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Healthcare’s Personalized Future with Spencer Wells

7investing founder Simon Erickson interviews world-renowned geneticist and anthropologist Spencer Wells about the important changes taking place in health care and what they will mean for investors.

June 4, 2020 – By Simon Erickson

Health care is undergoing a revolution. A recent focus on genomics is allowing doctors to more objectively diagnose patients and more proactively keep large populations of people healthy. Genomics technology has entered the consumer space too, with direct-to-consumer kits like 23andme and providing people with insights about their genome and heritage.

Spencer Wells was instrumental in developing many of these trends. As an Explorer-in-Residence at National Geographic, he was an early innovator of using genographic kits — studying DNA from people all across the world to map out the migrations of mankind’s earliest ancestors. Spencer went on to found a company called Insitome, which also gives consumers insight about their genome and their heritage.

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But there are even bigger movements underway, as genomics moves into the healthcare industry. Several genes are predictive of hereditary disorders, which are medically-actionable for doctors. Drugmakers are interested in using genomics to characterize specific diseases, so they can prescribe (very expensive) personalized medicines as a treatment or a cure. And 2018’s “Babies Born” email from He Jianqui of China has unleashed Pandora’s Box of an ethical debate on how gene editing could and should be used on humans.

An a geneticist, an anthropologist, an author, and an entrepreneur, Spencer has an extremely informed opinion on what’s in store for the future of healthcare.

In an exclusive interview with 7investing, Spencer describes the permanently changes that have taken place in the Direct-to-Consumer genomics industry and explains how genomics is now catching on with hospitals. He shares his thoughts about the technology behind DNA sequencing, the personalized medicine movement in pharmaceuticals, and the importance of the ethical debate in shaping the future for gene editing.

Spencer also describes what the coming changes could mean for genomic sequencing leader Illumina, as well as for international drugmakers like Roche.

And as a lifelong fan of blues music, Spencer shares some of his favorite musicians and the best live concerts he’s ever attended.

We hope you enjoy our 7investing podcast! Please send your ideas and questions to or submit them here!

Publicly-traded companies mentioned in this podcast include: $ILMN, $PACB, and $RHHBY. The 7investing team or its guests may have active positions in one of more of these companies.

This podcast was originally recorded on May 29, 2020 and was first published on June 2, 2020.

Complete Transcript

[00:00:00] Simon Erickson: Hi everyone! 7investing founder Simon Erickson here. And I am extremely honored and excited to welcome my guest this morning.

Spencer Wells is a geneticist. He’s an anthropologist. He’s an author. He’s got about 75 other titles, too. But I prefer the one that’s just “really smart science dude.”

Spencer, it’s really a pleasure to have you here on the program this morning.

Spencer Wells: It’s great to be with you, Simon. Good to talk to you.

Simon Erickson: Spencer, before we get started, we have a lot of exciting things to talk about. We want to talk about genomics and what the technology for that looks like. What the future of American health care looks like.

But maybe let’s start with a “thank you” for calling from the islands of Indonesia right now. I’ve been following your blog.

I know that you’ve traveled the world your entire life. But this just seems like the next chapter of your adventure. Can you start us off by telling us what you’re up to out there and how it’s going?

Spencer Wells: [Laughs]. No, it’s a good question. My wife and I were living here. We are not just sitting at home in Austin, Texas, which was our home until a couple of months ago.

You know, I worked with National Geographic for over a decade and had this amazing opportunity as an “Explorer in Residence”, as they call it. To run travel options for National Geographic Expeditions. Which, you know, some of you probably get those brochures and see the beautifully illustrated pictures of polar bears. And you’re on a cruise and you see penguins. And what I did – what I really specialized in was private jet expeditions. Because I think the work that I do as a geneticist studying ancient migration patterns all over the world has that global reach.

And so I designed and led nine of those for National Geographic between 2005 and 2015, when I left the society. And when I left, I can tell you, going on one of those trips for the first couple of times is pretty cool. It’s awesome. You’ve got 80-plus passengers and some crew packed into a 757. And so that equates to very nice leather upholstered business class seats. And you go to some amazing locations.

But, you know, once you’ve done a couple of those – especially if you go to the same locations – they start to feel like very luxurious bus trips. Because you’re dealing with a lot of people. The logistics involved in the luggage alone, I don’t even want to bore your listeners with that! [Simon laughs] But getting everybody’s luggage from the plane to the right hotel room involves two staff members working full time in addition to all the customs stuff that you have to get through too.

