23andMe: See How This Company Is Making Millions Selling Customer DNA Information To Big Pharma

The leading privately-held personal genetics company, 23andMe, has found a new source of revenue after the Food and Drug Administration asked it to stop providing health-related information based on customer’s DNA. With services limited to ancestry data, the number of subscribers began to dwindle. However, the company has found a new way to survive. It has pinned deals with pharmaceutical and biotech companies to sell customer DNA information for research and product development purposes.

The company says it is “dedicated to helping people access, understand and benefit from the human genome.” However, in 2013, the company’s hopes of providing customers with a complete profile based on their own personal DNA sample came to a halt. According to Time, the FDA became concerned that consumers could make medical decisions based on their results received by 23andMe making it a “medical device” that required FDA oversight. The FDA was also worried “that interpreting human genes—understanding what changes in DNA mean, and how they contribute or don’t contribute to disease—is still too much of a black box.” The company complied and the service is now strictly used for ancestry-related genetic reports.

However, with the company unable to provide health-related information, the number of customers dropped. Fortunately for those invested in 23andMe, the company has found a new way to bring in revenue by selling customer data to outside pharmaceutical and biotech companies.

Forbes reports that 23andMe signed a $60 million deal with Genentech, the U.S. unit of Swiss big pharma company Roche, for the genetic data of 3,000 23andMe customers that were determined to be at a higher risk for developing Parkinson’s disease. Wondering what exactly will Genentech by purchasing and what will it be used for?

“23andMe’s tests only scan the genome for known variations. Genentech wants to go deeper, and will pay to get full genome sequences – that’s all of a person’s DNA – for 3,000 Parkinson’s patients or their first-degree relatives. The goal, Schuth says, is to discover new targets for drugs and diagnostic tests. The companies have not yet decided who they will hire to do this DNA sequencing.”

This isn’t the first DNA sequences that 23andMe has sold to outside parties. In fact, last year, the company announced it would be collaborating with Pfizera for a Crohn’s disease genetic study. The thought of a company selling customer genome information may sound shady, but 23andMe has been sure to obtain consent from all genetic participants. In fact, an overwhelming majority of 23andMe customers have willingly offered up their DNA for research.

Forbes points out that about 600,000 of the company’s 800,000 customers have agreed to donate their data for research. This means these individuals have given 23andMe consent to sequence their genomes and sell that information if it is being used for medical research.

What do you think of 23andMe’s new business plan? Do you agree with the FDA’s assessment that a report providing health-related DNA information should be labeled as a medical device?