It's been a rough year or so for the personal genetics startup 23andme. Late in 2013, the Food and Drug Administration ordered the company to stop making health-related claims and stop offering test results related to customers' health--which had been a significant offering by the Mountain View, California-based company founded by Anne Wojcicki. Then came a class-action lawsuit alleged misleading advertising by the company.
But its future just got a little more certain. A new deal with major biotech company Genentech, announced today by 23andMe, has the potential to create a new mold for the company's future. It's not just a big financial boon for 23andMe, with $10 million up front, and up to $60 million total, according to a Forbes report, which was based on "sources close to the deal." It may also broaden the company's influence in terms of research, including shaping how humans understand our own genetics--especially when it comes to diseases such as Parkinson's and Crohn's.
The deal cracks open the "potential to make true breakthroughs in therapeutic research and treatment for Parkinson's disease," said 23andMe president Andy Page in the company's release.
While it's not the first handshake 23andMe has performed with a drug company--it collaborated with Pfizer last year to enroll customers with Crohn's disease in a database to look for common genetic markers--it is perhaps the most significant one to date. It's a deal to span years and one that will provide information to disease researchers around the world.
In particular, in the course of the partnership, 23andMe will ask members of its Parkinsons community permission for Genentech to do a more complete genetic analysis of their saliva samples, the majority of which 23andMe has stored. (While 23andMe's genotyping service identifies hundreds of thousands of different markers in a customer's DNA, a whole-genome sequencing would examine all 3 billion markers.)
"No one has done this scope of sequencing before," Emily Drabant Conley, director of business development at 23andMe, tells Inc. She says the scientific promise of the partnership is significant. "If you look at Parkinson's right now, there are no therapies that can cure, or even slow, the disease. I believe that using well characterized genetic data can lead us to new treatments."
Whether the company makes in-roads with federal regulators this year to re-open communications with customers about health-analysis, this deal shows the company is working to maximize what it has: A significant amount of genetic data from existing customers.
"I am hopeful for 2015," Wojcicki says. "It has been quite a transformation for the company, to really change and go through this entire process."
In an interview late last year with the Sunday Times, Wojcicki said when it comes to personal finance, she's still stingy despite having billions in the bank. (Her husband is Google co-founder Sergey Brin.) She dislikes when people order drinks at restaurants, because they have high margins. And once she drank so much carrot juice--it was offered free at an office canteen, and she decided to maximize the opportunity--that her skin tinted orange. There's a calculation behind any luxuries in which she indulges.
"I get parking tickets all the time," she said. "We've worked out the stats and it's 50/50 odds of getting a ticket, and the cost versus time saved means I can accept it."
It may seem brazenly libertarian to make a judgment call based on personal risk, while ignoring the black-and-white law. And indeed, 23andMe has had a bit of a similar scrappiness in its own DNA since its conception in 2006. But this new deal, for tens of millions, with a really large company, shows the startup is growing up--and using its somewhat defiant ways for a broader good.
And Wojcicki says 23andMe, which before this deal was already armed with more than $110 million in venture-capital funding, is in it for the long haul. According to Forbes:
When [Wojcicki] first started 23andMe, she says, someone at a Big Pharma company told her that if she really wanted to make a difference in the world, she would be ready to work for 10 years with the FDA to define what direct-to-consumer genetic testing would look like as a business. If not, if she wanted to sell the company quickly, she'd need a totally different strategy. "At 23andMe, we made that choice then," Wojcicki says. "We are very much in it for the long haul."
Now that the strategy is clear for the foreseeable future, 23andMe at least has bought itself a bit more time for its journey.