How Professor Sir Peter Donnelly went from brilliant statistician to entrepreneur

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0:41We look forward to seeing you there. It's a particularly daunting experience to be speaking in front of this audience. But unlike the other speakers, I'm not going to tell you about the mysteries of the universe or the wonders of evolution or the really clever, innovative ways people are attacking the major inequalities in our world or even the challenges of nation states. in the modern global economy. My brief, as you've just heard, is to tell you about statistics. And to be more precise, to tell you some exciting things about statistics. And that's rather more challenging than all the speakers before me and all the ones coming after me.

1:18Someone, one of my senior colleagues, told me when I was a youngster in this profession, rather proudly, that statisticians were people who liked figures but didn't have the personality skills to become accountants. And there's another in-joke amongst statisticians, and that's how do you tell the introverted statistician from the extroverted statistician? To which the answer is, the extroverted statistician's the one who looks at the other person's shoes. A statistician, a professor, a knight of the realm, and an entrepreneur. I've not spoken to anyone quite like Professor Sir Peter Donnelly before.

1:57The clip you heard at the start of this episode was Donnelly giving a TED talk about statistics and how they can be misused and misread, including by juries in criminal trials. Donnelly grew up in Australia but moved to the UK, where he became the youngest professor in the country at the age of just 29 in the late 1980s. He then went on to become head of statistics at the University of Oxford and led global research into genetics. But then his stellar academic career took an unusual turn. He went into business and started building his own company.

2:41I'm Graeme Ruddick and this is the Business Leader Podcast. In this episode we look at the story behind how Professor Sir Peter Donnelly swaps the academic world for business to build genomics and we look at how this brilliant mathematician has found being a chief executive and co-founder. Genomics is one of the fastest growing businesses in the UK. It's raised more than 100 million pounds in funding and is working on technology that could change and save lives. We'll come on to what genomics is doing shortly but firstly let's hear more about Donnelly's work in statistics and what he said in that TED talk.

3:24Early in my academic career, I was involved in some of the early court cases with DNA profiling, and then one of the cases that involved cop deaths in the UK. In each case, it's an expert witness. And I came to realise through doing that and reading transcripts about what had happened, these were usually appeal cases, what had happened in the original court cases, that it was very easy for the people involved in the court cases, the lawyers, Because often the forensic scientists who are presenting the statistical evidence, you know, there's a DNA match. This is the early days of DNA profiling.

3:57And what does that match mean? And how can we interpret it? There's a simple logical error that people can make there, which is very unhelpful for a defendant when you're presenting it. You end up presenting the evidence in a way which is factually wrong and unhelpful. But it's an easy mistake to make. and so I started thinking about and trying to work with colleagues on the legal side to first of all educate people about the right way to present statistics and think about statistics and the Court of Appeal in the UK made a number of judgments that were helpful as well. So part of the focus on my TED talk was some of those very simple examples where our intuition can get it exactly wrong and there's something subtle happening and we don't quite understand it.

4:47Or similarly examples where, you know, when we're reasoning with uncertainty, which people in general aren't good at doing, but when we're reasoning with uncertainty, there are some natural traps we fall into. So the TED Talk was trying to explain some of those. What would be those traps? So one of them, for example, would be if we have a test for a disease and I tell you the test is 99 % accurate, and then I say I've tested this person, Bill, and the test comes back with a positive result, what's the chance that he has the disease? Most people would say 99 % because the test is 99 % accurate.

5:24Actually, it's really important there to consider how common or rare the disease is. And it turns out if the disease is really rare to start with, then when we know that Bill's got a positive test, there are two possible ways that could have happened. either he has the disease, now that's really unlikely if the disease is very rare, and the test gets it right, or he doesn't have the disease, which is overwhelmingly likely, and the test happened to get it wrong. And if the test is rare enough, even though he's had a positive test, the second of those explanations, which is he doesn't actually have the disease, but the test made one of, you know, it'll make an error one in a hundred times, that turns out to be relatively much more likely.

