Each one has a genome
The genome will tell you everything
Lyudmila Kolbina, "Expert Ural" No. 20-2014
The Perm company "Custom Capital Group" undertook to invest three venture projects in different segments at once. The loudest is the creation of a genetic profile of a person and the prevention of seriously curable diseases. By the end of the year, "Custom", whose main business is financial services and development, intends to increase the share of venture projects in assets from 5 to 10%. As the company's CEO Sergey Brovtsev explained, when finances are in a fever and real estate does not feel the best, business is looking for new promising, albeit non-core areas that do not depend on the crisis: "We are changing the structure because we expect a long local bottom in the financial market this year, it is difficult to hope for rapid growth after it." How "Custom Capital Group" is preparing to go through the bottom and why it invests in genetics, says Sergey Brovtsev.
About life at the bottom– Sergey Vladimirovich, why are you predicting a bottom, and even a long one?
– The situation around Ukraine is escalating, our markets have already fallen significantly in relation to the world, their assessment is not always adequate for both political and other reasons. Most likely, if the negative development of the scenario in Eastern Ukraine continues, there will be a collapse in the markets, after which the moment will come when it will be necessary to buy. For financial markets, this is an opportunity to form long positions, and we are preparing for this. If this does not happen, there are prospects for the capitalization growth of almost all issuers.
Both strategies allow you to behave quite flexibly depending on the news background, using various tools (arbitrage transactions, structured products), to play both down and up. But now it is impossible to build a long–term plan and say - it will be so. Such a time: politics is in the foreground. We believe that real estate can fall by a maximum of 20-30% from today's prices, and financial markets – at times if it gets really bad. Accordingly, the risks of sitting in real estate assets are significantly less than in the financial market. And the market, thanks to or despite the political crisis around the Crimea and problems with banks, has grown, has become more liquid, the population transfers savings to real estate, considering it a safe place to store assets. Prices and demand have been growing significantly in this segment for the last two months. In the development of a long-term asset development strategy, we plan to complete and sell the bo?the largest part of the residential complex in Perm is 30 thousand square meters of housing. This project is a priority.
– What are the shares of real estate and development in the company's asset structure?
– This year we plan to change the ratio of these sectors and financial by 60% to 40% instead of the current 70% to 30%, we will sell part of the assets. At the same time, 20% of financial instruments will fall on the loan fund, another 20% – on the stock market assets that we manage.
– What determines the proportion of assets?
– Two factors, market and non-market. We learned from the crises of 1998 and 2008: when the situation is unstable, the financial system is also unstable and non-dynamic, so we rely more on development in our strategy.
Within this segment we are building apartment complexes, townhouses, commercial real estate. Residential in large complexes prevails – as more liquid, we rent office space. All together, this makes it possible to feel calm in times of crisis: if some sector falls, we generate cash flow at the expense of others.
Although the average profitability in real estate development is not so high, so far we do not see the need to expand our participation in the financial market. But we also have land development, which has the highest marginality. The Group owns land plots in Perm and Krasnodar Territories, Orenburg and Tula regions. Such a line in development allows you to feel stable, to close virtually the entire range of investment.
Crisis formats– What venture projects have you decided on?
– Last year, we started three such projects that are not peculiar to us: we created the company "My Gene", a chain of children's stores "Is it not enough?" and opened a restaurant of northern cuisine "Expedition" in Perm.
– Let's start with the food. What is the concept of the restaurant, in what price segment is it?
– We position ourselves as a restaurant-club of like-minded people, investors who develop the spheres of recreation, tourism, travel. The project is interesting for the unique northern cuisine developed by the Swedish chef, it contains only natural products: stroganina from nelma, muksun, venison, Far Eastern scallops. There are no analogues in Russia. The upper segment, because the products are difficult to get, by definition they will not be cheap.
– How many restaurants and where are you planning to open?
– There are four open in total: in Moscow, Novosibirsk, Perm, Minsk. We are discussing with the partners-owners of the Expedition (Ruyan company) construction of a restaurant holding. We are negotiating the opening of restaurants in Yekaterinburg, Nizhny Novgorod, St. Petersburg and London are planned.
– And "It's not enough?"?