So one of the things that I wanted to do was to create a travel company that allowed us to do private jet trips. But on a more, kind of, regional scale with smaller jets.

And so we’ve just finished our first jet trip in Indonesia using a G550, Gulfstream 550, which is an awesome plane, by the way, that we chartered out of Singapore that was flown by the captain who flies the prime minister of Singapore on that very plane that we flew on. It was awesome. And we had a great time. Toward the end of that trip, all of our guests who hail from the US wanted to get back to the States. This was around March 16th, 17th, when things were really starting to look grim. And so we got them out on Emirates via Dubai and they all made it back happy and healthy and had a great time. And we thankfully have customers for life as a result.

But my wife and I, when we came through LAX on February 27th, and we now know that the virus was circulating all over America by late February. There were guys coughing into their hands and taking our passports and searching our luggage. Everybody’s crammed in with no masks on. And we’re like, we’re not going back to that.

So the two options were: my initial choice would have been Singapore. Because Singapore seemed to be doing the best job when we first landed in Southeast Asia, beginning of March. But it was the dormitory cases were picking up at that point. And it didn’t look like the best option. In addition to the fact that we didn’t want to go into a 14 day lockdown in an expensive hotel room in Singapore.

And I said, “listen, we’ve got this credit at this really nice Aman Hotel, the Amanwana, on Moyo Island, a remote Indonesian island. Where we can’t get a refund for the guests, and we’re either going to lose the money or we can use the credit.

And so we went there and it’s been fantastic. We spent two and a half weeks there and have since moved to Lombok, where we are now. And so literally, I can look across through our kitchen window, and see the island of Bali. It’s this ancient, bio-geographical barrier called “Wallace’s Line” that divides the fauna of Australia on the East and Asia on the West.

It’s been great. And we’re growing vegetables in our garden. And we have adopted a kitten that was a stray that wandered in. We’ve adopted a puppy that was a stray village dog. And gotten them all their shots and dewormed them, and we’re building a life here. It’s fantastic.

[00:06:25] Simon Erickson: I love that story. I also love the title of “Explorer in Residence.” Which to me sounds kind of like an oxymoron. You’re all over the world, so I guess that’s the residence for you. [Spencer laughs.]

Another title you have is entrepreneur, Spencer. You’re also the founder and CEO of Insitome. Which your company’s mission is “to uncover the genetic story written into our DNA.”

This is a direct-to-consumer opportunity for genetics. Could you tell us a little bit about what this company is and also what your goals really are for it?

Spencer Wells: Yes, so it’s very interesting that you’re asking me this question right now.

We have wound down the for-profit company, the Delaware C Corp, which was funded by Warburg Pincus in a very complex deal. Because they’re a big PE firm and they don’t typically fund small startups. I won’t go into the details of that.

Anyway, the consumer genomics industry went through a massive shift last year. In part because people became much more concerned about privacy, coming out of the Cambridge Analytica Facebook social media scandal. And in part because, I think we hit the peak of early adopters. You know, people who were primarily interested in ancestry. And this is something we encountered when we were trying to raise our Series B. We talked to a lot of VCs and then they said “so do you think the growth rate can go on like it has?”

I mean, my God, in 2017 and 2018 – it’s been that long and just the time is going so quickly these days – 2017 and 2018, the two highest selling products on Amazon, outside of Amazon Alexa and their own Kindle devices and so on, which they’re pushing constantly.

But the two highest-selling products were 23andme and Ancestry. Ancestry in 2018 alone sold four million units during Black Friday to Cyber Monday.

That’s unheard of! When I founded this industry in 2005, when we started selling genographic kits, that was two years before 23andme.

I thought if we hit 10,000 a year, we’d be lucky. The CEO of National Geographic, who had formerly been the CEO of Time Life, said “if you sell a thousand, you’ll be lucky.”

To sell four million over four days during a holiday season? I mean, that’s crazy! It’s absolutely crazy.

And so that kind of plateaued out. And then, there was this follow on from “if these services are so cheap…if you’re on Facebook and it’s free, if you’re on Twitter and it’s free…how are they paying for things?”

And the answer is always, “you are the product.” You know, *your data* is the product.

So I think a lot of people started to put two and two together, beginning of 2019. And they’re like, “OK, so our genetic data is the product.” And so sales have dropped off significantly.

I made the decision last February, February of 2019, seeing this coming, seeing the things that were playing out, to convert us to a 501(c)(3). That’s what we did last year.

