Genetic testmaker 23andMe is making a smart pivot from its direct-to-consumer business: It going to start developing its own drugs.
“This is a slight shift as opposed to a major change – we’re going to continue to be a direct-to-consumer company,” said Andy Page, president of 23andMe. “We’re considering the therapeutics arm as another customer of our team.”
But this isn’t a slight shift at all. With a genomic database that’s 890,000 strong, 23andMe wields a powerful source of data for drug developers – and has nearly 20 partnerships with companies like Genentech to provide them genomic and phenotypic data. So the rationale for 23andMe’s new division: Why not use that information internally? 23andMe has unbridled access to the self-reported data it’s already collected by paying customers. And it can keep going back for more. Forbes writes:
When Investment Rhymes with Canada
Canada has a proud history of achievement in the areas of science and technology, and the field of biomanufacturing and life sciences is no exception.
The move is a big one for 23andMe, because it will allow it to capture a much greater proportion of the economic value its genetic databases could create. Consider this: doubling the 800,000 genetic test kits it has sold to date would bring in $79 million. Sources have told me that a recent collaboration with Genentech, which is now a unit of Roche, on Parkinson’s research could generate $60 million in total. But a medicine in clinical trials can easily be worth hundreds of millions of dollars, and a marketed drug can be worth billions.
23andMe has trawled for hundreds of phenotypic data points – and the power to continue reaching out to the test buyers for further self-reported phenotypic data is particularly lucrative. It’s got nearly 20 customers under its belt that are mining its database for clues on potential new therapeutics. About 88 percent of customers consented to having their data used for research.
“Increasingly, it’s the contactability of the database… that has been of significant interest to our partners,” Page said. “It’ll be significant of interest to Richard Scheller as well.”
The fact that Apple just announced its ResearchKit lends legitimacy to the fact that self-reported consumer health data is important to scientists – and could be wildly profitable.
The announcement of the new therapeutics division came coupled with the hire of Richard Scheller, a storied Genentech alum who served 14 years as a VP of research and early development.
“I have dedicated my life to research aimed at fulfilling unmet needs for very sick people,” Scheller said in a statement. “I believe that human genetics has a very important role to play in finding new treatments for disease. I am excited about the potential for what may be possible through 23andMe’s database. It is unlike any other.”
So Scheller will mine the 23andMe database over the next 6 to 9 months, and start proposing new therapeutic targets, Page said.
“We know our data more than anybody, so we believe there’s an opportunity to accelerate the drug discovery process to make it more efficient, less expensive, and we hope wildly successful as a result of pulling together a team that’s focused from day one on this data,” Page said.
