With Tuesday's announcement of the knock-down $100 million (€85 million) sale of genome research company Genuity Science and its Irish operation, there's little to satisfy either the Irish Government or the Irish people.
Following the company’s acquisition by New York-based HiberCell, many hard questions must be asked of the politicians and civil servants who so willingly put tens of millions worth of government funding into a private company, especially one with the controversial business model of profiting from Irish citizens’ DNA.
The State, presumably, has taken a significant loss on its taxpayer-funded investment into a company that has twice received State investment through the Irish Strategic Investment Fund (ISIF). Initially, ISIF placed €5 million into Irish company Genomics Medicines Ireland (GMI), then topped this up with an additional €61 million when GMI was bought by WuXi, a large Chinese biopharma conglomerate, and merged into WuXi NextCODE in November 2018 – a $400 million venture between a number of investors, including ISIF.
Nothing close to 600 jobs were ever likely to come out of the investment
This move startled numerous Irish researchers and experienced venture investors. Some questioned why the State did not exit this initial investment with a (presumed) profit on behalf of Irish taxpayers, especially as GMI accounts indicate it wasn’t growing as might have been anticipated.
The original 2016 investment included the expectation of 150 Irish jobs. The $400 million investment in 2018 made headlines with the anticipation of 600 jobs over five years – and the company’s stated intent of acquiring the genomic data of 400,000 Irish people, nearly a tenth of the population.
Nothing close to 600 jobs were ever likely to come out of the investment. By 2020, company numbers rose to well above 100, but the company would have needed explosive growth to hit 600 in five years.
Especially so, as genomics research is complex and uncertain. In the past decade, genetic and genomic research has been at the centre of dramatic claims for treatments. But experienced researchers have warned of daunting challenges, and the long and expensive road to useful results. Nonetheless, then-taoiseach Leo Varadkar was happy in 2018 to tout the project as one which would “ultimately deliver better health and wellness management to people and patients in Ireland” and the world.
Questions must be answered as to why the State was making such a large commercial investment into one of venture capital's highest-risk sectors
Meanwhile, ISIF promoted the investment as exemplifying “ISIF’s ability to act as a catalyst for major investment in high-value economic activity in Ireland” and meet ISIF’s goals of creating jobs and a commercial return on investment.
Well, no. Not even three years later, the GMI/Genuity venture is valued at just a fourth of that 2018 $400 million investment – and not much above the total amount of €66 million ISIF put into its successive investments into GMI/Genuity.
Questions must be answered as to why the State was making such a large commercial investment into one of venture capital’s highest-risk sectors, one in which commercial venture firms rely on expert advisers, and wager the money of high net worth investors and large institutions, not the State’s receipts from taxpayers. These issues existed before any additional economic turbulence from a global pandemic.
In addition, commercial venture firms generally build in financial protections on deals so that they can extract their investment if a company exits at a “down valuation” lower than the original valuation. The Public Accounts Committee may wish to find out if such a safeguard was in place to protect taxpayer money – and if not, why not?
Unlike most countries, Ireland also lacks a national, public genomics project, in effect, privatising it
However, the most problematical element of this investment has always been the very premise of the company. This is a private firm, commercially exploiting the (very valuable) DNA of Irish citizens, selling access to its Irish databases to other third parties, while only doing some research itself.
Worse, the State made this investment into a DNA-exploiting commercial firm even though Ireland didn’t – and still doesn’t – have any coherent, dedicated national policy around the use of its citizens’ genomic data, despite DNA information warranting the highest safeguards under the EU’s General Data Protection Regulation. Unlike most countries, Ireland also lacks a national, public genomics project, in effect, privatising it. The State’s investment also failed to require – as would have been reasonable as a significant stakeholder, and one representing the citizens whose data is being monetised – that data be shared to the EU’s, or any other, public genomics database.
Many more questions arise. Did ISIF never anticipate that Genuity might be sold, and Irish genomes passed on to a company in which ISIF would have no representation? Does the GDPR even allow for such a private sale of genomics data? Was explicit consent obtained from DNA donors to allow for such a sale of their data – given that the genomics data on its own must be a significant enticement in this sale? Will Irish people have any say in what now happens with their DNA?
And the biggest question of all: why didn’t the State instead take those tens of millions of euro, create a national public genomics research centre, and step into the 21st century by investing in and directly benefiting the Irish people, rather than a private multinational?