I couldn’t imagine how long it would take trying to do it now. With what the IRS is going to be dealing with over the next two years with late tax returns and unpaid taxes. But thankfully, we were granted 501(c)(3) status last fall. And we have an institute that has contracts with companies and nonprofit organizations and schools. So that’s our way forward through all of this.

So Insitome as a for-profit, Delaware C-Corp is gone. It’s no longer in existence. It’s not doing business anymore.

[00:11:18] Simon Erickson: I first met you, Spencer, at South by Southwest in Austin in 2017. And I remember talking about genomics going mainstream. And just like you said, 23andme and were selling like crazy.

It seems the use case for those were information, right? People wanted to know their heritage. People wanted to know more information or maybe even for an entertainment reason.

But now, we’ve also seen that a lot of those genes are predictive of genetic disorders. Several of them are medically actionable now. You can actually see things now like breast cancer, ovarian cancer, stuff like this.

Do you believe that there is an opportunity for consumers to play a more active role in their health? Where they’re actually buying these kits not for informational purposes to see their ancestry. But something they bring into the doctor and say, “Hey, I’ve identified something from this report. Let’s talk about it more proactively.”

Spencer Wells: Yeah. I mean, what we’re seeing right now is the very earliest stage of the total disruption in health care. Which needs to come. Consumers need to have more control over their health care.

So it’s interesting. COVID, this whole pandemic that’s playing out, plays a role in all of this. Because it’s kind of a test case.

What cities are finding out is they can monitor outbreaks of the coronavirus by looking at sewage.

Simon Erickson: Interesting.

Spencer Wells: And they can they can see outbreaks before people start presenting with symptoms.

That is something similar to Google tracking people, looking for flu symptoms online. Individual-led health care is the future.

This is what we’ve been talking about in the genomics community for 30 years. For my entire adult career in the industry.

But I don’t think it’s going to come from fitness trackers that you wear on your wrist. And I don’t think it’s going to come from blood tests that you do at a Theranos facility at Walgreens, obviously. Or one you choose to go into your doctor to get.

I think what it’s going to come from is your toilet every morning. Honestly, I think that you stick the right detectors in your toilet bowl and you have a little box that’s on the sink next to that. And it’s got a green light and a yellow light and a red light. And green light means it’s another good day and you’re fine. And yellow light means you should probably figure this out and check the app on your phone and see what’s yellow. And red light means we’re calling the doctor right now and you’re going in for an appointment.

That’s what I consider to be the future of health care in the developed world. You know, it’s like you don’t even have to think about it.

Simon Erickson: And we’ve got ColoGuard: Exact Sciences has got a consumer diagnostic test for colorectal cancer already. It seems like that’s predictive of more of these appearing in the future. Where you’re not going in showing your symptoms to a doctor and getting reimbursed for a visit off of an insurance physician fee schedule. Or something that we’ve gotten used to in the system today.

But more proactively, having a consumer-based diagnostic like you’re describing.

Spencer Wells: You just need the right…It’s just like EHRs: electronic health records. Everything is so fragmented right now in the US. If you just had one company that came up with the end-all be-all solution. The Google Maps of how you would monitor this. Like, does anybody use anything other than Google Maps? Like maybe some diehards use the maps on the Apple phone. But literally, like 99% of the world uses Google Maps. And that’s because it’s freakin awesome, man! [Simon laughs]

There is nothing that’s ever been like that. I had been wishing for something like that for all the trips I’d been on over the years, since I was like 20 years old. And now it exists. And I use it all the time.

You need a company to come along and be the Google Maps for that home diagnostic space.

You need somebody to figure out what is the killer app. What is that “Green light, yellow light, red light” box that monitors everything? Whether it’s occult fecal blood for colon cancer. You know, you mentioned the colon cancer test. Whether it is shed cancer cells for potential early cancer diagnosis. Whether it’s STDs.

I mean, all of that could be figured out with the – allow me to be a little bit out of bounds – like the **** you take in your toilet every morning when you wake up.

Honestly, it’s really that simple. And people would be so much healthier if somebody figured that out. And we have the technology. It’s super simple. It really is.

You just mentioned Cologuard. We know how to do this stuff. But nobody’s putting together that end-to-end solution. And the company that figures that out is going to make a trillion dollars.

[00:17:32] Simon Erickson: And we’ve seen tech companies be very interested in this, right? Google is trying to get closer and closer to the EHR and the patient medical data so they can actually start using that for machine learning and connecting all the dots between those.