6:02So even with a positive test on a test which is accurate, it can be much less likely that you have the disease than that you don't and it's that it's called the base rate fallacy we don't in our thinking bear in mind how common or rare the disease is and i was fascinated to know like looking back on your academic career now that you're in business do you look back on academia and think what an incredible place or do you look back on the academic world and think it could be achieving so much more but actually it's got a lot of failings or do you look back on it as something that's still a wonderful thing i i absolutely love my time as an academic and actually thought I would stay an academic all my career.

6:41I certainly wasn't planning on becoming an entrepreneur late in life. The ability to focus on, really deeply focus on research questions in my case, in my work in genetics, which is the last 10 or 15, 20 years of my career, research questions that could have very substantial impact was such a privilege. and to be, I mean, funding is competitive, but to be able to successfully get the funding, to be able to pursue those things, to be kind of leading the world in thinking about new sorts of experiments, new ways of learning, new algorithms, new knowledge was just amazing. I felt at the time incredibly lucky and looking back, I probably see that even more strongly.

7:24And I think that's the real strength of the academic world. It's about people who are very focused on the research side, on pursuing research in the sciences increasingly. It depends on being able to attract research funding. So that's quite competitive and getting more competitive and more difficult now. But it's great. And many, but not all people in those roles also do teaching of undergraduates. And again, an incredibly important thing for our society that young people who want to have the chance to go to university, to learn something in some level of detail. So I think there are lots and lots of positive things about the academic world.

8:02It has a different set of drivers from the commercial world. Many academics are just as focused, just as driven, if not more so than people in the commercial world. They're not incentivized by money, but they're incentivized by a team in the research, by being the first to discover things in competitive areas. So there are differences, but I felt incredibly lucky. Now let's turn to the story behind genomics. and what it does. The business was founded in 2014. It's not often that I can really say this, but this is a business that could change and save lives. So at Genomics, we now employ about 150 people.

8:46We've got offices in the UK, in Oxford and Cambridge and London. And in the US, we have a lab in Massachusetts and an office in North Carolina. What we're about is using large amounts of genetic data, and we've assembled a unique data resource inside the company, very sophisticated proprietary algorithms to gain insights that we use in two different ways. One of that is through helping drug companies find new drug targets or where they have a potential drug target to help them identify the right patients who will benefit most from that drug. And then the parallel part of the business is about using that genetic information to allow us to develop the algorithms that can measure the genetic component of risk within an individual for all of the common diseases, for heart disease, for diabetes, breast and prostate cancer, the conditions which cause most of the sickness in our populations and use up most of our healthcare resources, 70 or 80 % of NHS budgets.

9:44So it's that focus on sophisticated algorithms to make a difference, first of all, in understanding risk and if possible, preventing disease or getting people into screening programs at the right time. and then for diseases with unmet needs, helping companies find new drug targets for those diseases and then identify the right patients to most benefit. And what you've got and what you've done is the algorithms. Yes, two pieces. We've assembled the data resource and we've put 10 years into building that data resource and then the sophisticated algorithms that sit on top of that to extract information from the data resource that we have.

10:21And that data resource is academic studies from many years collected into one place. Is that right? Yes. You can think of it as tens of thousands of different individual studies, which each link genetic variations, so different DNA variants that we might happen to carry, with things we can measure in people, whether that's disease outcomes, what we call quantitative traits, so lung function or blood pressure, all the way down to biomarkers and things we can measure inside cells. and over the 10 or 11 year history of the company, we've built the software that enables us to ingest many, many, many of those data sets and to do the really important but not very exciting quality control work on it and then the integration and alignment of those data sets so we can then deploy powerful algorithms on them.

11:12For people who, for them, want to understand the practical application of the tests, what sort of things would you be able to tell someone who took the test? So until a couple of years ago, if I had the entire DNA sequence on a 40-year-old who was healthy, I'd only learn something useful in about 1 % of cases. And that's because genetics has played into medicine through dealing with rare diseases, diseases which are caused by a single change in our DNA, which has a big impact. Think of diseases like cystic fibrosis or Huntington's disease or muscular dystrophy. Now, those conditions are individually rare.

