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Welcome to the Genomic Medicine Revolution · StartUp Health NOW Podcast

• 0:00
  We think that is the new baseline that should be standard of care.
• 0:04
  And I personally, looking at the data, have a very high conviction if every American would get that over forty, you could decrease healthcare costs by at least two trillion dollars, and you could save at least one million lives a year in the United States.
• 0:18
  [on-hold music] Welcome to Startup Health Now, the podcast where we celebrate the entrepreneurs and innovators who are transforming health. I'm your host, Logan Plaster.
• 0:29
  Today on the show, I'm talking with Joe Bakhti, CEO and founder of the company QuantGene.
• 0:34
  Bakhti and his team have made a name for themselves by offering a kind of deep genomic profiling that allows them to identify cancers early, detect hereditary diseases, and find adverse drug interactions.
• 0:47
  The name of the game here is genomic medicine, and we're not talking about 23andMe or Ancestry.com.
• 0:53
  As you'll hear in the interview, Joe has a revolutionary vision for where the field of genomic medicine is heading in the next five years, and he's got a strategy for getting there.
• 1:03
  Spoiler alert, Joe believes that if we can get the cost of genomic testing down, which he's actively working on, and scale access to genomic medicine to millions of people, we could knock cancer out of the top ten list of leading causes of death entirely.
• 1:18
  It's currently at number two. It's a pretty radical idea, but Bakhti has a strong track record with QuantGene and a compelling market strategy through their new offering called Serenity. I'll let him explain the vision.
• 1:30
  Let's get into it. [on-hold music] Joe Bakhti, CEO and founder of QuantGene, thank you so much for joining me on Startup Health Now. Thanks for having me, Logan. Joe, it's exciting to get an update.
• 1:43
  Uh, the reason I wanted to talk to you today is that you have this pretty revolutionary idea about the future of genomic testing and exactly how we're gonna get from the idea and the promise of genomic medicine to the common reality at scale.
• 1:58
  The idea that even someone like me is benefiting from genomic testing and genomic health and what that means not just for me, but for millions of people.
• 2:07
  So I wanna, I wanna get into that, but let's just start by having you level set and explain to us what QuantGene is. Give us that elevator pitch. Absolutely.
• 2:18
  So genomics has come a super long way over the last twenty years from, you know, the, the two billion dollar genome down to a five hundred dollar genome today.
• 2:28
  And most people have experienced it in some way or seen it, like 23andMe, maybe heard about Grail multi-cancer detection. What is happening right now is that genomics in two thousand twenty-three
• 2:41
  goes in through that inflection point where suddenly companies like QuantGene, who are at the cutting edge of that science and technology, can deliver the next generation of clinical genomics to a lot of people.
• 2:55
  And what that means is it's not your 23andMe anymore, where it's a little toy, basically, but we are talking about deep clinical genomics that can detect all cancers, for example, at earlier stages in the blood with a simple blood draw, not as science fiction, but as clinical reality in two thousand twenty-three as we speak.
• 3:12
  We can also see your entire genome or exome, your coding genes or your coding parts of the genome, and identify your disease risk pre-predispositions across all these categories.
• 3:24
  We can understand Logan is more at risk for X than for Y, and that means your preventative care should focus on X more than Y than the average person.
• 3:35
  We can identify what prescription drugs you should take or avoid, um, not in e- not in an esoteric way, but in a very precise scientific way, and say, "If y- if your doctor des-des, um, decides to d- prescribe this drug, drug A, Logan needs fifty percent of the dose compared to the average person."
• 3:57
  That level-- And that will save you from a lot of problems and side effects. Or we say, "Logan should never take that specific drug because that drug cannot be metabolized because you have a genetic, um, variant."
• 4:10
  So- So imagine that level of precision medicine coming to everyone. So Joe, when I hear that, when I hear the ability to detect all cancers earlier, that you s- you mentioned science fiction.
• 4:21
  It does feel a bit like science fiction. Where are we at in that process? Are we already there, and it's simply a matter of getting the science to the people? Absolutely. I, I absolutely see that we are there today.