We’re starting to see it. We’re seeing a lot of hesitation, of course. There’s this one force that’s very innovative of what the technology can do. And then, there’s also a lot of stop signs of people saying “No. Privacy concerns. Ethical concerns.” Things like this.

Spencer, maybe my next question for you is about that ethical debate.

I mean, we’ve seen CRISPR, for the most part, is in Phase 1 of clinical trials now. Heavily regulated. Heavy ethical debate here in the United States. And yet over in China, you’ve got He Jianqui saying in an e-mail, “Babies born.” We’ve got gene-edited babies. It’s Pandora’s Box has been opened.

Do you think that the progress of gene editing is regional? Based on regulations and different societal beliefs on ethics of genes?

Spencer Wells: It’s not just gene editing. Listen, China has won in the biotech space.

It won over a decade ago. I had a wonderful lunch with a senior Illumina executive. And Illumina is the company that builds the technology that deciphers genomes. And if you’ve ever done a 23andme or an Ancestry test or been sequenced by your doctor or anything else, it’s been done on an Illumina machine. They effectively have a monopoly.

Over a decade ago, I had a wonderful lunch at Torrey Pines in La Jolla, California. Which is a beautiful golf course, and they have a wonderful restaurant and bar. And we had great burgers and a good conversation and a couple of glasses of sauvignon blanc.

What this Illumina executive told me was he had been the one who had negotiated the deal between Illumina and BGI, which is now the world’s largest DNA sequencing facility currently located in Shenzhen. It was originally founded as the Beijing Genomics Institute. But it’s a Chinese powerhouse in genome sequencing.

What he told me was he was so alarmed at the number of sequencers that they were ordering. Even though it meant a huge bonus for him and the company’s bottom line would be much better off. That he actually flew to Washington and explained to the National Institutes of Health and other members of the U.S. government that what China was doing was basically investing in “winning the biotechnology race”. And that if we didn’t do something similar, we would lose.

And the U.S. government told him they didn’t care.

He said, “Spencer, it was one of the saddest days of my life.”

I believe in Western democracy. I believe in liberalism. I believe in all of the things that America and other Western countries seek to uphold.

But China has invested so much in this that you can never come back from that. They’ve been the biggest sequencing facility in the world for years. They’ve done the same thing with CRISPR. And they’ve done the same thing with genetic testing for traits, IQ. They have schools where they track children according to genetic variants, that are predisposed to certain IQs. They’ve done that with sports academies.

America has been hung up on other things for the last decade. I’m a big critic of the so-called “social justice warriors” online. Not because I am an ultra-right person at all. I’m a centrist, you know, fairly liberal/libertarian person.

But I think America has started biting its own tail and focusing on things that honestly don’t matter to the future of the country. And in the process of that, we have created a system where a country like China, that is very focused on the technologies of the future, whatever they might be. And this is not my field, but I know that it’s been happening. China is also very focused on A.I. So biotechnology and AI, big technologies in the future, China’s way ahead of the US. In part, because the US has been focused on bulls***, in my opinion. Pardon my French.

But you know, I don’t know what has happened in America. I don’t know how we lost sight of the end goal. And I don’t know why we gave, willingly gave up leadership in all of these industries. Like, we *invented* A.I. We *invented* biotechnology. And we’ve literally just given up leadership to the Chinese.

And it’s not because I hate the Chinese. I have issues with the Chinese leadership in the way that lots of other people do. But for the U.S. to just literally have a company like Illumina go to them and say, “do you know what you’re doing?” And for them to say, “we don’t care.” I mean, it just makes me want to cry. Like, as as a geneticist. I mean, this is my field. It’s like, “oh my God, you literally did that?”

So, yeah, that’s kind of my take on the whole thing.

[00:23:40] Simon Erickson: Well, Spencer, don’t start crying on me! [Spencer laughs] Because I know that you personally gave the thumbs up to Illumina. Insitome is working with Helix, right? Which uses Illumina’s next generation sequencing.

Spencer Wells: Yeah. We were. So Helix pivoted very sharply last year. They’re mostly doing population health studies.

And this was part of the reason that we decided to become a non-profit. Because what we do is storytelling. We have a podcast, The Insight. We have blog posts. And we will have white papers coming out – genomic privacy, policy documents, etc – we’ve been working on for the last several months.

It just makes more sense to turn the company into a 501(c)(3), which is what we’ve done. And thankfully, that was completed before the whole economic crisis that’s happening right now. But yes, we’re a non-profit.

You know, Helix was an interesting potential business model. I think they launched a year too late. And we can talk about timing in entrepreneurial ventures. Sometimes a year makes a big difference.

