23andMe Turns Spit Into Dollars in Deal With Pfizer

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23andMe CEO Anne Wojcicki
Anne Wojcicki, co-founder and chief executive officer of 23andMe Inc., speaks during a Bloomberg Television interview in San Francisco, California, on Oct. 9, 2014. Photographer: David Paul Morris/Bloomberg

23andMe Inc., the genetic-testing startup backed by Google Inc., is sharing DNA data on about 650,000 individuals with Pfizer Inc., to help find new targets to treat disease and to design clinical trials.

The collaboration with Pfizer is the broadest announced so far in 23andMe’s ambitious plan to become a repository for humanity’s genetic makeup, and to turn data gathered from $99 saliva tests sold to consumers into multimillion-dollar deals with drugmakers.

The agreement unveiled today gives the U.S.’s largest drugmaker access to anonymous, aggregated information from consumers who bought 23andMe’s test over the past seven years to learn about their own genetic histories. It includes only people who agreed to let their data be used in research. Pfizer and 23andMe declined to give the deal’s value.

The Silicon Valley startup, named for the 23 pairs of chromosomes in human cells, is betting its growing troves of genetic data will prove essential to drug companies, medical researchers and even health and wellness companies.

Even as it seeks to expand its consumer tests around the world, the company is repairing relations with the U.S. Food and Drug Administration. An agency ruling in late 2013 left 23andMe unable to sell health analyses from the saliva tests.

While about two-thirds of 23andMe’s 800,000 customers agreed to let their test data be used in research, data-sharing agreements with drugmakers are likely to raise the hackles of privacy advocates who have questioned the wisdom of compiling highly personal information.

Ten Deals

The deal gives Pfizer access to a broad cross-section of data, the first agreement in which a drugmaker has access 23andMe’s newly created research portal. 23andMe Chief Executive Officer Anne Wojcicki plans to pitch the service to other health companies this week at the JPMorgan Healthcare Conference in San Francisco. The company plans to announce a total of 10 similar deals with drugmakers and biotechnology companies this year.

23andMe, based in Mountain View, California, is near the Bay Area’s biggest technology companies, including Google, co-founded by Wojcicki’s husband Sergey Brin. The two are separated, though still legally married.

Google’s venture-capital arm and investors such as Russian billionaire Yuri Milner, Johnson & Johnson and venture-capital firm New Enterprise Associates have contributed $126 million in funding to date, according to 23andMe.

The company isn’t yet profitable, and it’s too early to consider an initial public offering, Wojcicki said.

Disease Studies

While Pfizer has already worked with 23andMe to enroll 10,000 patients for irritable bowel disease research, the deal broadens their collaboration. Pfizer and 23andMe will also enroll 5,000 patients to conduct a study on the genetics of autoimmune disease lupus.

The company has also signed agreements on specific diseases, including one with Roche Holding AG’s Genentech unit announced last week, to study Parkinson’s disease patients.

Genentech will use the data to find the connection between patients’ symptoms and other personal traits, and their genetics, said Alex Schuth, head of technology innovation and diagnostics in business development at Genentech, in a telephone interview.

Genentech is paying 23andMe $10 million upfront and as much as $50 million if the deal hits certain milestones.

The appeal to Pfizer and Genentech isn’t just the size of 23andMe’s data set -- it’s the additional information that the company collects on users’ personal lives.

Most Personal Details

Every time consumers who bought the kit return to 23andMe’s website, they are prompted to answer more questions from an “infinite question box,” which quizzes them on everything from hair color to bra size, said Patrick Chung, a 23andMe board member and a partner in the Cambridge, Massachusetts-based venture capital firm Xfund. That additional information can help researchers make more connections about people’s characteristics and their health.

23andMe plans to debut in other countries this year, said President Andy Page in a telephone interview, though he declined to name the locations. The consumer spit kits, which include reports on known risk factors for Alzheimer’s, Parkinson’s and cystic fibrosis, started sales in Canada and the U.K. last year.

The company has also given its kits away to get a more diverse set of genes for its database, including giving away 10,000 kits to black Americans one year, Wojcicki said. “You’ll see us in the future sponsoring those kinds of programs,” she said.

Yoga DNA

23andMe’s ambition to gather and sell such deep data on its customers has also worried privacy advocates. The company said it strips out its customers names when it sells data.

“One could easily imagine how insurance companies and pharmaceutical firms might be interested in getting their hands on your genetic information, the better to sell you products (or deny them to you),” journalist Charles Seife wrote in Scientific American in a late 2013 article criticizing 23andMe.

Wojcicki envisions a market for genomic data that’s eventually much wider than drug companies, bringing in customers including doctors and retailers. “If I can show you that yoga could really slow heart diseases, what would Lululemon do?” she said, referring to the maker of trendy athletic wear.

Chung, the board member, said 23andMe’s data can bring great social benefits as it expands. “You can imagine how interesting it would be to genotype the entire population at birth,” he mused. “Then you know which ones are more at risk for heart disease or breast cancer, and you can say, come in please and get screened more often.

‘‘You’ll make that citizenry more healthy at a lower cost,’’ provided, of course, that they consent to the tests being done, said Chung. ‘‘It’s like the holy grail.’’

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