11:47Thankfully, they're collectively relatively rare. and actually most of them impact individuals when they're young. So if someone's got to age 40 without any obvious symptoms, there's probably nothing left to find of that kind in their DNA, one of those big changes that has substantial impact by itself. Now it's the case that if I have information across someone's DNA, across their genome, I learn something medically actionable in about 70 % of cases, 7-0. And that's because we've gone from genetics only focusing on those rare serious conditions, often in childhood, to being able to understand the genetic component of risk for all of the common diseases, heart disease and diabetes, breast and prostate cancer.

12:25So when individuals are still healthy, we can identify for each of us, what are the one or two or maybe three diseases that we're going to be most at risk of? What are the things we can do as individuals to mitigate that risk? And what are the things healthcare systems can do? Healthcare systems, the NHS is a great example. They have programs for people who are at high risk for heart disease or who are at high risk for breast cancer, prostate cancer. They have screening programs. This is about allowing the health system to deploy those screening resources and prevention resources more effectively by getting the right people into them at the right time.

13:01Listen to you speak there. I've got so much to learn in this field, but it strikes me that we're sort of at a paradigm shift in terms of medicine and science. This understanding that actually certain people are more at risk and predisposed to some things than others. Obesity, one example, I guess. Is that right? Is that a correct understanding? That's absolutely right. So we've actually known for many years that genetics is important in all of those common diseases. It's only very recently we've learned how genetics plays into them, and we've been able to measure for each individual what their risk is.

13:34And it turns out to be really powerful. Some men are 40 times more likely to get prostate cancer than others because of their genetics. Some people are 30 times more likely than others to get diabetes, 60 times more likely than others to get Alzheimer's disease. And another good example is obesity, where genetics is a major, major part of the story. We've got data where we've looked at genetics in eight-month-old babies, where you can already see the impact of genetics on their weight. By three and a half years is more marked. By eight years, there's a really strong correlation. So throughout people's lives, genetics is a big part of the story of whether they're likely to develop obesity.

14:12People who are at healthy weight in mid to late 20s, early 30s, they're 10 times more likely to develop obesity in middle age if they've got unhelpful genetics than if they've got helpful genetics. So it's just another example where we know genetics is a key part of the story. We can now measure it, and we can use that in different ways in the case of obesity to work out which individuals are going to need a lot more support than others and for some of the common diseases to get people into prevention programs or screening programs, often years before symptoms will develop, which is exactly when you want to be doing it.

14:47So if you take something like obesity, would you be able to sort of say to people, okay, you need to frankly do more steps than some individuals because you're more at risk, or if you take the new drugs, something like a Zempick should be a really interesting thing for you to look at. Is that right? Yes, others have done a study where they've addressed exactly the point you raised of looking at how many steps you need to walk each day, as it were, to offset your genetic predisposition. So people with a stronger genetic predisposition for high BMI or towards obesity, if you're in the 95th percentile, so if you're at the top end of that distribution, you have to walk 13 ,500 steps a day as it were, to offset that and to keep your BMI stable.

15:31On the other hand, for people with helpful genetics at the 20th percentile, so it's good, but a fifth of people have even more helpful genetics, Those people only have to walk three and a half thousand steps a day. So there's 10 ,000 steps a day different that someone has to walk to maintain a stable weight just based on their genetics. And so we can now identify that and we can start to give individuals personalized advice about what they might need to do. But I think also in terms of doctors and our public health efforts, it's about recognizing that some people just find it much, much harder than others to lose weight.

16:04the kind of simple dialogue that, oh, it's all about willpower and people just need to buck up and stop eating as much. That's not how it works. People, what we now know is that a lot of the way genetics and our biology plays into obesity is what goes on in the brain. It's about the way the brain does or doesn't process signals that say you're full or you feel like you need more food. So it's about recognizing some people need more help, helping them with personalized plans, and they will find it harder to lose weight by other means. So medical interventions, surgery is one possibility, but the latest round of obesity drugs are another possibility to help those people.