Then it turns out that the consumer genomics space is highly seasonal. Or it was. It’s not anymore. Most of the DNA testing kits tended to be bought between September and January of every year. And they were given as gifts.

Simon Erickson: Christmas.

Spencer Wells: Yeah. Maybe it’s the reason why I mentioned the Ancestry numbers. Like four million over four days. That’s crazy. Those were gift purchases. That has shifted. And I don’t think a lot of people are going to be giving gifts like that. A lot of those gifts were given to older people, who didn’t understand how their data was going to be used.

And so, that was already starting to shift around the time that Helix got itself off the ground. Then, I think there were some misfires on the products they chose to feature. Then they launched some of the lifestyle products. Like can you really tailor your taste in wine to your DNA? Not in my opinion. But some people thought it was possible. Why not just taste it anyway? There were there were some misfires on the marketing front. In my opinion.

But in any case, Helix backed off of the consumer space and they’re now essentially a CRO, contract research organization. So they partner with big HMOs and health care companies, hospital organizations, to do genetic testing on ten thousand, thirty thousand, fifty thousand people.

They’ve got an awesome lab. Their lab team is fantastic. They’re literally the best lab I’ve ever worked with in the consumer genomics space. But the leadership at the top has been somewhat less than visionary. I’ll just leave it at that.

Simon Erickson: Can you follow up on the technology?

So first of all, the marketing is definitely an interesting slant. Because I remembered seeing the the DNA artwork you could have behind your couch. It seemed like everything was over the top, based on your DNA.

Can you talk about the technology, though? Because it does seem like Illumina – and we’re big fans of Illumina at 7investing – it seems like they’ve got more than 90 percent of the high-throughput genomic sequencing that’s being done in the world.

You and I have talked before about opportunities for nanopores or for SMRT sequencing, which has longer read sequencing. And Pacific Biosciences as a company is doing that.

Do you think that Illumina’s short read, next generation sequencing continues to hold the stranglehold that it has on the industry right now?

Spencer Wells: No. Anybody who works in the genomics space knows where Illumina works best. And it works best when you have an existing scaffold to assemble the sequences on. And short reads do a really good job of that. Even though there are long, long pieces of the genome that were left out until recently.

And that’s part of the reason Illumina acquired PacBio. [editor’s note: this acquisition of PacBio by Illumina was later blocked by regulators in the UK]

But I feel like the future is with companies like Oxford. Oxford Nanopore is the kind of revolutionary technology that comes along once in a generation. And I have described it to people, like explaining the actual technology of DNA sequencing to people who do not have a scientific background is so hard. The Illumina technology is; I have to show them a video before they really get it. Like the paired-end sequencing.

Simon Erickson: I have a scientific background and I think it’s hard, Spencer! [Laughs] Even if you have a technical background, it’s hard to understand what’s going on.

Spencer Wells: But people get the the Oxford Nanopore technology if you simply say, “think about those little plastic blocks that you used to assemble as a kid with different shapes. And you would plug them into each other. One would be square and one would be diamond-shaped. And one would be round. And I’m like, imagine pulling one of those through your fingers and you can literally feel the shape of it.

And they’re like, “oh yeah, that that makes total sense.” That’s what Oxford Nanopore is all about.

If they can get the error rate down or they can parallelize it enough so that the error rate doesn’t matter (and it doesn’t for HLA-typing, for viral genome testing, they should own the COVID space, in my opinion. I don’t know why they don’t at the moment. But maybe they’re working on something).

But rapid, cheap, prep-free DNA sequencing like Oxford Nanopore? That’s the future. That’s what leads to at-home testing.

Imagine that. You’ve got a freaking machine you can plug into the USB port on your computer. Or into your iPhone, because they have a version that does that as well.

And you can literally just place a drop of saliva or blood and you can test yourself for anything. That’s cool! That’s the future.

It’s not labs with $500,000 machines. And I love Illumina. OK, Illumina is not a great company scientifically. Honestly, they acquired their technology. They didn’t invent it in-house. They improved it. And they’ve done some great engineering tweaks. They’re a bunch of engineers and marketers and accountants that have done a great job of kind of building a business.

But they acquired Solexa technology. Then they acquired the chip technology that dominates the consumer market now.

Oxford Nanopore, they invented that. They’re really smart. And I feel like if they were acquired by the right Pharma company or large bio-reagents company. Whether it’s Bio-rad or Thermo [Scientific] or somebody like that. If they were acquired by the right company and they have the right marketing and the right budget behind them to develop this technology further, they could win the race.

