BioPharma

23andMe hears the call of therapeutics

Through its popular consumer portal, the Silicon Valley company has recruited thousands of study participants to identify genetic determinants of depression, heart disease, cancer, immunological disorders and skin diseases.

Genomics company 23andMe brought in $250 million in financing to power its consumer business, data research, and therapeutic efforts earlier this month. The company was already flying high on regulatory approval for tests to gauge the risk of Parkinson’s, late-onset Alzheimer’s, celiac disease and seven other conditions. But 23andMe is also leveraging its enormous data stores to conduct basic disease research. So far, the company has contributed to more than 80 papers.

“The scale of the data – millions of customers and growing – and the unique combination of genotypic and phenotypic information provides an unrivaled research platform for insights into human health,” said Sequoia partner Capital Roelof Botha in a news release.

Sequoia Capital led the round with contributions from new investors Euclidean Capital, Altimeter Capital and the Wallenberg Foundation and current investors Fidelity Management & Research Company and Casdin Capital. To date, 23andMe has raised $491 million.

Through its popular consumer portal, the Silicon Valley company has been recruiting thousands of study participants to identify genetic determinants of depression, heart disease, cancer, immunological disorders and skin diseases. These efforts could help 23andMe refine its genomic tests, making it more precise and bringing in more indications, a potential boon for consumers if the information is delivered with insight.

Still, 23andMe has larger ambitions on the clinical side. In 2015, they created a therapeutics group, led by former Genentech heavy hitter, Richard Scheller. It is partnering with Genentech, Lundbeck, Pfizer and others to leverage its data and identify targets to treat depression, Crohn’s disease, Parkinson’s and other conditions.

“The main thing is it (the financing) could enable them to fund more discovery work and development work,” said Dan Bradbury, managing member at life sciences consulting and investment firm BioBrit, LLC, in a phone interview. “That may actually lead to medications to address some of the targets they’ve identified as part of the massive database they have.”

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The business is tight-lipped about what form its therapeutic program will ultimately take. While the recent cash infusion could fund a lot of early discovery research, 23andMe would likely come up short to bring a drug to market.

“In drug development terms, $250 million is not a huge amount of money,” said Bradbury. “Many companies will spend well in excess of that getting their first product to market.”

The genomics business could float an IPO or continue to go after private money, a common tech industry approach. A more cash-friendly strategy may be to discover targets and license them to pharma and biotech companies, not unlike a university or nonprofit research institute. However, given Scheller’s track record, the business seems poised to develop its own medicines.

“It’s a very different business they’re moving into than what they started with,” said Bradbury. “They’re leveraging their datasets and that puts them in a pretty unique position.”