Startup Spotlight: 23andMe

How are the human genome company performing today?


This July, Genetics analytics company, 23andMe, became the latest company to hit Unicorn status.

The company - which launched its ‘personal genetics kit’ in the United Kingdom just last year - has been around in the US since 2006. The Google-backed venture screens user DNA and reports back with health traits related to family ancestry. The test looks for genes closely linked to serious illnesses - such as Sickle Cell Anaemia and Parkinson’s - and more trivial things like eye colour and whether someone is more inclined to blush after drinking alcohol.

Yet despite raising a reported $150 million in Series E venture capital, the company’s position in the US has been under scrutiny since 2013. Its relationship with the Food and Drug Administration [FDA], for example, is poor, with 23andMe ordered to stop marketing its personalized testing kits which advised people on their future health. Under US law, anything considered a ‘medical device’ has to be approved by the FDA.

According to the Scientific American - whose article on 23andMe starts with the line ‘If there’s a gene for hubris, the 23andMe crew has certainly got it’ - the company cut off contact with the FDA after a barrage of communications, giving the government agency no choice but to officially reprimand it.

The FDA only stopped 23andMe from ‘marketing’ the product, meaning that users can still request a kit if they wish. Additionally, the FDA recently gave the company the green light to sell kits which test for Bloom Syndrome - a disease which carries no symptoms but is linked to Cancer - maybe a sign that 23andMe and the FDA are starting to read from the same page.

Its conflicts with the FDA, however, have done little to dampen the company’s spirits. The FDA’s concern that 23andMe’s results would mislead, have actually allowed it to redefine its strategy, focussing on international markets and different ways to generate capital. The most important of these is the announcement in March that it would start developing its own drugs, something made possible by the data they have continued to collect from the kits.

23andMe’s aggressive dealings with the FDA might be explained by their future ambitions. Patrick Chung - a 23andMe board member, stated that ‘the long game here is not to make money selling kits, although the kits are essential to get the base level data.’ - this led Charles Seife to state: ‘What the search engine is to Google, the Personal Genome Service is to 23andM.’

The company wants to become the Google of personalized healthcare, and their personalized kits give them the data to do just that. It’s this ambition which has kept investors interested, as any hint of disapproval from the FDA would normally have been enough to scare people off.

However, with a growing presence internationally, 23andMe could become a world-leading company in the future.

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