Although pathway analysis methods have been developed and successfully applied to association studies of common variants, the statistical methods for pathway-based association analysis of rare variants have not been well developed. Many investigators observed highly inflated false-positive rates and low power in pathway-based tests of association of rare variants. The inflated false-positive rates and low true-positive rates of the current methods are mainly due to their lack of ability to account for gametic phase disequilibrium. To overcome these serious limitations, we develop a novel statistic that is based on the smoothed functional principal component analysis (SFPCA) for pathway association tests with next-generation sequencing data. The developed statistic has the ability to capture position-level variant information and account for gametic phase disequilibrium. By intensive simulations, we demonstrate that the SFPCA-based statistic for testing pathway association with either rare or common or both rare and common variants has the correct type 1 error rates. Also the power of the SFPCA-based statistic and 22 additional existing statistics are evaluated. We found that the SFPCA-based statistic has a much higher power than other existing statistics in all the scenarios considered. To further evaluate its performance, the SFPCA-based statistic is applied to pathway analysis of exome sequencing data in the early-onset myocardial infarction (EOMI) project. We identify three pathways significantly associated with EOMI after the Bonferroni correction. In addition, our preliminary results show that the SFPCA-based statistic has much smaller P-values to identify pathway association than other existing methods.
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