Five California gene testing firms are apparently defying state orders to halt operations pending the clarification of their compliance status with the laws of California. The California Department of Public Health sent the five companies letters which demand them to stop conducting tests involving biological specimens originating from California, pending the obtainment of their clinical laboratory licenses or registrations.

However, the five companies either continued operations claiming they already have all the necessary licenses or stopped taking in samples sent by Californians.

Google-backed startup 23andMe is among those targeted, as well as Navigenics of Redwood City, Gene Essence of San Jose, HairDX of Irvine and Salugen of San Diego. San Jose Mercury News conducted an investigation which revealed that at the phone number listed on Gene Essence's Web site answers somebody who knows nothing of the company or its alleged CEO, Robert Danielzadeh.

The first two are more prominent and allege they already obtained all licenses required. 23andMe is co-owned by the wife of Google Inc. co-founder Sergey Brin and received funding from the search leader. It offers a $999 DNA scan and said it will continue to do business as usual despite the letter from the State.

Navigenics, which collaborates with Santa Clara-based Affymetrix Inc. and has enlisted doctors to review the results, offers a more expensive $2,500 test which shows signs of increased risk for diseases such as cancer or diabetes. The company alleges that it doesn't actually test the samples, and is not subject to the clinical laboratory laws. Navigenics apparently analyzes DNA tests performed elsewhere at a licensed laboratory, apparently owned by Affymetrix.

Navigenics CEO Mari Baker told SF Chronicle that her company spent a significant amount of time and energy up in the one and a half years before the company's April 2008 launch to comply with the regulations and they already made sure they are fully compliant.