• 4:36
  And in the medical community, when you look at evidence, there is a big difference between technology and capability and evidence, 'cause evidence lags behind the capability. Mm-hmm.
• 4:49
  So there is a lot of evidence that we can do that. There is not enough evidence to get full Medicare reimbursement for it, and that will take another twenty years probably. But it's not a technology challenge anymore.
• 5:01
  We can detect these cancers. We see them in the blood. We can take action.
• 5:05
  The question if we-- who wants to take action with what, by what means, and who pays for it, that requires more specific evidence to dial in the exact pricing and economics that the system can digest.
• 5:20
  But if you are willing to pay a thousand bucks a year out of pocket, you get the whole thing today. Got it. Got it.
• 5:27
  Well, I wanna get into your ideas about how to bring that to the masses, but before we do that, since this is a show about entrepreneurship and startups, give me a ten-thousand-foot view of the QuantGene journey.
• 5:39
  We started in two thousand fifteen at UC Berkeley with the idea of multi-cancer detection in the blood. Back then, we were one of the first ones who saw that coming.
• 5:48
  Then a lot of people jumped on the, on the gravy train that they thought is a gravy train. We had people like Gaill, uh, Grail, you know, joining us and Thrive and, uh, Guardant and some others.
• 6:01
  Um, but QuantGene kind ofWent all the way, and you know, we raised 22 million in total.
• 6:07
  Uh, then in the pandemic, we were able to utilize our cloud laboratory systems for COVID, um, added another roughly 20 million into our R&D budget.
• 6:18
  So in total, we were able to spend roughly 45 million into the development of the system and our laboratory systems and cloud and, you know, intelligence systems.
• 6:27
  And it was a pretty wild ride, and we were definitely on the brink of dying in 2020 when the pandemic hit because we needed to raise the next round. It completely fell apart in the pandemic.
• 6:39
  We ran out of money, got a PPP loan, survived another six months, and in that time were able to pull off a completely like adjacent over-testing infrastructure solution that then became the leading solution for all Hollywood studios, uh, for on-site PCR high complexity testing.
• 7:00
  And it was very random, and that- Fascinating. That, that sounds like the sub- the subject of an entirely different podcast episode. That's... That is a wild ride.
• 7:09
  And now just because I'm curious, uh, and because our listen- listeners might be, why did COVID send QuantiGene for such a loop?
• 7:18
  I understand why restaurants closed and, and various service industries, you know, shut down. Why was it so catastrophic for QuantiGene?
• 7:26
  Um, well, it turned out in the end to be extremely effective for QuantiGene, but it looked catastrophic in March 2020. And that is true for, surprisingly, for a lot of healthcare companies, right?
• 7:39
  The hospitals had to shut down. They didn't have patients. They had a complete breakdown of profits. Everyone was like devastated. That's right. QuantiGene, it was a funding problem, right? Mm.
• 7:47
  Because we were gearing up for the next round when it looked good before COVID hit, and then the capital markets were closed for business, right? No one was investing anymore.
• 7:57
  They all said, "I can't do anything right now. This is too crazy." Um, it was absolutely devastating on a capital raise level. Got it.
• 8:06
  Number one, the insecurity and uncertainty, and number two, the level of opportunities in the market, right?
• 8:13
  If the market crashes like it did then, and you have capital, you're not gonna put it in QuantiGene or any early stage venture. You just buy whatever. You buy like, uh, Walmart or something- Sure, sure...
• 8:23
  for 80% discount. Yeah. Yeah, exactly. What, what was your mentality around that pivot, uh, and what was it like to sort of get your leadership team on board for it?
• 8:36
  Well, it was like startup, you know, startup land live, the same thing that's actually hap- happened right now after the pandemic stopped because then we saw a giant revenue breakdown again because we were COVID dependent and had to pivot now.
• 8:49
  So we went through it twice now, but we're getting used to it. I think it's, you know, startup 101. SY Combinator always says, "Be a cockroach and then nothing can happen to you. Just don't die." Yeah.
• 9:02
  And you know, we, we basically said, "Okay, everyone takes a salary cut of 30 to 50%," and we all buckle down and try to figure out how to survive.
