23andMe Begins to Rebuild With New Business Model
Just months ago, it appeared 23andMe was down for the count. The laboratory had been stopped in its tracks last fall, when the Food and Drug Administration (FDA) ordered it to stop offering genetic interpretations of the DNA kit it was selling directly to consumers. The FDA had considered the test—which analyzed the saliva of […]
Just months ago, it appeared 23andMe was down for the count. The laboratory had been stopped in its tracks last fall, when the Food and Drug Administration (FDA) ordered it to stop offering genetic interpretations of the DNA kit it was selling directly to consumers. The FDA had considered the test—which analyzed the saliva of customers and assessed their risk of contracting some 200 medical conditions ranging from digestive disorders to cancers—as an unregulated medical device. As a result, 23andMe required regulatory approval in order to market it to the public, which the Mountain View, Calif.-based business had not pursued. This not only led to 23AndMe suspending its sending of results to consumers who had already purchased the kit but also relegated it to providing general ancestral background for those customers still willing to shell out $99 for the test—all the while posting vague announcements on its Web site that it was working with federal regulators to resolve any outstanding issues. Those issues have yet to be resolved. But just a few months later, the company is counting its contracts. Having already screened some 650,000 people before it stopped issuing test results, 23andMe used that data in part to remake itself as a facilitator of the gathering of genetic and population health data for both the government and private sector. It also has made several significant additions to its executive staff in recent months, hiring a chief medical officer, a chief legal and regulatory officer, and a vice president of corporate communications. Toward the end of July, 23andMe announced that it had secured a two-year, $1.37 million grant from the National Institutes of Health (NIH). The money will be used to conduct Internet-based surveys to identify novel genetic associations, allow outside researchers to access deidentified data from 23andMe’s databases, and beef up its ability to collect phenotypic data. And earlier this month, 23andMe entered into a contract with drug manufacturer Pfizer. It will enroll up to 10,000 people into a study of inflammatory bowel disease (IBD). The data will be used for a study of the genetics of ulcerative colitis and Crohn’s disease. IBD, which affects about 1.4 million in the United States, often leads to ulcerative colitis and Crohn’s. “Pfizer is committed to bringing forward new treatments for patients suffering with IBD,” said Jose Carlos Gutierrez-Ramos, Pfizer’s senior vice president of biotherapeutics research and development. “By enhancing our understanding of the underlying biology of the disease, we hope to better support our clinical research activities and development programs.” The financial terms of the deal with Pfizer were not disclosed. In addition to the NIH and Pfizer deals, 23andMe is also trying to develop a new assay that would test patients for their risk of passing down Bloom syndrome, an inherited disorder that leads to stunted growth and weight and an enhanced risk of contracting cancer at a young age. It is going through the normal FDA approval process for that test. A 23andMe spokesperson did not respond to e-mail and telephone requests seeking comment. In a recent interview with Forbes magazine, company co-founder and Chief Executive Officer Anne Wojcicki indicated that her management team moved quickly to rebuild after the issues with federal regulators. “We’ve made mistakes. When you try new things, you will make mistakes. That’s OK. We will make mistakes again in the future,” she said. “The best thing you can do is to understand how you quickly recover. A lot of companies would shut down in this situation, but we looked at how do we double down.” Takeaway: After getting slapped down by the FDA, 23AndMe appears to be getting on its feet.