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From Consumer Genetics to Drug Development

Part of consumer genetics firm 23andMe's pitch to customers is that its test will give them a glimpse into themselves, but the company also gathers and bundles customers' data to be sold, writes Antonio Regalado at Technology Review.

Last year, the firm sold access to its data — from customers who've consented to take part in research — to a dozen drug companies, including a deal with Genentech for a Parkinson's disease study that would include sequencing 3,000 customers to search for drug targets.

"That means 23andMe is monetizing DNA rather the way Facebook makes money from our 'likes,'" Regalado says. "What's more, it gets its customers to pay for the privilege."

This business model, he says, is the driving force behind 23andMe's $1 billion valuation. The approach may also be "prescient," he adds, as newer efforts like the Precision Medicine Initiative also try to build up their own databases. Currently, he says 23andMe's database is the largest database of DNA samples accompanied by health and survey information, which makes it attractive to drug developers.

The firm is also getting into drug development itself, Regalado points out. Also in 2015, it launched a therapeutics group with former Genentech executive Richard Scheller at the helm. "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," Regalado says.