– This is a network of children's commission stores of a new format of the European level, another joint project with the Expedition. The slogan "the choice of reasonable moms" is clear: children grow up quickly, the store allows you not to throw away things of good quality, sometimes with tags. This is also a club format, it provides clubs for moms, educational and developmental programs for children and parents. But first of all, this is a store from which you can call a courier at home, he will evaluate and accept things. On the website or on the phone you will be informed about the sale, the money will be transferred to the card. Through the store, you can give things to charity. I think it is an absolutely win-win format in times of crisis, within its framework the project team continues to develop products. At the first store in Perm, we are testing the technology, since it is a startup. We are thinking of developing a franchise history – there is a flow of applications. Starting next year, we will open ten of our stores and 20 franchises. In total, there should be at least a hundred stores across the country.
Twist the DNA– The loudest project is the analysis of the human genome to determine the predisposition to diseases.
What is the plan?
– There are two companies in it: LLC "My gene" (last year "Custom Capital Group" became a co–owner - acquired 30%) and CJSC "Genoanalitika" (recently agreed to purchase 30% of shares). "Genoanalytics" was created in 2007 in Moscow by a group of scientists of the Russian Academy of Sciences and businessmen. Performed scientific work on fundamental and applied topics of genetic orientation for RAS institutions. Such works included studies using high-density micromatrices and genome-wide sequencing (techniques for determining the nucleotide sequence of DNA and RNA to obtain a formal description of its primary structure. – Ed.). Technological platforms and methods of performing genomic research, which have been constantly improving since then, have allowed the company to develop a new service – personal genetic research.
We are creating a single holding company in which "Genoanalytika" is engaged in production, develops technologies and scientific base, and "My Gene" promotes the brand on the market and is engaged in sales. We are trying to understand the volume of the market, to build a pricing policy. In the future – the creation of a federal network of 60 branches, services for a full range of genetic analyses: human genome, predisposition to genetic and intractable diseases, clarification of genetic and ethnic origin, other products.
In the USA and Western Europe, such services appeared three years ago. Now Russians will be able to order a personal genetic study, to look into the world of their own DNA. This year, 12-15 representative offices in the regions are starting to work with medical centers.
There are two research directions in the product line: "My gene is ethno" and "My gene is health". The direction "My gene – ethno" uses methods of genetic genealogy. The product allows you to get into your roots, determine ethnicity, haplogroup (from haploos – simple, single, unpaired. – Ed.), to understand the lines of inheritance, both within the family and on the ancestral tree of mankind – to determine your national composition, those peoples who are involved in your blood. This is especially interesting for people who do not know their roots, have lost relatives.
The health-related product line is aimed at identifying possible personal genetic risks, predisposition to diseases, and reactions to medications. On high-density chips, we can simultaneously look at 150 diseases, tell what a person is sick with or may get sick if he does not competently build a lifestyle.
"My gene – health" allows you to identify whether you are a carrier of the most common monogenic diseases. This will give you accurate information about whether, for example, you have a risk of giving birth to a sick child and how to get around this problem. Today, genetics allows issues with autistic children and others to be solved at the planning stage.
The technology of a non-invasive method of prenatal examination, capable of detecting and diagnosing fetal chromosomal abnormalities in early pregnancy (Down, Patau, Edwards syndromes) by the mother's blood, appeared two years ago when American scientists discovered that freely circulating baby DNA appears in the mother's blood at the sixth week. By the second month of pregnancy, it makes up 5-10% of all freely circulating DNA: this is enough to analyze it when taking a blood sample from a vein.
Genomic DNA analysis is performed on sequencers and, by mathematical calculations, it is determined whether there is, for example, Down syndrome, and other abnormalities are diagnosed. In this way, absolutely without risk for the mother and the unborn child at the 8th week, it is possible to determine whether he is healthy. The technology is only advancing now, only five companies in the world have learned how to implement it, three in America, one in China, and only we in Russia.
But in our country, another – invasive – prenatal diagnostics is now being widely introduced for early intrauterine detection of chromosomal and monogenic diseases. Under local anesthesia, under the control of an ultrasound image, a puncture is performed, that is, a puncture of the anterior abdominal wall to take the test material. Due to the risk of possible complications, not all pregnant women agree to a frightening procedure.
