BackgroundGenetic variants can contribute differently to trait heritability by their functional categories, and recent studies have shown that incorporating functional annotation can improve the predictive performance of polygenic risk scores (PRSs). In addition, when only a small proportion of variants are causal variants, PRS methods that employ a Bayesian framework with shrinkage can account for such sparsity. It is possible that the annotation group level effect is also sparse. However, the number of PRS methods that incorporate both annotation information and shrinkage on effect sizes is limited. We propose a PRS method, PRSbils, which utilizes the functional annotation information with a bilevel continuous shrinkage prior to accommodate the varying genetic architectures both on the variant-specific level and on the functional annotation level.ResultsWe conducted simulation studies and investigated the predictive performance in settings with different genetic architectures. Results indicated that when there was a relatively large variability of group-wise heritability contribution, the gain in prediction performance from the proposed method was on average 8.0% higher AUC compared to the benchmark method PRS-CS. The proposed method also yielded higher predictive performance compared to PRS-CS in settings with different overlapping patterns of annotation groups and obtained on average 6.4% higher AUC. We applied PRSbils to binary and quantitative traits in three real world data sources (the UK Biobank, the Michigan Genomics Initiative (MGI), and the Korean Genome and Epidemiology Study (KoGES)), and two sources of annotations: ANNOVAR, and pathway information from the Kyoto Encyclopedia of Genes and Genomes (KEGG), and demonstrated that the proposed method holds the potential for improving predictive performance by incorporating functional annotations.ConclusionsBy utilizing a bilevel shrinkage framework, PRSbils enables the incorporation of both overlapping and non-overlapping annotations into PRS construction to improve the performance of genetic risk prediction. The software is available at https://github.com/styvon/PRSbils.