Introduction
It’s a scene that’s become increasingly common: A customer spits into a plastic tube, seals it, and drops it in the mail. Weeks later, an email arrives with a link to a trove of personalized genetic data offering clues to their ancestry and health. For millions of people, this experience is made possible by one company: 23andMe.
Since its founding in 2006, 23andMe has been at the vanguard of the direct-to-consumer (DTC) genetic testing movement, promising to democratize access to genetic insights. The company’s mission is ambitious: to help people access, understand, and benefit from the human genome. By doing so, 23andMe aims to transform the healthcare experience, shifting the paradigm from reactive to proactive, and from one-size-fits-all to personalized.
But the company’s journey has been anything but straightforward. 23andMe has navigated scientific skepticism, clashes with regulators, privacy concerns, and debates about the medical value and societal implications of its services. Its story illustrates the immense promise and weighty responsibilities of putting the power of genetics directly into consumers’ hands.
Pioneering Direct-to-Consumer Genetics
When 23andMe launched, the idea of selling genetic tests directly to consumers was novel and controversial. Traditionally, such tests were only available through healthcare providers, often requiring a prescription. 23andMe’s cofounders, Linda Avey and Anne Wojcicki, saw an opportunity to bypass the medical establishment and empower consumers with direct access to their genetic information.
23andMe’s flagship product was the Personal Genome Service (PGS), initially priced at $999. Customers would provide a saliva sample and receive reports on their ancestry composition and genetic predispositions for certain traits and health conditions. The company positioned PGS not as a diagnostic tool but as a way for customers to explore their genetics, inform their health decisions, and contribute to research.
In its early years, 23andMe attracted a diverse customer base of early adopters, including tech enthusiasts, genealogy buffs, and individuals with health concerns. By 2012, the company had sold over 180,000 kits, generating a wealth of genetic and phenotypic data.
But as 23andMe grew, offering an expanding array of health-related reports, it began to draw the attention of regulators.
Clashing with the FDA
In November 2013, the U.S. Food and Drug Administration (FDA) sent 23andMe a sternly-worded warning letter, ordering the company to immediately stop marketing its PGS product. The agency argued that 23andMe was selling an unapproved medical device and expressed concern that customers could misinterpret health results or make ill-advised medical decisions.
The letter sparked a firestorm of media coverage and forced 23andMe to reevaluate its approach. Wojcicki made the difficult decision to comply with the FDA’s demands, halting health-related testing. It was a major setback for the company, but also an inflection point.
Over the next two years, 23andMe worked closely with the FDA, conducting extensive validation studies. In 2015, these efforts bore fruit when the FDA granted 23andMe the first-ever authorization for a direct-to-consumer genetic test for Bloom syndrome. Additional approvals followed, and by April 2017, 23andMe was once again able to offer health predisposition and carrier status reports, now with the FDA’s blessing.
The FDA’s authorizations marked a major milestone not just for 23andMe, but for the DTC genetic testing industry as a whole. They established a regulatory pathway and scientific standards that other companies could follow. More broadly, they suggested a growing acceptance that, with appropriate oversight and communication, consumers could be trusted with direct access to an increasing range of genetic health information.
Becoming a Research Powerhouse
Even as it navigated the evolving regulatory landscape, 23andMe was pursuing another ambitious goal: leveraging its customer data to accelerate genomic research and drug discovery.
From its earliest days, 23andMe had an unconventional research model. When customers signed up for testing, they were asked if they wanted to consent to participate in research. To the company’s surprise and delight, the vast majority — over 80% — said yes.
This opt-in model allowed 23andMe to amass a research cohort of unparalleled scale and diversity. By 2015, the company had collected genotype data from over 1 million customers, along with phenotypic information voluntarily submitted through online surveys. This rich dataset represented a potential treasure trove for studying the links between genetics, behavior, and health.
To maximize the impact of its data, 23andMe began forging research collaborations with academic institutions, nonprofits, and biotech and pharmaceutical companies. These partners could tap into de-identified, aggregate-level data to study the genetic underpinnings of diseases and traits and to identify potential drug targets.
One of the most prominent collaborations came in 2018, when 23andMe announced an exclusive four-year deal with pharmaceutical giant GlaxoSmithKline (GSK). As part of the $300 million agreement, GSK gained access to 23andMe’s statistical analyses and could ask 23andMe to conduct analyses on their behalf, with the goal of identifying novel drug targets. The companies would co-develop any therapeutic assets through Phase 1 clinical trials, at which point GSK had the option to assume full development.
