risks down the road. Who pays matters.

It's this fight to bring third-party payers into the genetic testing arena where I think the money will be made in 2009. By the end of this year leadership will be established, the rules of the road will be known, and the game will be truly afoot.