They could come out of nowhere. They would be like that horse in the last corner of the Kentucky Derby. Like, they’re coming around that that curve, and just boom – they go in for the kill.

Because ultimately, Illumina makes its money from its reagents. It’s the razor model. They sell machines at cost, but they they make it up on the side in all of these reagents they sell you. And that’s the reason people have learned to cut them in half and take all of these little shortcuts to try and reduce the costs.

But that’s ultimately their business model is selling reagents. But if you have a company that doesn’t require reagents to sequence DNA, that’s the future. I mean that’s where costs go to zero. That’s where the cost of a genome isn’t just a hundred dollars, it’s like a dollar.

Simon Erickson: Which unlocks everything, right? Now that the cost is affordable for anybody to do it for whatever they need it to be.

Spencer Wells: Yeah.

[00:33:08] Simon Erickson: Sounds like those handshakes and the M&A discussions are about to get really interesting. [Spencer laughs]

You mentioned the drugmakers; pharmaceutical companies. And we had a really good question. I reached out on Twitter for people to ask you questions.

One of my favorites was from Robert Carter. We’re talking about the shift to personalized drugs. We’ve seen some of the drug makers like Roche spending a lot of money on the diagnostics so they can understand what kind of drugs they need to make. Especially for oncology and really serious conditions.

Robert Carter on Twitter asks, “Will we see the pharmaceutical field change from mass producing medications to designing them more for the specific individual?” I mean, Spencer, it costs an average of over a billion dollars and 10 years to create drugs right now. Is this changing?

Spencer Wells: No. No, I mean, listen. [A cat enters the video] Sorry, we’ve got here the kitten.

Simon Erickson: The kitten has an opinion on this one!

Spencer Wells: Sheeba the cat has decided to appear on camera.

No, I mean, personalized medicine is a misnomer. Drug companies don’t want personalized medicine.

As you just said, the economics don’t make sense. You know? What drug companies want is a hit drug. They want a cholesterol treatment that 90 percent of Americans will be able to use.

They want, potentially – although I think this will shift post-COVID – a CAR-T cancer therapy that they can charge $3.5 million for. I think that amount of money will drop significantly post-COVID.

But no, I mean, they want risk pools. There’s simple calculus that you do in one of these companies. OK, so let’s imagine two potential areas of research we could pursue. One is Type two diabetes. And we know that type two diabetes is 95 percent environment. Lose weight, exercise, eat fewer high-glycemic index starches, and you’re probably not going to get it. If you have a low BMI and you’re healthy and exercise and you’re not eating a lot of pasta and rice and potato chips, you’re probably going to be OK. I mean, people have throughout history, Type two diabetes is a really new thing as an epidemic.

But let’s imagine developing a drug for that in a place like the United States. Where Type two diabetes is a massive, raging epidemic. Particularly in minority communities. But in white, Anglo-Saxon, American communities as well.

And then imagine, could we devote those same resources to developing a cure for malaria in the Third World?

And so what’s the ROI on that?

You’re not going to develop malaria treatments. You’re going to develop marginally effective, Type two diabetes drugs. And Metformin has been around since before I was born. That’s still the best treatment. There’s nothing that’s been developed that’s any better than that, as far as I know. There may be some experimental stuff. But in terms of what you can get going to see your doctor, metformin is still the best possible thing you could take, if you think you might get type two diabetes or if you have it.

And that’s not a lot of success on the R&D side. So we have a known threat that kills millions of people throughout the world: malaria. And drug companies turn their backs on it because they’re focusing on a market where they can make a lot more money.

And pharmaceutical companies in America pump up prices all the time. I read STAT online. You probably do as well. And they talk regularly about the readjustment of prices and what should the price increases be?

And it’s arbitrary. It’s like, you know, “how much do we want to pay ourselves in bonuses this year, as part of the C Suite? Do we want to make $10 million? Or do we want to make 17 million? Or do we want to buy a private jet and make 70 million this year?” Like, that’s literally what it comes down to. And it’s a horrendous industry as a result. It’s, in my opinion, the most corrupt industry in America. Like, it makes petroleum companies look like non-profits.

[00:38:28] Simon Erickson: Spencer, let’s talk about the developing world. Because you’ve seen a lot of it, as “Explorer in Residence, in planes across this world that we live in, with National Geographic.

You were tracking the migrations of people. Right? Trying to connect the dots of peoples’ heritage for several years. Can you tell us about some of the higher level takeaways? It’s a fascinating study. What did you learn from it?