The GSK deal marked a major validation of 23andMe’s research model and illustrated the company’s increasing focus on drug discovery. By 2020, 23andMe had identified over 30 therapeutic targets across oncology, immunology, cardiovascular disease, and other areas. The company had also advanced its first wholly-owned drug development program, a potential treatment for inflammatory diseases, into preclinical studies.
Beyond specific discoveries, 23andMe’s research efforts have helped to democratize genomic research. Historically, large-scale genetic studies skewed heavily towards individuals of European descent. 23andMe’s customer base, while still not fully representative of the general population, is significantly more diverse. By 2018, nearly 50% of research participants self-identified with a non-European ethnicity. This diversity enhances the scientific value and potential impact of the research.
Navigating Privacy Concerns and Controversy
As 23andMe’s customer base and research cohort grew, so did concerns about genetic privacy. Some critics argued that 23andMe’s consent model, where research participation was opt-out by default, didn’t go far enough in educating customers about potential risks. Others raised alarm that de-identified genetic data could potentially be re-identified, or that data could be misused by employers, insurers, or law enforcement.
23andMe has worked to address these concerns through both policy and technology. The company operates under an extensive Privacy Statement and Research Consent Document, and gives customers granular control over how their data is collected, accessed, and shared. 23andMe has also invested heavily in data security, achieving compliance certifications under standards like ISO 27001.
But challenges remain. In June 2020, 23andMe experienced a data breach in which unauthorized access was gained to the accounts of approximately 100 customers. While the company found no evidence that sensitive information like genetic data was compromised, the incident served as a sobering reminder of the risks inherent in collecting and storing massive amounts of personal data.
Concerns have also been raised about the broader societal implications of widespread consumer genetic testing. In 2018, law enforcement famously used genetic data from third-party genealogy websites to identify a suspect in the notorious Golden State Killer cold case. This touched off a heated debate about genetic privacy, consent, and the use of these databases for forensic purposes.
As a leading player in the consumer genetics space, 23andMe has not been immune to this controversy. The company has tried to balance the privacy of its customers with the potential public good of assisting law enforcement. 23andMe’s policy is to resist law enforcement inquiries, and the company reports that it has not shared customer data with any law enforcement agencies. But the company has acknowledged that it may be legally compelled to do so in extraordinary circumstances.
More broadly, the rise of DTC genetic testing has sparked discussions about the potential for genetic discrimination, the psychological impacts of receiving unexpected health information, and whether consumers are equipped to navigate the complex ethical dimensions of their genetic data. While 23andMe maintains that knowledge of one’s genetic risks can be empowering with appropriate context and support, the company has faced criticism that it profits from consumer anxieties while offloading the burden of interpretation and consequences onto individuals and society.
As the science of genetics advances and testing becomes more accessible, these debates are likely to intensify. 23andMe’s approach – empowering consumers with direct access to a wide range of genetic information – represents one philosophy, but it is not without risks and downsides. Striking the right balance between individual autonomy, scientific progress, and societal protection will be an ongoing challenge.
Looking Ahead
Today, nearly 15 years after its founding, 23andMe is at an inflection point. The company went public in June 2021 through a merger with a Richard Branson-backed special purpose acquisition company (SPAC), and now trades on the Nasdaq under the ticker symbol “ME.” The deal valued 23andMe at $3.5 billion and provided over $750 million in gross proceeds to fuel growth and expansion.
But 23andMe also faces headwinds. The company is still not profitable, posting a net loss of over $217 million in its fiscal year 2021. It faces increasing competition, not just from other DTC testing companies like Ancestry but from tech giants making inroads into healthcare. Additionally, sales of 23andMe’s flagship PGS product have slowed, as much of the early-adopter market has been tapped. In a sign of these challenges, 23andMe laid off about 100 employees, or 14% of its workforce, in early 2022.
In response, 23andMe is betting that its brand, scientific chops, and unique data assets will enable it to diversify beyond genetic testing into the broader realm of personalized healthcare. A key part of this strategy is the company’s growing focus on drug discovery and development, where it believes its huge trove of genetic and phenotypic data gives it an edge in identifying promising targets.
At the same time, 23andMe is looking to become a more integral part of its customers’ healthcare journeys. In October 2021, the company acquired Lemonaid Health, an on-demand platform for accessing medical care and pharmacy services online. The deal gives 23andMe a path to providing primary care services that take into account customers’ genetic profiles.
