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Nebula Genomics Touts Free DNA Sequencing to Coax Health Data Sharing

Xconomy Boston — 

A growing number of startups are trying to encourage people to share genomic and other health data for research purposes by offering them some form of compensation. Now, as competition in this young sector ramps up, one of the big questions is what type of incentive will attract the most individuals.

The latest experiment comes from Nebula Genomics, the San Francisco- and Boston-based startup co-founded last year by Harvard University professor and genomics pioneer George Church, and backed by $4.3 million from Khosla Ventures, Arch Venture Partners, and several other investors. Today, Nebula announced that it’s ready to start signing people up for its platform, which will run on blockchain technology. Part of the startup’s pitch is that users can share personal health information in order to rack up “credits” that will be redeemable for services such as having their genome sequenced for free. Drug developers and health researchers would cover the cost of the sequencing service, which would be conducted by a Nebula partner.

“The idea here is that we reward users for sharing health data,” says Nebula CEO and co-founder Kamal Obbad. (He’s pictured above on the left, with Church (center) and co-founder Dennis Grishin.)

Some of Nebula’s competitors are trying different incentives. For example, EncrypGen and Zenome are using cryptocurrencies, while LunaDNA wants to offer company shares through which individuals could earn a piece of the profits the firm earns from organizations that pay to access healthcare data shared by users. (More on these approaches in a minute.) Obbad says Nebula eventually wants to switch to a model that would let users earn some form of payment for sharing their data.

There’s no telling whether any of these tactics will entice enough data-sharing individuals and data-hungry researchers to the startups’ platforms to enable them to build sizable businesses. But if nothing else, the companies’ models could serve as interesting case studies in the fledgling sector.

Here’s a bit more info on how Nebula’s platform will initially work: Users will fill out questionnaires that ask about traits such as personal and family medical history, Obbad says. Down the road, the company might also ask individuals to share information about their dietary habits or upload data from wearable devices such as a Fitbit, he says. Sharing that health information will earn the users credits that, once they accumulate enough, can be exchanged for personal genome sequencing services. Nebula is betting that pharmaceutical companies and healthcare researchers will be willing to pay for users’ sequencing costs in order to access their health data—which will be anonymized—through Nebula’s online marketplace.

“A big issue right now in genetics is there just isn’t enough data,” Obbad says.

Nebula says users will maintain ownership and control of their health data, which they could share with their doctor to inform medical decisions. They will have the option to store the data in encrypted form on a cloud-based system of their choosing; it won’t be stored in a central database controlled by Nebula, according to the startup’s website. Users will set their own privacy permissions, and their health data will only be shared with third parties with their explicit consent, Obbad says.

Companies such as 23andMe and Ancestry.com have made direct-to-consumer DNA testing popular, with people seeking insights into their family heritage and personal health traits, for example. Those companies can sell personal data to third parties with the user’s consent, but the individual is “not getting a cut,” Obbad says. Now, his startup and its competitors are pushing alternative models aimed at giving users more power over their data and enabling them to benefit directly when the information gets used by researchers.

It’s similar in some ways to what’s playing out with social media networks and other Web companies. Facebook and Google harvest user data and sell it to advertisers; users don’t have much control over that data, and they don’t make money from it. Startups such as Datawallet are trying to restructure this model by letting individuals store personal data in one online repository, control access to it, and get paid to share it with businesses.

Nebula and several of its peers are building their data platforms atop blockchains—the distributed computing technology that underpins Bitcoin and other cryptocurrencies—because they argue that the digital ledgers will provide better security, user control, and traceability of the information transfers.

Initially, Nebula users won’t be able to exchange their credits for money, Obbad says. But the plan is to eventually allow people to redeem them for a cryptocurrency established by Nebula, which could then be converted into other cryptocurrencies, such as Bitcoin, or fiat currency, such as U.S. dollars. He isn’t sure when the currency option will be made available. “We’re waiting for general regulatory guidance on how cryptocurrencies will be handled in the U.S.,” Obbad says. At any rate, the first item on the agenda is attracting enough users willing to share their data, he adds.

Regulatory uncertainty hasn’t deterred some of Nebula’s competitors. EncrypGen has established a cryptocurrency-based marketplace for buying and selling genomic data and other health science products and services. Zenome is building something similar.

Meanwhile, LunaDNA said earlier this year that it planned to issue its own digital currency that could be exchanged for fiat currency or traded for other items of value offered by the San Diego-area startup. But those plans have since changed. LunaDNA instead has filed with the SEC to offer company shares that would be doled out to individuals who share personal health information, such as genomic data, wearable device data, clinical health records, and completed surveys. The idea is that when healthcare organizations pay to access LunaDNA’s database, some of the profits would be paid to users in the form of dividends. The company’s request to offer shares is still pending with the SEC, according to an e-mailed statement from LunaDNA co-founder and president Dawn Barry.

Like Obbad, Barry cites a lack of clear regulatory guidance as the reason her company scrapped the cryptocurrency plans. According to its SEC filing, the company still plans to use blockchain technology to track when users join and leave LunaDNA’s network; when they share or withdraw data; and when a third party queries the company’s database.

“We remain bullish on blockchain as a tool to achieve transparency, privacy, and value exchange,” Barry wrote in the e-mailed statement. “However, we do not define ourselves as a blockchain company.”