• 9:12
  And then next thing you know, three months in, someone came to us and said, "All the movie studios are closing down.
• 9:18
  It's about hundreds of millions of dollars, um, that they have to spend on COVID testing, but no one can deliver these solutions because they need a same-day turnaround on high complexity PCR tests, and for complicated reasons for unions."
• 9:35
  So, uh, we developed a custom solution within months. We had this thing up and running, and are now by an enormous distance, the number one in the world probably in turnaround speed for high complexity COVID testing.
• 9:48
  So we can now... We brought down turnaround times from basically at the peak of the pandemic, three weeks wait time at LabCorp, we brought it down to two hours. Wow. Wow. Okay.
• 9:59
  And then as we phased out of that COVID era, you had to come to grips again with a, a shift of the business. So now tell me kind of where you're at now with the product. Yeah.
• 10:11
  So now we are launched, um, as we speak, and, uh, we started the pilot, uh, a year ago. Had like 100, roughly 100 sales where everyone went through the process, and that looks better and better and very streamlined.
• 10:26
  Uh, people are very happy.
• 10:28
  Our concierge physician partners, our executive health partners, as we start getting the Cerenity solution to the hands of patients through concierge docs, some of the best docs in the country, uh, they really like it.
• 10:43
  They like it much better than Grail, which is the only alternative right now. Ours is twice as expensive, but probably 10 times better because it does much more.
• 10:53
  Um, and, uh- Give me some examples of what that, uh, 10X quality is. Just what am I getting as a, as a paid consumer? So what we decided to do is to not just do multi-cancer detection.
• 11:09
  So I think we are doing a better job than Grail in that too, but we decided to take it to a whole new level.
• 11:16
  So instead of just doing multi-cancer detection, we are adding all genomics to it, all germline genomics and pharmacogenomics, which Grail simply doesn't have, right? You just don't get anything on that front.
• 11:29
  Because what we realized is people might be interested in multi-cancer detection, but they are more interested in being safe and have peace of mind across the board, across all diseases.
• 11:42
  Because you can't, as a consumer, you can't say, "Oh, today I'm doing...
• 11:45
  I'm dealing with cancer, and tomorrow with cardiovascular, and then maybe with medication, and then there's another one who does something about diabetes prevention." Yeah.
• 11:54
  You want a turnkey one-click solution that gives you the most advanced precision medicine in one, you know, in, in one clickAnd you don't wanna have to worry about what it might cover and what it forgot.
• 12:09
  So Serenity is designed consumer centric and say, "Well, why don't you pay twice as much and get peace of mind because you got it all?" Mm.
• 12:17
  When you say peace of mind, uh, give me sort of examples of the types of things that I might be detecting if I'm using it, and I'm not really concerned about cancers, but I just want to have sort of the healthiest life I can live.
• 12:32
  So with peace of mind, what we mean is you know as a patient who can afford, you know, a couple of thousand dollars a, a year, right, for comprehensive advanced protection.
• 12:44
  You know that there's all these amazing technologies out there, but you don't know exactly where to get them, and you don't know when you're done.
• 12:51
  So what we wanted is compress it into one solution that gives you the peace of mind that you know I did everything humanly possible, technologically possible to see everything at the earliest stage with the right risk overlays.
• 13:05
  So what that means is, um, some things I mentioned before, for example, the pharmacogenomics piece, right? If you ever need prescription drugs, you wanna know if you can actually take them. Mm.
• 13:17
  And not having pharmacogenomics information is kind of crazy these days. Like, you have to know that 'cause that, that knocks out probably fifty, sixty, seventy percent of all side effects of all drugs.
• 13:28
  So it's enormous, this thing alone. The, on the germline level, like just seeing your entire twenty thousand gene exome and correlating every finding with all the medical knowledge in the world,
• 13:39
  that is also very important. You wanna know if you have an elevated risk for, you know, certain cardiovascular conditions or psychiatric mental health conditions, right?
• 13:48
  Maybe if you have anxiety or depression, maybe that's not just some random occurrence, maybe it's genetically linked, and that has clear implications how it needs to be treated, so that improves your outcome, much better chances of, of dealing with it.