In terms of accuracy – 99.7% – the method of non-invasive diagnostics is comparable to invasive, has shown itself well on the market, is gaining momentum. Over the past year, together with clinics in Moscow, we have done more than a thousand tests. We have opened a representative office in Yekaterinburg, we are negotiating with clinics everywhere about switching to non-invasive diagnostics. The "My gene – health" line, in addition to the monogenic diseases I mentioned, reveals a disposition to 70 more polygenic diseases, including cancer, diabetes mellitus, Alzheimer's. Such information about children is especially important, it allows you to protect them in the future.
– Are the developments underlying the project know-how?
– It is clear that the basic technology is common: the analysis is carried out in the laboratory on imported equipment. But the technologies of calculations after sequencing are different for everyone. In genetics, only 20% of the result is determined by the laboratory, 80% by bioinformatics, mathematics, a huge complex system of calculations that process what the laboratory has shown. Here in this part we have patents and our own technology. For example, in the dot-test of American competitors, which they are trying to sell in Russia, the result is determined not only by the blood of the mother, but also the blood of the father is needed. They cannot detect diseases in those who have done in vitro fertilization, and in the case of surrogate motherhood. Our technology allows it. Over time, it improves and becomes cheaper. Deciphering the complete genome for the first time in 2003 cost 3-4 billion dollars, several countries did it together. And now the price abroad is five thousand dollars. The dot-test in Russia will cost 35 thousand rubles, very soon, I think, the price will decrease by half. We will come to the conclusion that everyone will have their own decoded genome, and prescribe medications only according to the genetic map.
– What is the stage of the project implementation?
– Initial. We have opened four branches: in Perm, Yekaterinburg, St. Petersburg, Rostov-on-Don, and we see interest in these products throughout Russia. Developed other products. We made a new chip on which all the tests can be performed. Sitting in the office, a client will visit our website, call a courier with a test tube, spit into it – and that's it. Further communication goes through a personal account, we post the results there, provide advice to a geneticist, which profile doctor to go to. It costs all 30 thousand rubles. We prepare credit programs in partnership with banks.
– What hinders the development of the project?
– Technology runs far ahead of the knowledge of doctors and the population. Therefore, we are preparing training programs, our researchers go everywhere and give lectures, doctors are interested in the topic. For example, an oncologist, having received such an analysis, correctly orients himself and orients the patient. There are types of cancer that are well treated, the main thing is not to miss. It is possible to correct monogenic diseases in ophthalmology in time. Often people think that their eyesight has deteriorated because they read books at night, and they have a congenital disease. Patients will spend more efficiently on treatment. At the state level, we are pushing the idea of retraining medical personnel. The topic should be taught in medical institutes. There is knowledge that we are ready to transfer. We are creating our own educational center, preparing a program.
In Moscow, our laboratory is located in the technopark of Moscow State University, we are working closely on this topic with scientists and practitioners, clinical geneticists and geneticists. I will name Academician Konstantin Scriabin, member of the Presidential Council for Science, head of the Institute of Bioengineering of the Russian Academy of Sciences in Moscow, a world-famous geneticist; Egor Prokhorchuk, Doctor of Sciences, professor, head of the laboratory at the Kurchatov Institute. The Institute of Human Stem Cells works with us, as well as institutes related to cardiovascular diseases, oncology.
Horned Index– Besides people, have you also taken up animals?
– This is a completely new topic for Russia, very much in demand by agricultural producers. Last year we started a project to create a Russian cattle genomic index. Today, 11 countries in Europe, America and Canada have such an index in the world that allows genomic selection to be carried out quickly, efficiently and cheaply. We feel that this is a very relevant direction, but, alas, unnecessary for the state. Agroholdings really like to import breeding bulls from abroad - subsidies go to them. I have been working on this topic for a year and I see from the inside all the problems of breeding work in Russia: there is nothing complicated, everything is elementary – if it were done.
This is a long project. In order for us to be able to fully use genomic assessment, it should take five years due to the specifics of the industry. But no one wants to look five years ahead, everyone wants to have money today. We have not found understanding with domestic specialized institutes that have long been out of technology and science. They cannot advance breeding with the old methods, and they do not allow the new ones to develop. For some reason, they think that we want to take away their bread, they see us as competitors. But there is no competition in the segment, we are also alone here.
– What is your goal in this project?
