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A California-startup focused on genetically editing human embryos — a step toward creating so-called designer babies — is raising money as many of Silicon Valley’s ultra-rich turn their attention to one of the most controversial technologies in medicine.

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A newly available kind of genetic testing, called polygenic embryo screening, promises to screen for conditions that can include cancer, obesity, autism, bipolar disorder, even celiac disease. These conditions are informed by many genetic variants and environmental factors - so...

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