• 14:02
  And of course, in cancer, it's not just about cancer detection. Mm. Cancer detection, and that's where we deviate a lot from Grail's philosophy,
• 14:12
  the te- a test like Grail or like the QuantGene DeepGen assay that does that is much more powerful if you put it into the context of the patient. So if we see a signal of a certain strength in patient one,
• 14:28
  that is interpreted differently from patient two if these patients have different risk profiles.
• 14:34
  So if patient two has a family history of pancreatic cancer and has an imaging result where something is in the pancreas that could be cancer but maybe not, and that patient gets a s- a small pancreatic cancer signal that Grail would probably ignore and say it's negative, we see that signal, we say, "Well, it's a little too weak on the genomic side to take action on that alone," but we have all the other data because we give you peace of mind and have a more, much more comprehensive idea of who you are and say, "Wait, that's actually suspicious," but only in that patient.
• 15:07
  Hmm. Okay, so we've talked about the depth of the testing and what it can provide to a, to a patient. Now let's talk about getting it into people's hands because Serenity right now is a, a concierge service.
• 15:21
  People associate this with a high dollar, um, premium sort of service, and yet I understand you have a vision for really getting this into many, many more people's hands and having a larger impact.
• 15:34
  So, so tell us about that. So let's first talk about today, what is the pricing.
• 15:40
  We brought down the price for comprehensive precision genomics and cancer detection to two and a half thousand dollars that we recommend per year to do that.
• 15:50
  We have an imaging package on top of it that brings the entire price up to four thousand nine hundred dollars, then you get full body MRI and full genomics.
• 16:01
  So let's, to make it simple, it's a five thousand dollar a year solution right now that gives you absolute peace of mind for precision genomics imaging. We like that solution, and we designed it that way.
• 16:14
  By the way, that's massively cheaper than anyone else offering that combination of technologies. So we like that.
• 16:22
  We think that is the new baseline that should be standard of care, and I personally, looking at the data, have a very high conviction if every American would get that over forty, you could decrease healthcare costs by at least two trillion dollars, and you could save at least one million lives a year in the United States, and I'm happy to- Wow...
• 16:42
  defend that in front of anyone who, who knows anything. So that, these are very solid numbers, and I think that's what we can get to. So now we know what the solution is.
• 16:52
  The price is too high, but, but if you can afford it, I highly recommend to get it. Now the job that we have in the next ten years is bring that down to ninety-nine dollars a month- Mm... that we want.
• 17:06
  And that's absolutely possible. On a first principle level, it's already clear that it's possible. That's just incremental, you know, cost curve, driving that down and scaling it up.
• 17:16
  I think in three years, if we had a million patients, which is very ambitious, of course, but I'm just saying if we had, uh, if you give me a million patients a year
• 17:26
  and give me three more years to drive down cost curve, we could already deliver that system at ninety-nine dollars a month. Wow. A- and just remind me about the current costs elsewhere.
• 17:37
  You said that that five thousand a year, um, might seem like a lot to somebody hearing it, but it's actually a huge reduction on the alternative. So what, what is the alternative?
• 17:47
  I mean, if you, if you look at, you know, more advanced executive health programs, you're easily talking about six thousand to ten thousand dollars, and they, they are not even close to what we are delivering. Mm.
• 17:59
  What, in terms of on the imaging side, full body MRIs, AI enabled full detection with radiology review and primary care connectivity of all the data.Then on the genomics side, right, you, you, there are people if you buy a whole exome clinical grade, not some like over the counter stuff, you're easily paying between two and five thousand dollars for that alone.
• 18:19
  That's not including pharmacogenomics. Then you have liquid biopsies that, you know, sell it from, from a thousand to five thousand dollars each. So if you add this all up, you're, you're easily getting to...
• 18:30
  You also need top-notch physicians who in the end look at the entire thing and write a summaries report, which is very expensive because who does that? Yeah. And so that's all included in Serenity.
• 18:43
  So I would say we know other people who do pretty comprehensive executive checkups, they cost, you know, easily nineteen thousand, twenty-five thousand a year. Yeah.