16:42How impactful would it be for everyone to be able to go and get their genetics tested today? I've read things that you've said that if every 40-year-old was doing it in 20, 30 years' time, you could end up with a million more people being alive. I think it's the right time because there's a growing awareness and people are trying to act to get health systems much more focused on avoiding disease rather than treating it. So in the UK, for example, West Street and the Secretary of State for Health has as a key pillar of movement from sickness to prevention. So it's the right time in terms of those global trends, and it can make a real difference.

17:18There's been work which has shown that if we could reduce the incidence of six of the most common diseases by 20%, GDP would be 0.75 % larger in five years' time. So it's not just the healthcare costs. People are starting to realise and quantify the impact on the economy. And as you said, these things are used globally, at least in the global north. There will be millions of people alive in 20 or 30 years' time who wouldn't be otherwise, because we've got much better at targeting those prevention programmes, getting them started early so that people can either avoid disease altogether or catch it in its initial stages when outcomes are much more successful.

17:57How far away are we from everyone being able to get tested? I guess that's one of the key things now for you as a business is getting this into the NHS. And I know you've done Bupa and then there's everything that you're doing outside the UK. So could you just give us an update on that in terms of where we are in making this a reality for everyone to be able to get? I think it's ready for prime time now. For example, we have a registered product in the UK which provides this test for four different diseases. That test is being offered by Bupa to people as part of its health assessments. We're in conversations with a number of other potential customers in the UK so there'll be others rolling that out fairly soon.

18:35So it can be done and in the US we have a similar product which is also regulated there which is being widely offered as well. So it's ready for prime time. We have the methodology. it's just a matter of of thinking about how best to deploy it and I think if people really want to focus on prevention putting some resources as it were where the aspirations are in order to enable us to do this it's not super expensive the test in the UK cost is at scale will be comparable to the battery of blood tests that a doctor orders but you only have to have it once in your life the genetic test and like blood tests which which happen repeated.

19:13Like any business genomics has face challenges scaling up. This has posed a unique task, even for Professor Sir Peter Donnelly, who admits he had a lot to learn about business when he started with genomics in 2014.

19:30I think a big challenge for us has been working out what the right business and commercial model is. You know, we had huge potential and have huge potential through the technology and algorithms we have. It's a question of what's a business model to monetize that in the right way. Now, after, not unusually, I think for startup companies, after exploring a number of different things, I think we've settled on the model. We've now got substantial traction on both sides of the business, on the work we do with pharma and other life sciences companies and the work we do in risk prediction for health systems, but also for other organizations, other large organizations.

20:12I think we've got the model sorted now. So we're at the stage as a company where what's important for us is to grow that customer base and grow the revenue that we've started getting. What are the next steps? What are the next priorities for you? I think for the next few years, it's all about growing the customer base, solidifying ourselves as the leading company in the space, both in terms of the best technology, but also the most traction commercially and using that growing customer base as we evolve the products and the tools, using that to grow the revenue. In terms of future fundraisings, what do you see your requirements being?

20:48How well are you set up for now? And in the future, is an IPO afloat, something that's on your agenda? We were lucky enough to raise a substantial sum of money in our Series C now just over 12 months ago. It's up to us to use that wisely. That'll get us to break even. So we don't have any immediate need to raise extra capital. Although that could be helpful if we want to, for example, expand the geographies we're working in, or in some cases, try and move things more quickly. Looking forward a few years, we'll be a company with pretty substantial revenue, a good EBITDA position, good margins. We're just starting to think about options at that point.

21:26The range of possible options are pretty clear. There would be continuing independently, potentially via an IPO. there would be a strategic partnership or some kind of exit to a financial institution. We're not at the stage yet of committing to one or other of those. I think the right thing for us as a company is to keep growing the customer base, growing the revenue position, working on our margins. If we succeed in that, then lots of things will be possible. In terms of strategic partners, are you open-minded on that? Or do you feel strongly that the business to deliver needs to stay independent?

