23andMe Rakes in $79 Million As It Looks to Develop Own Drug Pipeline
Published: Jul 09, 2015
July 7, 2015
By Alex Keown and Riley McDermid, BioSpace.com Breaking News Staff
MOUNTAIN VIEW, Calif. -- California-based 23andMe , known for its home DNA testing kit, is seeking to raise $150 million as the company looks to begin developing its own drug pipeline, Bloomberg Business reported this morning.
Mobihealthnews reported the company is more than halfway to that goal, having raised approximately $79 million. Investors in the company are undisclosed, according to the company’s filing with the Securities and Exchange Commission.
The latest fundraising effort is the company’s largest to date, with 23andMe having raised approximately $190 million since its founding in 2006. Past investors include Google Ventures, Johnson & Johnson , MPM Capital, New Enterprise Associates, Sergey Brin, Esther Dyson and Facebook billionaire Yuri Milner.
The new round of funding will likely help the company continue with the development of its new therapeutics division. In March 23andMe began to delve into the therapeutics market, to create a third pillar behind the company’s personal genetics tests and sales of genetic data to pharmaceutical companies.
To bolster its new therapeutics unit, the company has been making strides by nabbing senior pharma officials from big companies, such as Genentech . In April the company named Robert Gentleman, formerly the senior director of bioinformatics and computational biology at Genentech, as the company’s vice president of computational biology. The month prior to Gentleman’s appointment, the company announced the hiring of Richard Scheller, a former Genentech executive. Scheller was named the company’s chief science officer and head of its newly created therapeutics department. Scheller was executive vice president of research and early development at Genentech, and oversaw the company’s basic research in oncology, immunology, neuroscience and infectious disease.
The company has a DNA data collection partnership with Genentech worth up to $50 million. To date 23andMe has collected data from more than one million customers who submitted their DNA to the company’s databank by using the $99 DNA kits developed by the company. At the time of his hiring, Sheller said the company’s internal development group will be able to use the enormous genetics database without restriction to what they are looking for then” work on the very best and most convincing targets that come out of the search process.”
“I think that this illustrates how pharma companies are interested in the fact that we have a massive amount of information,” said Anne Wojcicki, 23andMe chief executive officer and co-founder in a statement at the time. “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.” Wojcicki is also the wife of Google Inc. founder Sergey Brin.
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.”
Additionally the company has a deal with Pfizer Inc. to enroll more than 10,000 patients with colitis or Crohn’s disease. In May 23andMe inked another deal with Pfizer to launch the Lupus Research Study. The aim is to enroll 5,000 individuals with systemic lupus erythematosus to better understand the genetics of lupus. The effort is also in collaboration with the Lupus Research Institute.
Some privacy advocates have objected to 23andMe’s selling its DNA database information to pharmaceutical companies. However, the company said more than 80 percent of their customers have chosen to participate in the genetic research deals inked by the company, 23andMe said after announcing its one millionth customer last month.
“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.”
23andMe has had its shares of troubles. The company was slapped by the U.S. Food and Drug Administration (FDA) for overly-aggressively marketing the saliva-based test kits as medical tests. As a result, the company was forced to stop selling the kits for medical or diagnostic uses, although they could continue to sell them without offering clinical diagnostics. The company continues to sell its DNA kit, but only for ancestry information.
After Bristol-Myers Squibb Wonder Drug Meets Endpoints, Will FDA Process Be Up to Snuff?
Our most popular story last week was about a new wonder drug that wowed the FDA. An experimental anticoagulant drug under joint development between Portola Pharmaceuticals, Inc., Bristol-Myers Squibb Company and Pfizer Inc. met all primary and secondary endpoints in a Phase III study determining safety and efficacy—and our readers responded. The hope now is it will be sped to patients as fast as possible.
That’s lead BioSpace to ask, what do you think about the drug approval process in this country? Let us know your ideas.