Spencer Wells: We obviously pieced together the details of how our species left Africa, which is ultimately our homeland for most of us, for most of our genome. The story’s gotten very complicated.

But essentially, the story is that modern humans evolved in Africa or somewhere near Africa. Could have been North Africa or the Middle East. But somewhere in the Afro/Middle East region. And expanded out of there in the last 60 thousand years to populate the rest of the world.

And, that’s the over-arching story. And that honestly hasn’t changed in 20 years. What has changed is the subtleties. So, when I wrote my book “Journey of Man” and made that film two decades ago, I said we drove the Neanderthals to extinction and we didn’t interbreed with them. Well, it turns out, we actually did.

So everyone in the world, it now turns up Africans as well, but particularly non Africans, about 2% of our genomes comes from Neanderthals. So we interbred with Neanderthals and with these things called Denisovans, which they are still is somewhat elusive. We have a sense of where they probably mostly lived. They were probably mostly living where I am now in Southeast Asia. Although there were pockets of them up as far as central Siberia.

And they certainly had a larger population size than the Neanderthals. So it turns out that Neanderthals were a chance discovery because most of the early paleoanthropologists happened to be European and they happened to be looking for things in Europe. But Neanderthals were probably a very tiny side branch of what was a much larger Denisovan population in eastern Central Asia. But we still don’t know what a Denisovan looks like. It probably looked a little like a Neanderthal. Probably, I would guess, if we inter-bred with them, as the data suggest, two or three times, they probably absorbed some human DNA as well. So they probably looked like a hybrid between the Neanderthals and modern humans. We’re still figuring that out.

But basically, the overall story is we emerged from Africa. 98 percent of our genomes came out of Africa in the last 60,000 years. And we’ve expanded around the world in two thousand human generations.

We’re much more closely related than we ever suspected before we started doing genetic studies.

And so, that’s an amazing story. That’s, as you say, that’s what I’ve spent my career largely trying to track. I mean, my work in Central Asia, trying to figure out the genetic impact of Genghis Khan. And work I’ve done in Southeast Asia, in the early settlements here. And work I’ve done in North Africa and the Sahara region.

Trying to figure out the paths of migration. How people made it out of Africa and helping migrated back over thousands of years. Yeah, I mean, that’s mostly what I’ve spent my career doing.

Simon Erickson: My friend, that sounds like another “two beer conversation” between you and I.

Spencer Wells: [Spencer laughs]. Yes, we could!

[00:42:26] Simon Erickson: We could continue on that for a couple more podcasts. Speaking of “two beer conversation”, though, two more questions for you.

My first one is you actually could host the two beer conversation. Because you are co-owner of Antone’s up in Austin, Texas. That was a place that I frequented all the time when I was a UT Longhorn, by the way. So thank you, first and foremost!

But I’ve got to ask, while I have you here, do you have a favorite musician? Or a couple favorite concerts that you ever went to, over your years as a rock-and-roller and blues fan?

Spencer Wells: I mean, there’s so many. There’s so many amazing musicians. I was just thinking about this last night. And there was a show that we had at Antone’s, it was a closed-door show. It was only open to members of the nonprofit that we have, the Clifford Antone Foundation. Which also sponsored Buddy Guy coming down and playing at one point, which we were talking about earlier.

But Lucas Nelson and Gary Clark, Jr dueling guitar solos up on the Antone’s stage. That was where I was like, “Dude..” Because it was not easy. It was not easy at all. Getting that thing up and running again. There was hair loss. [Simon laughs.] There was blood, sweat and tears. There was a divorce. No, seriously, it was not trivial.

And that was where I was like, “yeah, it was worth it.” And then, a Robert Plant show that I saw at ACL Live in Austin. So the Austin City Limits’ Moody Theater, just one of the most astounding performances I’ve ever seen any singer give. His voice is still there. Those notes he hit when he was in Led Zeppelin. He can still do that.

Plus, he’s got this kind of country side now. Which is awesome. Like he’s exploring roots music and everything else.

I am constantly in awe of musicians and their talent. The Malcolm Gladwell “10,000 hours” thing is B.S., in my opinion. Anybody can spend ten thousand hours learning to become decent or mediocre at something. But there is another situation with God-given talent.  And you can’t learn to do that. And Robert Plant singing is one of those things. And Gary and Lucas playing guitar together is one of those things.

I’ve played guitar for three decades, nearly four decades now. I could never learn to do what they do on that instrument. So I mean, I have a huge amount of respect for musicians. And that’s a big part of the reason I wanted to preserve Antone’s.