• 18:52
  I don't think they have what we have, so that's not even getting the same quality. You've talked about the value of an individual getting this peace of mind, this am-amount of data guiding their health.
• 19:06
  Talk to me about sort of the, the, the positive knock on effects of millions of people getting that data and maybe contributing to the advancement of science. Well, there are two aspects to it.
• 19:20
  First of all is, of course, the primary healthcare effects. Like if you look at cancer, doing that in cancer would knock cancer out of the top ten causes of death, and right now it's placed number two, going towards one.
• 19:35
  Wow. Like that alone, like think about what that means if cancer is not a thing anymore. Mm. And that's exactly what this would achieve. Um- Because of earl- because of early detection. Yes, exactly. Okay.
• 19:46
  So that's important for people to know. Like, if you have a system like that, that's our one and best shot to defeat cancer. It's not treatment, it's early detection, all instances, or in as, like nearly all instances.
• 20:02
  The survival rates you see go dramatically up. If you have a stage one breast cancer, you have a ninety-nine percent chance of, you know, five-year survival, and long-term survival also looks tremendously good.
• 20:14
  If you have the same cancer late stage, you're talking about less than ten percent survival. Yeah. So the reason is if, if a tumor is early stage and local, you just cut it out and s- you're, you're done. It's just gone.
• 20:26
  But if you let it metastasize, and that happens not necessarily just in stage four, it can happen as early as stage two, but there's stage three where you can't control it anymore. Sure. Sure.
• 20:37
  Then you have a huge problem. So it is our best path to defeat cancer. So that's on the patient side.
• 20:44
  So I was, I'm curious about on the research side, what happens when that many people are getting genomic testing and it's being entered into the system?
• 20:55
  I don't know if that's the QuantGene system, the, the Serenity system, but, but how do you use that data? You can imagine when you think about thirty million data points we get out of whole exome, so nucleotides, right?
• 21:09
  That we, we see unique data points in your genome. Imagine you have that data set across, let's say ten million people,
• 21:16
  and you also, because it's Serenity, follow them throughout their medical journey, and then you have all these individual genetic data points and can connect and correlate them to the medical journey, the outcomes, the diseases that occur.
• 21:30
  That is the most valuable data set in medicine. Mm. Because from there you would suddenly see all genetic connectivity across all medical occurrences. And from there, then you know what to do.
• 21:43
  Then you get the power of, um, foresight. Then suddenly you can say, "We understand, actually now we know what that variant does," right? It increases your risk of ABC, what decreases your risk.
• 21:54
  It also can tell you, well, people with that variant, if they get a disease, maybe they don't have a higher risk for that disease, but once they get it, a certain treatment type is now not appropriate because it always leads to bad outcomes if you had that variant.
• 22:09
  So it's much more complex and much more advanced what you can do with it. Mm. What would be the greatest unlock to bring this from vision to full reality?
• 22:20
  I mean, you're, you're on the journey, but what needs to happen next to make this- I think the Apple technology trajectory and R&D approach completely under control, so there's not much that needs to happen there.
• 22:33
  Mm-hmm. I think it's full on commercial adoption.
• 22:36
  The, the only thing that we now have to achieve is maximum adoption and maximum growth because the price point, the, and the quality and the power behind it goes up exponentially the more people use it.
• 22:51
  And so our job is to how do we get it at this five thousand or two and a half thousand dollar price point out to as many people as possible to as early, quickly as possible get to the next point that we can lower the price ten percent.
• 23:05
  How can we then get it to fifty thousand people, lower it another ten percent, then to two hundred thousand people and so on. That's the great mission of QuantGene is purely about commercial and patient adoption.
• 23:18
  And this what drives down the cost and drives up further quality improvements. What's the greatest misconception that people have about genomic testing and genomic medicine?
• 23:32
  Well, I think people are confused about what that actually means, right? Because we have all these consumer things out there like Ancestry and 23andMe, they confuse people, then Grail is confusing.
• 23:45
  So I think it's important that genomics is not a test. Genomics is a whole new discipline- Mm...
