The R&D Tax Credit Aspects of the Internet of DNA



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Internet-of-DNA
        The Internet of DNA globally utilizes DNA data that is increasingly available for identifying and potentially treating diseases. Scientists have been trying to share DNA data for years, and companies today are beginning to make this a reality.

        Many scientists believe that determining how to diagnose a patient and developing new medicine for a cure will greatly enhance the Internet of DNA. However, there exists a large concern regarding privacy; people do not like the notion of sharing their DNA with the public, as it can identify an individual just as easily as a fingerprint. Despite this matter, the Internet of DNA gives researchers the opportunity to study genome data and make new drug discoveries, which is now eligible for research and development tax credits.


The Research & Development Tax Credit

        Enacted in 1981, the federal Research and Development (R&D) Tax Credit allows a credit of up to 13% of eligible spending for new and improved products and processes. Qualified research must meet the following four criteria:

•    New or improved products, processes, or software
•    Technological in nature
•    Elimination of Uncertainty
•    Process of Experimentation

        Eligible costs include employee wages, cost of supplies, cost of testing, contract research expenses, and costs associated with developing a patent.  On December 18, 2015, President Obama signed the bill making the R&D Tax Credit permanent. Beginning in 2016, the R&D credit can be used to offset Alternative Minimum tax and startup businesses can utilize the credit against payroll taxes.
  

What is the Internet of DNA

        Advancements in genetics are increasing due to the help of certain programs, such as 'the DNA Data to be Shared Worldwide in Medical Research Project and the Human Genome Project'.  One of the many important practices of genetics is DNA sequencing. This is a process which looks at the order of nucleotides in a string of DNA, consisting of adenine, guanine, cytosine, and thymine.iv Analyzing the DNA molecule sequence facilitates information about the patient to be decoded.

        Today, more than 200,000 people have experienced the process of getting their genomes sequenced. Researchers rely on artificial intelligence  systems to analyze data and detect certain structures in the information acquired. Especially for a scientist studying DNA, modern technology is required to identify the mutation in a patient’s DNA sequence.  The Internet of DNA will advance the future of medicine because it allows researchers to search for individuals with the same illness. Patients’ genetic sequences can be studied, which has the potential to assist in finding a treatment for specific diseases.  Yet, to advance the field of medicine, scientists need to review millions of genomes, if not more, to find a cure. Researchers have to carefully study mutations in genome sequences to see if there is a missing part of the DNA or additional DNA combinations.

        By using the Internet of DNA, genomes no longer need to be saved on hard drives and delivered by trucks from lab to lab. Researchers save time and money because there is no need for long-term travel. After all, information can now be accessed via the Internet. There have been recent developments in technology to read DNA strands. 


Improved Technology for DNA Analysis

        Pacific Biosciences created a machine called PacBio RS II, intended for de novo assembly, targeted sequencing, base modification detection, and isoform sequencing. De novo assembly consists of large scale DNA reading that simplifies genome assembly. Fewer readings are required, which leads to a lower cost and better accuracy of information.

        Targeted sequencing studies small scale forms of DNA by examining certain areas of the genome. Base modification detection looks at gene expression, host- pathogen interaction, and DNA damage and repair. This machine utilizes the Single Molecule Teal-Time (SMRT) DNA Sequencing System that provides users with DNA sequencing of up to 40,000 base pairs, high accuracy, and a broad range of DNA base modifications.

        A company based in Seattle, Washington called Stratos Genomics, Inc. created a unique machine that is faster and more affordable compared to other technologies. Stratos Genomics designed a form of technology that reads DNA sequences by looking at single molecules. Their machine, called Sequencing by Expansion technology (SBX), handles the process of nanopore sequencing of expandable nucleotides. This utilizes a single molecule detection process.  The SBX consists of an Xpandomer, allowing for the detection of specific base sequences. The company was recently awarded $15 million from Roche Ventures and Fisk Ventures. This money will assist in the next stages of development for SBX.


Internet of DNA Technology

        Open Humans Network looks to make an expansion of health data available for researchers to explore. The Personal Genome Project uses this website to obtain full DNA sequences. Open Humans is a network where people sign up to participate in one or more studies.  Before volunteers partake in the study, they agree that the experimental results will be shared amongst other researchers. So far, out of 4,100 volunteers, genomes were collected from 500.

        MatchMaker Exchange is a system that trades genetic data with hospitals. The system compares genomic data from patients worldwide. This process gives researchers the chance to develop more evidence by matching genes and comparing DNA from individuals in different countries. Hospitals from Miami, Baltimore, and Cambridge, UK have agreed to participate in using MatchMaker Exchange.vii The program specifically links databases with genomic and phenotypic information. These databases allow researchers to analyze genes and help prove that certain genes are responsible for particular illnesses. 

        MatchMaker Exchange has advanced enough that the Tiers and API team are now working on connecting two databases - PhenomeCentral and GeneMatcher.  PhenomeCentral contains clinical and genetic data from patients with undiagnosed rare diseases. GeneMatcher’s database holds genes that are connected to inherited disorders. it is also linked to another database known as PhenoDB, which carries phenotype information.