– We in this chain were ready to occupy a small niche as a laboratory doing analyses, and that's it. However, we see that no one is going anywhere here. And we drove this wave – and the segment took a step forward. So we will develop new technologies on the basis of breeding centers. Last year, 650 samples of genetic material of breeding bulls of domestic breeds were collected from all over the country. Having reached a thousand, having created a genomic index, we will be able to assess their genetic potential at the time of the birth of animals and leave only the best for the growth of the livestock. Moving in the usual way, only after five years they will know the quality of the offspring. And genomic selection allows you to save huge amounts of money on a national scale. In addition, it is strategically important for the safety of dairy farming in Russia: what if tomorrow we cut off the supply of all imports?
For each bull, you will have to collect a database, monitor his five daughters, how much and what kind of milk they give. Last year we won a grant and we have to do this work together with the state at the Uralplemcenter near Yekaterinburg. On this path, it is necessary to solve the problem of data reliability in the agro-industrial complex. The trouble is that farms are amicably addicted to postscript. According to the legislation, if you milk at least 1% more milk during the reporting period, they give subsidies.
How to throw out the old– Let's go back to the human genome.
What does the market look like in Russia?
– The market is in its infancy, because, as noted, people are not well informed about these products. The test for pregnant women is progressing dynamically, but many do not understand why a genetic passport is needed. While there is no point in opening a laboratory for 100 thousand genetic analyses per year – there is no such market. But according to our estimates, it is already possible to sell 100 thousand dot-test analyses. It is prescribed by 10% of pregnant women.
According to the products "My gene – health", doctors of the state clinic need instructions from the Ministry of Health of the Russian Federation and regulatory documents that such methods can be used. And that's all – the state is not required to invest in technology, private companies do it, they form this market themselves.
– Will cheaper technologies accelerate the market, turn people to them?
– The more players appear, the faster these products will become cheaper. Nobody makes analogues of the dot test and the "My gene - Health" line in Russia, here we are pioneers. The company "My Gene" is the only one in Russia that performs genetic analyses in the Moscow laboratory at the Technopark of Moscow State University, the sampling of which (saliva in a test tube) is carried out in the regions. We really don't have enough competitors in Russia.
In Yekaterinburg, an invasive test costs 22-25 thousand rubles. If 1000 dot-tests are ordered from us tomorrow, they will also cost 22-25, not 35 thousand rubles. It all depends on the volume of analyses that you do on expensive equipment. At the same time, the cost and cost of production change significantly. The faster this process starts, the faster the new product will start to get cheaper, the market will expand. I think in two years the dot-test in all laboratories will fall in price to 15-20 thousand rubles.
But the problem is that many regions have invested a lot of money in invasive diagnostics over the past five years. The head doctors of the clinics say: you have a super method, but we have recently received a new fleet of equipment for invasive, we have allocated floors for it – will you order everything to be thrown out? So the technologies of yesterday stand in the way of modern ones.
Today, the flow of information about new technologies in Moscow and the regions is an order of magnitude greater than a year ago. We conclude contracts with private clinics and state medical centers, we teach these technologies. The process is expanding, and at some point they will be in all clinics. So far, private clinics are the largest category.
– How much has been invested in the My Gene project?
– By us – 150 million rubles, within three years they will pay off. Creating a project from scratch would require 10-15 million dollars. The market is expanding, new clinics and clients are coming. There is a positive trend in sales. We are sure that these technologies are the future, there is simply no escape from this. But the admission of foreigners to this market, to genetic information about the population, should be limited by the state – without comment.
– What are the main risks of a venture investor?
– The biggest one is that due to the lack of information of consumers, sales may be lower than we plan. We estimate the Russian market in sales of such analyses with the right marketing policy from 2 to 3 billion rubles a year.
– Will the market capacity increase?
– If in ten years even 1% of the population wants to do such an analysis, it will be 1.5 million tests. Even if by that time their value drops to $500, that's $750 million. That is, the market will grow to 30-40 billion rubles. But in order to do such a number of tests, you need serious investments in the laboratory.
– Are you ready for this?
– If the market grows. Last year we bought a sequencer for a million dollars. As soon as its volume is filled, we will buy a new one. We have four such devices, and the Chinese sequencing concern BGI-Shenzhen (formerly the Beijing Institute of Genomics, a huge genetic center) has 250, it holds half of the global sequencing market. But everything there is financed by the state. Last year alone, the Chinese performed several hundred thousand tests. And in Russia there are two thousand of ours together with imported ones. The market, I am sure, will grow at times. Today's dynamics shows that it grows by 20-30% every month.
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