This vision – where genetic insights are woven seamlessly into an ongoing, personalized care experience – represents a potentially transformative application of 23andMe’s assets and expertise. But executing on it will require navigating a labyrinth of scientific, regulatory, and ethical complexities, not to mention the challenge of shifting healthcare’s notoriously stubborn status quo.
As 23andMe charts this path, it will need to grapple with enduring questions around its social contract with customers and society. What does truly informed consent look like in an age of big data, machine learning, and commercialization pressures? How can the company maximize the scientific and medical benefits of its unparalleled research cohort while vigilantly protecting individual privacy and autonomy? And what role and responsibilities does a for-profit company have in shaping something as intimate, consequential, and philosophically fraught as our relationship with our own genome?
The answers are not yet clear, but 23andMe’s journey – its successes, stumbles, and evolutions – offers a case study in the opportunities and challenges of building a mission-driven business at the bleeding edge of science and societal transformation.
“We started 23andMe with the belief that by getting people interested and engaged in their genetic information, we could accelerate research and ultimately help people live healthier lives,” Wojcicki has said, reflecting on the company’s first decade and a half. We’ve made incredible progress, but in many ways, we’re just getting started. The next 15 years will be about deepening the insights, expanding the impact, and realizing the full potential of the genomic revolution we helped start.
Key Milestones
- 2006: 23andMe founded by Linda Avey and Anne Wojcicki
- 2007: Personal Genome Service (PGS) launched at $999 per kit
- 2008: Time Magazine names PGS “Invention of the Year”
- 2012: 23andMe surpasses 180,000 customers
- 2013: FDA orders 23andMe to stop marketing health reports
- 2015: 23andMe surpasses 1 million customers; gets first FDA approval for direct-to-consumer genetic test (Bloom syndrome)
- 2017: FDA approves 23andMe’s genetic health risk and carrier status reports
- 2018: 23andMe partners with GlaxoSmithKline in $300M deal to leverage genetic data for drug discovery
- 2021: 23andMe goes public via SPAC at $3.5B valuation; acquires Lemonaid Health
- 2022: 23andMe surpasses 12 million customers; lays off 14% of workforce amid slowing sales growth
Lessons and Takeaways
23andMe’s rollercoaster journey offers valuable lessons for entrepreneurs and companies operating at the frontiers of science, technology, and healthcare:
- Embrace regulatory challenges as opportunities: 23andMe’s proactive, though sometimes rocky, engagement with the FDA helped create a viable path for DTC genetic testing and enhance the company’s scientific credibility.
- Prioritize customer trust and informed consent: In handling sensitive genetic data, companies must go above and beyond in security and transparency while striving to maximize user agency and control.
- Recognize the ethical dimensions of data-driven business models: Companies built on aggregating personal data must grapple seriously with issues of privacy, fairness, and societal impact, not just legal compliance.
- Balance research potential with individual empowerment: 23andMe’s core value proposition involves both contributing to scientific progress and providing customers with actionable insights. Striking this balance requires deep investment in ethical frameworks, user education, and support resources.
- Broaden access and representation in research: 23andMe’s massive, diverse dataset enhances the generalizability and impact of genomic research, underscoring the importance of inclusive, participatory models.
- Adapt to stay ahead of the curve: As one of the first movers in a rapidly evolving space, 23andMe has had to continuously reinvent itself, from pivoting in response to regulatory challenges to expanding from DTC testing into new frontiers like drug development and primary care.
The 23andMe story is still unfolding, and its ultimate impact is yet to be determined. But one thing is clear: the company’s journey embodies both the immense promise and the thorny challenges of the genomic revolution. As our understanding of the genome deepens and more people gain access to their genetic information, companies like 23andMe will play a central role in shaping how we use that knowledge to understand ourselves, improve our health, and push the boundaries of science.
In the process, they will continue to grapple with profound questions about privacy, autonomy, equity, and the commercialization of our most intimate biological data. How we as a society answer those questions may ultimately determine whether the genomic revolution fulfills its grandest ambitions or slides into a dystopian cautionary tale.
For now, 23andMe’s story offers a glimpse into that unfolding future – its perils and its potential, its setbacks and its breakthroughs. And it reminds us that as we stand on the brink of a new era of personalized medicine, we have both an opportunity and an obligation to thoughtfully shape the path ahead.