        MatchMaker Exchange is seeking to develop different algorithms to improve the system and make it easier to search. The company wants to create algorithms that rank how closely a phenotype matches with one another and how similar genes are. Once these algorithms are developed, the MatchMaker Exchange process will become more efficient in assisting researchers to further understand data results.

        23andMe Inc. collects DNA samples and has recently partnered with Pfizer Inc., one of the largest pharmaceutical companies in the world. 23andMe sells $99 tests to consumers who want to find out more about their genetic histories. After working with Pfizer, the companies decided to let researchers have access to DNA samples. The samples were provided by buyers from 23andMe Inc., who agreed to let their information be used in experiments. 

        23andMe is looking to make similar deals with 10 other drug makers and biotechnology companies. Meanwhile, Pfizer is seeking to enroll 5,000 patients to research the genetics associated with lupus. What makes 23andMe appealing to so many companies is that it collects additional information about a person’s life with the consent of the individual. Now, scientists can also analyze individual characteristics and how they are associated with that person's health.
   
        Global Alliance for Genomics and Health consists of computer programmers and geneticists who work to build innovative projects. Their end goal is to accelerate the creation of possible genomic medicine. One project involved a search engine that sifts through DNA sequences from thousands of human genomes.

        Global Alliance was created because scientists were anxious about the privacy restrictions in transferring DNA. Researchers wanted the ability to share genomes in order to advance their own work in the health field. They wanted to create this alliance because at that time, the cost of examining genomes decreased by almost $8,000. This created more opportunities to study DNA.vii


Technology for DNA Privacy
        Global Alliance produced a tool called Beacon that allows owners to choose what information from their records is open for search by the public. This method of searching genomes allows scientists to find information and still keep individual's privacy intact.vii

        Twenty databases are currently used with Beacon, which provides access to an abundance of genomes. The system only generates results to yes or no questions, but the questions can range from being broad to being very detailed. One of the biggest issues with examining DNA is that patients worry about their privacy, but Beacon has found an alternative way to resolve this concern.


Cloud-Based Technology

        Many companies are now developing cloud-based software to support the Internet of DNA. Just some of these efforts are discussed below.

Google
        Google created Google Genomics, which is a cloud computing software that gives users access to an individual’s genetic profiles. From the cloud, genome data can be shared, and virtual experiments can be done easily. This is primarily possible because of the simple access to a large repository of data.

        The National Cancer Institute stated they would pay $19 million to store copies of 2.6 petabytes of DNA data in Google’s cloud.  Google Genomics will assist in efforts to discover how DNA impacts certain illnesses. Scientists are optimistic that such endeavors will prove beneficial in illness detection.

Apple
        Apple is looking to use an application called ResearchKit to collect information about symptoms, DNA samples, and other topics. Scientists would have access to this vast amount of information through a computing cloud. Apple’s goal is for people to have the opportunity to choose whether or not to share their DNA information with other individuals, including scientists.  The experiments would look at 100 or fewer genes per person, which would not cost more than a few hundred dollars per test. If Apple’s goal is accomplished, then studying DNA will also be easier for scientists because of the mass amount of information made available via the cloud.

DNAnexus and Tute Genomics
        These companies partnered with each other to create a method for scientists to look at a DNA sequence and analyze it in one process.  DNAnexus uses a cloud-based system which manages collected genomic data. Tute Genomics focuses on the analysis of genomes and creates files of a genomic profile for scientists. Both companies work well to create an environment that stores information and analyzes it in one simple procedure. Users save time and money from using this integrated platform instead of multiple machines.


The Application of DNA to Diseases

        Brain mapping is a way to learn about how the brain functions and how certain diseases are linked to it.  There is also a strong correlation to mutations in DNA strands and certain diseases. Studying DNA and how the brain works can help close the gap in research to discover a cure for illnesses such as Alzheimer's and autism. 

        Alzheimer’s disease usually occurs in older people. It has a significant impact on a person’s life, especially in the loss of memory and eventually thinking, language, and behavioral skills.  Studies indicate that people with Alzheimer's have millions of extra pairs of DNA in their brains.  Scientists have yet to figure out the cause of extra pairs of DNA in people with Alzheimer’s and why it causes the disease to develop in the first place. This is an effort that can be advanced with the Internet of DNA.

        Autism impacts a child’s brain for the rest of his life, which is why early detection is crucial. It is best to attempt reducing symptoms associated with the disease early on.  Stanley Nelson is a geneticist from the University of California-Los Angeles who believes that analyzing genetic samples of individuals with autism will contribute to finding out how the illness develops in the first place.  As of now, researchers use a database called Autism Genetic Resource Exchange to analyze DNA samples. The database contains and utilizes samples from approximately 10,000 participants.


Conclusion

        In the future, individuals will need to share their DNA data with scientists in order to further the medicinal field. Without large scale studying of genomes, it is more challenging for researchers to discern the causes of varying diseases.

        If companies can find a way to protect individuals' private information while sharing genomes, then using the Internet of DNA can provide limitless, valuable findings. Development of new technology to share DNA data can create many more possibilities for scientists and researchers. R&D tax credits are available to companies that create new technology and are involved with innovation of modern processes in the health field.

Article Citation List

   


Authors

Charles R Goulding Attorney/CPA, is the President of R&D Tax Savers.

Lauren Chin is a Tax Analyst at R&D Tax Savers.


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