The bidding war for buying 23andMe

This week an interesting bidding war between former 23andMe CEO, Anne Wojcicki, and the pharma giant, Regeneron, is unfolding in the courts over acquisition of 23andMe. Regeneron placed a bid of $256M to acquire 23andMe both for its genetic data and for its customer base and Wojcicki is fighting to buy it herself.

23andMe was founded in 2006, IPO’d in 2021, and then their share price dropped >95% in the years that followed. They were never profitable, had a one-time genetic product that lost steam, had a promising start in therapeutics in partnership with large pharma (GSK and others) but ultimately couldn’t raise venture to fund it, and failed to create successful enough additional revenue-generating products in time to keep them afloat.

I’d still argue that they were one of the most successful and important consumer health companies ever built. They paved the way for what I think will be a revolution in personalized telehealth companies in the next decade.

23andMe declared Chapter 11 bankruptcy this Spring as part of preparations for selling the company.

To bid on the company she founded, Anne Wojcicki has created the non-profit, TTAM Research Institute, which only has landing page up online. The website’s “About Us” description reads “dedicated to helping scientists and non-scientists join together to unravel the mysteries of DNA - the code of life. We believe everyone should have the opportunity to access their individual genetic code and be empowered to contribute it to scientific research.”.

If Wojcicki wins the bidding war, does that mean 23andMe will be a non-profit? Will they give everyone access to data in a privacy protected way? That would be great.

I would like to read the story of 23andMe and watch the Netflix documentary that I hope are coming soon. Walter Isaacson, if you are reading this, please add it to your list of books to write.

I have so many questions for Anne.

Having sold 14M genetic tests, 23andMe has a giant market reach with people interested in their health. It seems like they should have been successful with their additional products that could provide new revenue streams (whole genome sequencing) and recurring revenue (telehealth from their aquisition of Lemonaid). They even introduced a biological aging test at one point this year.

Was this just too little too late? At one point in 2016, Wojcicki backed off of their whole genome sequencing product saying that it was too complicated to explain to consumers. I disagree.

I think we just haven’t had a company nail the explanation and user interface yet for a whole genome sequencing product. I speak with private payer clinicians regularly and have yet to speak with one that is truly happy with their genetics offering for clients. Genetics is important and actionable information and the public would see its value if it was properly explained.

A lot of the criticism I hear from consumers around me is that the 23andMe test just wasn’t that useful. It wasn’t that useful because they were missing so much information in testing only 1% of the genome and they were only really scratching the surface in terms of the information they were providing to consumers.

Personally, I felt validated to know from my 23andMe results that I am genetically predisposed to be a night owl and to be afraid of heights, both of which are true, but that information is really just a novelty. I also learned some new information about my family that was both a blessing and destabilizing from the ancestry information, which I am happy to know.

But I had to sequence my own genome to start really gleaning insights that matter for my health. 23andMe only tests for one genetic typo for Alzheimer’s for instance, the APOE4 allele. APOE4 only accounts for 30% of the genetic risk for Alzheimer’s. At NeuroAge we test for more than 60 typos that contribute to Alzheimer’s risk.

The cost of whole genome sequencing has gone from $1M per genome in 2007, to $10,000 in 2014, to around $250 today. That price drop has made consumer whole genome sequencing feasible. I expect it to drop even further.

It also means that with >100X more information than 23andMe’s testing, there is a lot more richness and a lot more complexity to explain. One new set of information surrounds “rare variants”. These are typos that occur in people very rarely, the vast majority of which were not tested using the 23andMe platform. Identifying them can help people prepare for or even prevent diseases that they are destined for genetically.

Some of these rare variants are also “good” and can give us clues how to prevent diseases. We may identify someone with a genetic variation that we would predict to cause a disease and then it turns out they never end up being diagnosed. Why would that be?

In some cases these individuals have another “good variant” somewhere else in their genome that is making up for it. Some members of a family with an early-onset form of Alzheimer’s also had one such “good variant” in a gene called NRLP3. That genetic insight has driven the development of a new therapeutic in clinical trials for Alzheimer’s by Halia Therapeutics. BioAge Labs, a publicly traded longevity biotech, is also pursuing a therapeutic for this target.

Why was 23andMe so slow and conservative when it came to DNA testing? This could be explained by their battle with the FDA over what and how they could disclose sensitive genetic information to consumers. Ultimately the FDA gave the greenlight to 23andMe to disclose disease genetics to consumers for more than 60 conditions. This negotiation paved the way for newer companies to have a clear path to giving consumers more information about their genetic risk.

Genetics is really just the beginning of the data that will be available about people’s health in the near term. If you think of genetics as the sketch outline of a sculpture, epigenetics, transcriptomics, proteomics, metabolomics, and lipidomics are the depth, color, texture, size, and light that layer on its richness. Soon all of this data will be available at an affordable price from people’s homes. We will need to explain it to consumers, contextualize it, and provide actionable insights.

Having this data combined with health records and functional assessments is exponentially more valuable for drug discovery than 23andMe’s capture of 1% of the genome on its own. In the age of AI, this is the training data that we need to accelerate therapeutics that will lead to rapid breakthroughs.

23andMe was the first in their category and is certainly not the last. This is just the beginning of consumer facing genomic-informed telehealth. It feels inevitable that health data will be in the hands of consumers, transparent, explained well, and easy to assess from the comfort of their own homes. I am frankly very excited for this future for myself and for the world.