January 6, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
Controversial DNA sequencing test company 23andMe got a significant nod from Big Pharma Tuesday, after the Google Venture-backed startup said it will receive an upfront payment from Genentech of $10 million, with further milestones of as much as $50 million.
23andMe has to date collected data from 800,000 customers who have used its $99 kits to submit their genetic information to a central research bank, a repository that has had consumer privacy advocates crying foul and large biotech firms salivating since its founding in 2006.
Despite no foreseeable resolution to its ongoing tussle with the U.S. Food and Drug Administration, which has said 23andMe cannot use its mail-in testing kits told the company it could no longer to return health information to its customers. That decision was a massive blow to the firm’s bottom line and a major hit to sales for the company, which is backed by Facebook billionaire Yuri Milner and run by Google founder Sergey Brin’s wife, Anne Wojcicki.
Still, 23andMe said Tuesday that the Genetech deal is the first of 10 to be signed with large biotech and pharmaceutical firms—with details on those deals presumably to arrive later—and said it remained steadfast in its resolve to bring DNA sequencing to the mass consumer. The size of the deal is a ringing endorsement for the company’s mission, Wojcicki told Forbes.
“I think that this illustrates how pharma companies are interested in the fact that we have a massive amount of information,” said Wojcicki, 23andMe’s chief executive and co-founder. “We have a very engaged consumer population, and these people want to participate in research. And we can do things much faster and more efficiently than any other research means in the world.”
Indeed, Alex Schuth, head of technology innovation and diagnostics business development at Genentech, told Forbes that he was initially interested in the startup because of the 12,000 patients 23andMe has recruited with the help of the Michael J. Fox Foundation.
“That is something unparalleled,” he said. “Obviously the goal for us for this collaboration is target discovery to find new medicines for patients in a disease-modifying sort of way.”
So far, 23andMe’s partnerships have been limited but lucrative. It has a deal in place Pfizer to enroll more than 10,000 patients with colitis or Crohn’s disease and it said Tuesday it will use its connection to Genentech to help that company tackle genetic causes or markers for Parkinson’s disease.
Some privacy advocates reacted to the deal Tuesday with dismay, pointing out that many of 23andMe’s “community,” as the firm calls its database, may feel misled that they donated their DNA information to what they thought was a nonprofit, only to have it sold on to biotech’s highest bidders.
“I’m sure some people will feel great, no problem, and some will feel cheated,” said Hank Greely, director of the Center for Law and the Biosciences at Stanford University. “And the reactions will form a bell curve.”
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