22:01I think we're pretty open-minded. You know, having built the business now for 11 years, I'm really proud of what the team have achieved and where we got to. I'm absolutely convinced this stuff will be routine in healthcare in 10 years' time, maybe a bit earlier. I'd love it to be us that's driving that change and we're best placed at the moment. We've got the best technology. We've got the most traction. So it's a fantastic position to be in and I'd love us to keep going, making a difference. but it might well be that we can make more of a difference if we partner in a way that'll give us a much broader range of areas we can work in, customers and resources and so on.

22:40Would that be any partner? It would be about marketing and distribution. Would that be what you'd be looking for? It could be marketing and distribution. It could be providing complementary expertise. So I think it's interesting in our space, there are a number of different areas so the tech companies are all looking to get more into healthcare we do a lot of work in the pharma space and so there's potential for partnerships with pharma companies potential for partnerships with companies that partner with pharma companies whether that's cro's or lab organizations so i think there are lots of possibilities with where a partnership could enhance some aspects of the business you're obviously based in oxford and cambridge but then also have this international perspective as well so i was really keen to ask you oxford and cambridge How vibrant are those two places as economic and intellectual hubs?

23:30I think Oxford and Cambridge and London, there's a lot of activity. I mean, ecosystem is a slightly jargony word, but the startup ecosystem in both of those is, I think, really healthy. There's support. In Oxford's case, there's an organization called Oxford Science Enterprises, which is an effective venture fund to fund Oxford spinouts. And for transparency, they are an investor in Oxford. in our company Genomics, but I'm also on the OSCE board. Companies like that, and Cambridge have CIC, other universities are building similar funds. They can make a massive difference, not just with the money, but actually with providing founders with the knowledge and the skills and the support to know how to grow a business because most of us don't really know where to start.

24:16So I think those startup ecosystems in Oxford and Cambridge, in London, and some of the other major UK universities are already strong and growing in strength and will keep growing, which is a fantastic thing for the UK. Just to your point there, Rob, providing founders with sort of information, like looking back to when you started, how much have you learnt now compared to when you started off? Tons and tons and tons. If I were doing this again, and I was really late in my career to be an entrepreneur, so I suspect I won't. There are so many things I would know having, as it were, played the game once, see how various things have played out.

24:52I'd love to think I could help other founders with that, but many, many, many things to learn. What sort of things would you pick out? I think I'd say that founding a company is definitely a full-on thing. So founders will want to go into it with their eyes open. I think as you're sort of surrounded by the myriad channels and challenges of so many different types, it's really helpful to have a clear vision of what you want to achieve. I'm very excited about our vision, which is about helping people live longer, healthier lives. But having that clarity of vision is helpful. I think a big learning for me and a mistake in retrospect, a mistake we made was not building the commercial side of the business earlier than we did.

25:35We've rectified that now. As I said, we've got customers. We've now got a quite substantial commercial team growing that customer base. We should have started doing that a few years before. week who did you turn to uh for advice and who how did you try and learn as you were building the business i love learning so i'm i ask lots of questions of lots of people our investors and other investors often a good source of advice because they've kind of seen the movie lots of times talking to other founders i find really helpful and other ceos because they're coping with they've got their own kind of complexion on it but they're coping with fundamentally similar problems to the ones you're coping with so you know networking events with other ceos i find helpful particularly those who have done it a bunch of times before you know talking to others in the business and commercial world as i said it's not an area that i grew up in so i also found that really helpful i love learning things i love talking to people and you gain something from all of those conversations when you get the chance to speak to all the founders now maybe just starting off what's the advice that you're giving to them now i think um a couple of things firstly back yourself and trust your instinct but at the same time realize that it's a team game and it's so important to build the right team around you and the nature of that team changes as the company grows the kind of people you need you know when you're a company of 10 or 15 or 20 people where you need a whole bunch of generalists very different from what you need as a company of 120 or 130 people where you need specialists in finance in hr and marketing and so on so getting a strong team but also being aware that the needs you will have of a team and probably the needs the company has of you as a CEO will change every time.

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