• 23:53
  an enormous technology platform in medicine, and the larger a piece of that technology platform is being applied to you, the safer you become. And that is what people need to understand.
• 24:05
  These are billions of data points we can get from liquid biopsy, blood cells, for example, tens of millions from hereditaryThis thing needs to be implemented in medicine.
• 24:14
  It needs to be packaged so you can understand it and buy it. We need to partner with the best concierge docs so they can help translate that into care.
• 24:24
  I think that's the biggest-- People have to understand genomics is as big as artificial intelligence or crypto as a, as a plan. Wow. That's a, that, that's a soundbite. In twenty twenty-three, that's one we'll,
• 24:37
  we-we'll lead off with. Um, how is this a, a business and market opportunity for providers and testing centers? Well, I give you one, you know, sense for what, what it means for providers. If you take on Serenity,
• 24:55
  you're making up to a thousand dollars per sale in margin, in retail margin.
• 25:01
  So what we see is with our partners, a typical concierge practice, if they implement Serenity effectively, they can increase their bottom line by up to forty percent.
• 25:14
  So that's a huge incentive, and the same is true for, for premium wellness retail.
• 25:19
  Because it's such a high-interest product, high quality, uh, and high, high medical value that patient, patients wanted, and we build a good margin for our partners, so we have that distribution power.
• 25:31
  You also, of course, more important than the money, but money's always important, you have to run your business somehow,
• 25:37
  uh, is your patients are gonna be very happy because if they go to a premium wellness retailer or a premium doctor, they expect to get something that is really much more advanced than what they can get with their random primary care doctor, and you need to deliver against that as their partner, as a doctor, and that's why our partners love us.
• 26:00
  It's a, you know, turnkey solution they can plug in, and suddenly their patients come back and say, "Oh my God, you know, Dr. Plaster is the best. He helped me,
• 26:09
  uh, get something I've never seen before," all these data points, maybe the imaging and- Yeah, and, and not just that data, but the, the wraparound knowledge to move forward with better preventative health. Absolutely.
• 26:24
  And it has nearly in all instances there is some important thing that, an important implication that the patient walks away with and says, "Wow, I-I'm glad I know that, and I'm-- I know what to do now, and I come back next year to get checked."
• 26:38
  Yeah. [sighs] Knowledge is power, and even if the answer is there's nothing to worry about, then that is itself important knowledge. It's peace of mind. I tell you, when I do this every year, um,
• 26:51
  it is very, very powerful because we always feel, you know, when you get over forty and then you, you know, God, I, I hope there's nothing wrong with me because- One...who knows?
• 27:02
  And I know you can't have any symptoms for a long time, and then it's way too late. Mm-hmm. How do you get that peace of mind to know you're actually okay? And the answer is you need a massive
• 27:14
  kind of metaphoric X-ray of your body. You need to understand everything, and then you know what's going on, and then you can take action.
• 27:23
  Well, you know right now, this year, I was completely okay on a single molecule precision level, so let's see next year, and I see if anything goes off the rails, if I see slight elevations in tumor mutations, which happens before you have a tumor, you know that, and then you know, well, I-- maybe I should take this more seriously and try to drive that down by next year.
• 27:44
  You know, lose weight, watch my diet, watch my stress, like do all the things we know we have to do.
• 27:49
  But now you see these data points where you say, "Ooh, maybe it's time to act," and that is incredibly empowering for people. That's amazing. Well, Joe, that's our time.
• 27:59
  This is an amazing platform you've built over the years.
• 28:02
  I love your journey that you had to be creative, you had to stay in business during COVID, and that allowed you to get to where you are now and knock at the door of bringing this kind of genomic testing and
• 28:17
  data and knowledge to potentially millions of people. So I applaud the work, and I appreciate you giving me the update. We are right at the precipice of something very important in medicine, so thank you so much, Logan.
• 28:29
  I appreciate it. Joe, I'm gonna be watching very closely this year, and, uh, I wish you all the best. Thank you so much. [upbeat music] Thanks for listening to Starter Health Now.
• 28:42
  We'll be back again with another episode next week. [upbeat music]