Nucleus Genomics Secures $3.5M Seed Funding for Innovative Genetic Tests

The Genesis of Nucleus Genomics

During the widespread societal closures of 2020, Kian Sadeghi, a student at the University of Pennsylvania, found himself concentrating his efforts within his home in Brooklyn. He actually preferred this focused environment.

These months of relative isolation were dedicated to extensive research encompassing genetic sequencing, computer science, and statistical analysis. This intensive study ultimately led to the founding of Nucleus Genomics – currently operating as a “stealth” startup, as indicated on Sadeghi’s LinkedIn profile – prompting his decision to leave Penn to pursue the venture on a full-time basis.

Nucleus Genomics' Unique Approach

According to Sadeghi, Nucleus Genomics presents a novel perspective on genomic analysis. Individuals can submit existing genetic data obtained from companies such as 23andMe or Ancestry, or alternatively, acquire a genetic testing kit directly.

The company’s “proprietary algorithms” then calculate polygenic risk scores – assessments of disease risk based on the analysis of genetic variations – and present these scores on a platform designed for ease of use.

“Our goal is to have a human genome on every iPhone,” Sadeghi explained to TechCrunch. “We aim to integrate both genetic and non-genetic data to ultimately determine absolute risk scores for individuals concerning various diseases.”

Seed Funding and Key Investors

Nucleus Genomics recently announced a $3.5 million seed funding round, spearheaded by Founders Fund. The investment round also saw participation from a diverse group of individuals, including:

Adrian Aoun, CEO of Forward Health
Patrick Hsu, Professor at UC Berkeley and CRISPR co-inventor
Brent Saunders, former CEO of Allergan
Matteo Franceschetti, CEO of Eight Sleep
Joshua Browder, CEO of DoNotPay
Cory Levy and Adam Guild
Pareto Holdings, Pomp, Shrug
Ankur Nagpal, Quiet Capital, Salt Fund
Bluewatch Ventures, Night, and Brandon White

The Growing Interest in Genomic Data

The foundation of Nucleus Genomics rests on the belief that there is a growing public desire to understand personal genomes and to effectively interpret the resulting information.

Sadeghi’s personal connection to this field stems from the untimely passing of a cousin due to long QT syndrome, a condition that can have genetic links. This event spurred his own genetic experimentation at Genspace, a community biology lab in Brooklyn. He was previously profiled in a Wall Street Journal article concerning DIY CRISPR enthusiasts.

This fascination with genetics is widely shared. The rise of direct-to-consumer genetic testing has fostered a community of individuals who upload their genetic information to platforms like GEDMatch, utilized for purposes ranging from locating relatives to assisting in the resolution of cold cases.

Expansion of Direct-to-Consumer Genetic Testing

The direct-to-consumer genetic testing market has experienced substantial growth in recent years. Fewer than 2 million individuals utilized these services in 2013.

However, by 2018, this number had surpassed 12 million. A 2021 report by Bloomberg indicated that one in five Americans had shared their genetic data with either 23andMe or a competitor.

Further expansion appears possible, as a 2018 poll conducted by the Associated Press NORC Center for Public Affairs Research revealed that 54 percent of Americans had limited or no knowledge of genetic testing.

Targeting a Younger Demographic

Sadeghi believes that a significant portion of those yet to engage with genetic testing are younger individuals. Some data supports this claim.

A 2017 survey of approximately 1,600 direct-to-consumer genetic test users (from 23andMe and Pathway) showed that the typical user was middle-aged, white, and a college-educated woman.

According to company data from 2011, the average age of a 23andMe user is 45. TechCrunch has contacted 23andMe for updated information on their user demographics but has not yet received a response.

Reaching New Audiences and a Novel Platform

Nucleus Genomics intends to simplify genetic testing and deliver user-friendly reports through “newfound distribution channels,” aiming to connect with younger audiences.

“We can reach a completely new demographic and introduce an entire generation to genetic testing, much like Robinhood did with the stock market,” Sadeghi stated.

Beyond attracting new users, Nucleus aims to function as a third-party platform, allowing individuals to upload genetic data collected by other companies. Platforms like impute.me (a nonprofit) and Allelica (which recently secured $1.75 million in seed funding) already offer detailed clinical disease risk information upon data upload.

Incentivizing Data Sharing

Nucleus Genomics offers a unique incentive for data upload: financial compensation for users.

The company will also explore opportunities to share genetic information with pharmaceutical companies, with user consent. Individuals who choose to share their data through Nucleus may be eligible for a “dividend payment.”

Data sharing is already occurring; 23andMe has established a partnership with GSK to utilize genetic information for drug discovery and research – sharing only data from users who have opted into the service. 23andMe and GSK are currently conducting clinical trials for a cancer drug.

In return for providing genetic data, which could contribute to the development of profitable drugs and medical products, users stand to receive a financial return.

The specific amount of this dividend payment remains to be determined, according to Sadeghi.

Regulatory Pathways for Genetic Testing

The year 2013 marked the initial release of health risk prediction reports by 23andMe, leveraging genetic data. However, the FDA intervened, requesting a pause and issuing a formal warning letter.

Subsequently, the company secured FDA approval for several genetic tests designed to quantify health risks associated with conditions such as Parkinson’s disease and breast cancer, among others.

A test assessing diabetes risk was introduced in 2019, but it bypassed FDA approval by being categorized as a “wellness product.” This classification generated considerable debate regarding its practical value.

Paving the Way for Approval

23andMe effectively established a pathway for obtaining approval for direct-to-consumer (DTC) tests and reports. This has created the potential for other genetic analysis algorithms to pursue 510(k) premarket clearance, provided they demonstrate comparable accuracy.

This potential process was a concern for 23andMe, and was noted as a risk factor in their S-1 filings with the SEC.

Nucleus’s Approach to Regulation

Currently, Nucleus is focused on the development of its proprietary polygenic risk score algorithms. These algorithms represent the core of the company’s technological innovation.

“The development is highly technical, challenging, and at the forefront of the field,” stated Sadeghi. The initial regulatory strategy involves a method previously employed by Ancestry – utilizing a clinical network to order tests, rather than establishing their own infrastructure.

Navigating Regulatory Hurdles

This approach allows Nucleus to initially avoid direct FDA approval of its algorithms, as this process falls under the purview of the Centers for Medicare and Medicaid Services.

However, this may not be a long-term solution. Ancestry eventually shifted its strategy and sought 510(k) market approval for its own DNA testing kit and associated genetic tests.

When questioned about this potential shift, Sadeghi indicated: “Ultimately, we do intend to pursue that route in the future.”

Future Plans and Vision

Nucleus anticipates launching its services around January 2022 and plans to expand its team from three to six or seven members.

“The complete human genome sequence will eventually be available for every individual,” Sadeghi explained. “The key question is who will take the initiative to collect and analyze this data? We aspire for that entity to be Nucleus.”