[00:45:30] Simon Erickson: Well definitely check out Antone’s if you are in the Austin area. It is a gem. It is a gem of downtown Austin and I highly recommend it.

Spencer, last question for you. Our audience is mostly individual investors here at 7investing. Really interested in where the future of health care is going. Where genomics is going. What progress this field is making.

What are a couple of things that you would recommend that we take a look at to really figure out what’s going on out there? What are some sources or some things that you would recommend investors interested in this space be paying attention to?

Spencer Wells: That’s a really good question. Everybody’s got their eye on CRISPR these days.

It’s so funny. CRISPR, I think most people in the investing community don’t know where CRISPR came from. CRISPR is a bacterial immune response. It’s basically the immune system of a bacterium that was designed to fight off invasion by viruses. And so much of our genome was designed to fight off infections from viruses. And it’s really interesting evolutionarily.

But, CRISPR, this thing that was discovered in very basic biological studies in Jen Doudna’s lab at Berkeley. It has become this huge entity. And we mentioned earlier, the CRISPR babies in China with He Jianqui. You know, that’s a big thing in the future.

To me, this is where I have to step back from what I know and what I’ve spent my career doing. I’m fifty one now. And I got my start studying genetics back when it was still called “genetics” in 1985, when I started college. DNA sequencing had just been invented by Sanger and Gilbert. They won the Nobel Prize for it a few years before I started college. And it has progressed so rapidly, that I’ve said many times, I’ve been so lucky to be able to practice my craft during this time in history. It’s like getting in on the ground floor.

You look at the pace of change, the cost of DNA sequencing, genome sequencing. Like that famous NIH graph. It’s essentially going from a gazillion dollars to zero, in the space of like a decade. That’s never happened in human history. It’s the most rapidly-changing technology that’s ever been created. And much more so than Moore’s Law, you know, the evolution of the transistor and the microchip.

And so I’ve been incredibly lucky to be able to practice my craft during this time. But I have mostly used it to study existing variation. And to study mostly human existing genetic variation. To study how populations developed their historical patterns of genetic variance.

I have never been particularly predisposed to wanting to change things at the genetic level. Because that’s where I get a little bit antsy about the ethics and the potential ramifications on the biological side. Because I think it’s mostly engineers, people who come from particularly a Silicon Valley/software engineering background, who think “if we just go in and tweak this one little thing, we can correct all of these other problems.”

You know, it’s like fixing a Web site. Or it’s like correcting the code for an app. And that works in engineering because humans created the entire system.

We don’t know that that works yet at the biological level. I’m very wary of things like what He Jianqui did in China.

I’m not saying they should never be done. And maybe he’ll prove me wrong.

But I just feel like this is where I have to bow out at this point as a scientist. That’s not what I’m trained to do. It’s not what I want to do. It kind of scares me.

And at the same time, it is the future.

The future is re-engineering human biology. And figuring out how to do that is up to the next generation of scientists. And it’s going to be scary. There is stuff that is hidden in our genomes that we don’t completely understand.

We know, for instance, there are lots of dormant retroviruses that are buried in the human genome. What happens if you awaken one of those dormant retroviruses? I mean, I don’t know. Maybe I’m being alarmist. But for me, that’s not a forum I want to step into.

But to me, that is the future of biology, what’s being explored right now. And that’s where 20, 30, possibly 40-year old people, scientists, that’s what they should be focused on.

And that’s what investors should be focused on. Because the next trillion dollar company is not going to be an e-commerce company or a hardware company like Apple. It’s not going to be Amazon. It’s going to be a company that figures out how to harness the power of the human genome.

Like, truly harness it. And use it in an engineering sense. But it’s much harder than just building a “buy now” button. [Laughs]

Simon Erickson: Fair enough!

Spencer, I’ve heard you say in the past that the 20th century was “the Century of Physics” and the 21st century is going to be “the Century of Biology.”

Sounds fascinating and innovative. But lots of uncertainties, like you mentioned there too.

Well, lots to look forward to. Once again, thank you to Spencer Wells: the entrepreneur, geneticist, anthropologist, “smart science dude.” All of the titles above.

It’s been really a pleasure. Thank you for calling in from Indonesia to spend the time with 7investing this morning.

Spencer Wells: Good talking to you. Take care.

Simon Erickson: And thank you, everyone, for tuning in. We really appreciate your time.

We are here to empower you to invest in your future. We are 7investing!

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