23andMe selling consumer DNA data to biotechs

23andMe, the gene-testing company valued at $9bn has revealed it sold access to its data containing DNA information of 1.2m people to more than 13 drug companies, in particular, Genentech which paid up to $10m to access data of those with Parkinson's disease. The genetic testing company's biobank is the world's largest collection of DNA samples and also includes extensive health information gathered from survey questions.

That means 23andMe is monetizing DNA rather the way Facebook makes money from our “likes.” What’s more, it gets its customers to pay for the privilege. That idea so appeals to investors that they have valued the still-unprofitable company at over $1 billion. “Money follows data,” says Barbara Evans, a legal scholar at the University of Houston, who studies personal genetics. “It takes a lot of labor and capital to get that information in a form that is useful.”

The company almost didn’t survive to build its database. In 2013, the U.S. government forced 23andMe’s flagship health test off the market when it charged, in one of the angriest letters the Food and Drug Administration has ever sent to a private company, that the company’s gene predictions were inaccurate and dangerous for those who might not fully understand the results.

Wojcicki apologized and continued offering more limited ancestry tests. But she never really changed her idea. By last fall, the government agreed to allow some health information back on the market—for example, letting customers know whether they’re carriers of risk genes like the one that causes cystic fibrosis. Wojcicki has vowed she “will not sleep” until the full results (which once included estimates of a person’s risk for diabetes, macular degeneration, and breast cancer) are available again.

To some, 23andMe’s strategy is controversial for the way it treats personal data as a commodity. But “prescient” may be a better word. Even the U.S. government is catching up. President Obama’s Precision Medicine Initiative will begin inviting citizens to join its own one--million-strong database this year. And just like 23andMe, it must find ways to entice the public to join.

For now, though, 23andMe’s biobank is the world’s largest repository of DNA samples that also contains extensive health information, willingly provided by customers who answer survey questions like “Do you like cilantro?” and “Have you ever had cancer?” 23andMe says its customers supply it with as many as two million new facts each week. These surveys are proving valuable to drug investigators. This year the company found genetic variations strongly linked to whether customers consider themselves early risers, offering a clue about how to develop drugs that modulate alertness.

When it receives a spit sample, 23andMe examines about 650,000 locations in its customer’s genomes. That’s not as detailed (or expensive) as generating a complete, letter-by-letter genome map. Yet the technology captures the big picture of which genes a person has. It allows 23andMe to tell you, for instance, that your eyes are probably blue rather than brown.

To gain the volume of information necessary to study specific diseases, 23andMe has recruited patients by giving the test away for free. One person who joined the database is Amy Caron, who was diagnosed with lupus, an autoimmune disorder, at age 22. Caron agreed to submit her DNA as part of a study of lupus financed by Pfizer. Very little is known about the disease, and filling out surveys “is a safe, low-risk way to get involved and contribute,” she says.

This spring 23andMe also opened a drug lab, where it will begin testing some of its own treatment ideas. It’s the first time the company has done work at a lab bench rather than a computer screen, says Joyce Tung, the company’s vice president of research. To some observers, finding drugs is the only way 23andMe can justify the value investors have given it, since the company has never turned a profit from its tests.

Another reason 23andMe can’t stand still is that genetic technology keeps advancing, and it keeps getting cheaper. That means lots of companies are offering low-priced gene tests. One even promises to fully decode a person’s genome for $1,000. Yet unlike 23andMe’s test, these must be ordered by a doctor, in order to avoid regulations covering direct-to-consumer medicine.

Wojcicki still believes the public is able to deal with the sort of complex information that can be gleaned from DNA “without a middleman in a white coat delivering it,” as she recently told the Wall Street Journal. Instead, it’s 23andMe that’s in the middle.