23andMe and You!

How one company is redefining the communication and use of healthcare information

23andMe, Inc. is the leading personal genetics company with a mission to help people access, understand and benefit from the human genome. They have sequenced over one million genomes, collected 320 million phenotypic data points (observable characteristics), published 45 peer reviewed studies in scientific journals and gained consent from 80%+ of users to participate in research [1].

From a business model perspective, the company is in the information business – providing genetic information both to consumers and companies. They use a B2C model to charge users a fixed price ($199) to complete genetic sequencing of their genome and then provide reports related to ancestry and/or health. The company also implemented a B2B model where they allow pharmaceutical companies or scientific partners to purchase access to their database of user genomes and phenotypes. They have currently partnered with 13+ companies [2]. Most recently, 23andMe declared they would also enter the drug development business.

123

From an operating model perspective, consumers purchase the kit online (or now at partners such as Walgreens and Target). They spit into a tube and mail it back to the 23andMe laboratories where 650,000 genome locations are sequenced. The user is then provided online access to their DNA and associated reports describing health and ancestry attributes. The online site also provides a means to connect and share information with family or friends, find unknown relatives, participate in research studies or access scientific content. For companies and scientific partners, they sell access to their data. Genentech paid $10 million to have access to Parkinson’s-related genetic data [2].

The opportunities for this business are tremendous. The company removed the friction of scheduling and going to a doctor by sending a kit directly to the consumer’s home and providing results online. The company offers the test at reasonable costs due to economies of scale. The social platform has allowed connection of relatives and even helped identify malpracticing fertility doctors [3].

24936289936_507c63c5e3_oFor the scientific community, the company has built an invaluable dataset that can speed the discovery of new therapeutic targets, identify unknown genetic mutations, etc… Recently, Regeneron identified 250 genes to target with drug therapies using a DNA database [4]. The process of target identification could take years, but now is being done in a matter of weeks. Additionally, the bioinformatics industry is expected to grow to $16.18 Billion by 2021 [5].

Of course, bringing genetics online and to the consumer is not without its challenges. 23andMe was at the forefront of personal genetics testing and providing health information direct to consumer. In fact, they are the only one of their kind. Previously, companies would work through the patient’s physician to deliver health information – 23andMe challenged this. Unfortunately, this was an area that was not yet well-defined in terms of regulation, and 23andMe was ultimately subjected to FDA scrutiny. Their product was classified as a medical device, and they were forced to remove aspects of their product from market after a Warning Letter in 2013 [6]. The warning letter was particularly harsh, and it took until 2015 for 23andMe to return some of the health reports back to their product offering.24962669965_ec7080d8e8_o

Additionally, competition has been growing in the genetics database business. FDA, EBI, NIH, the Broad Institute, Regeneron etc… have all started accumulating their own databases. Many government databases are free to access, which may dilute the value of the 23andMe database (which is still the largest in the world). There are also concerns with information privacy.

Because of the challenges listed above, it is not surprising 23andMe is trying to enter the lucrative (and risky!) drug development space. However, this is not a good move. Their operating and business models are currently established around collecting and sharing genetic information digitally, not drug development. This move would require a change in operating/business models, new workforce talent and capital. If they do find and gain approval for a drug, then they are also looking at adding supply chain infrastructure and manufacturing/commercial capabilities. There are other next steps more aligned with their current model:

  1. Add additional DTC health information, for example:
    1. Microbiome
    2. Epigenome
    3. Cancer screenings
    4. Standard Blood Tests
    5. Fertility Testing
  2. Work to create partnerships with Electronic Medical Record companies to bring genetic data into medical care decision-making

Many people are curious about their health, and 23andMe has built a platform that allows a consumer to get information without the frustration of scheduling an appointment, without the embarrassment of having to ask for a test, and without the ambiguity of cost. They should keep this model, but add more value through information and creating partnerships to help patients. Additionally, the aggregation of all this medical data (genetic and phenotypic) could unlock the cures and early diagnosis for many diseases. They have the potential to save thousands of lives a year.

WORD COUNT: 795


SOURCES:

[1] https://www.23andme.com/

[2] https://www.technologyreview.com/s/601506/23andme-sells-data-for-drug-search/

[3] http://www.indystar.com/story/news/crime/2016/09/12/fertility-doctor-facing-charges/90253406/

[4] http://www.reuters.com/article/us-health-precisionmedicine-insight-idUSKBN0NY0AX20150513

[5] http://www.prnewswire.com/news-releases/bioinformatics-market-by-sector-molecular-medicine-agriculture-forensic-animal-research–gene-therapy-product-sequencing-platforms-knowledge-management–data-analysis–application-genomics-proteomics–metabolomics-300358767.html

[6] http://www.fda.gov/ICECI/EnforcementActions/WarningLetters/2013/ucm376296.htm

Previous:

GE and the Industrial Internet of Things

Next:

Digital Innovation is Brewing at Starbucks

5 thoughts on “23andMe and You!

  1. I really believe this company is providing a remarkable service to the world and body of science as a whole. I actually just took part in their efforts to jumpstart genome sequencing for people of African descent (it was free as a result, which i appreciate).

    I agree with you that I don’t think they should enter the drug development space. Do you think there is a way for them to partner with research universities and medical experts (not for profit) to make use of the data they collect and the findings they are discovering every day. I know it will be challenging given the sensitivity of customer data but I feel their contribution to science could be so much more valuable without having to go down the drug development space. Perhaps this is one of those areas where the regulation hasn’t yet caught up with science and technology and they could help define and write those laws.

  2. Thank you for the article. 23andme undoubtedly offers an interesting product, however I do not see their current offering as a particularly useful product for either consumers, or pharmaceutical companies.

    For an individual, the majority of the information is quite generic, and I question whether anyone actually acts on say a 5% risk of disease y. Therefore, I can only see downside – potential for apprehension, paranoia, and over investigation by doctors. I am a strong believer in harnessing the power of genetics in order to improve human health, however this is just not the right setting in my opinion. Unless a certain test has a certain actionable treatment that can impact upon one’s life expectancy, 23andme is in my view nothing more than a gimmick.

    With regard to Pharmaceutical companies, one key issue with the data is that it lacks a link to patient’s clinical data. This data would be far more valuable if linked to patient’s clinical data, as one would be able to perform big data analysis in order to improve the understanding of genetics and its relationship with disease. Pharmaceutical companies could then use the insights from this data analysis in order to develop new therapeutics.

    I therefore have concerns about 23andme’s long term future, however I hope that they move away from consumers and try to focus on actually impacting upon patient’s lives by providing genetic tests to those who need it most at a low cost in order to increase access to such tests.

  3. Thank you for the article on this important topic. The blog post is a bit one-sided in painting a picture of what 23andme does, so there are a few points I’d like to clarify and hopefully get your view on.

    In terms of their service, 23andme doesn’t actually sequence the whole genome in their $199 product–rather, they sequence common genetic variants to inform your ‘carrier status’, along with some other non-disease causing traits and ethnographic studies. This is commonly confused with genetic diagnosis in the eyes of the public, thus the disclaimer found on 23andme’s website (in very small, faint gray font right at the bottom!).

    “Our tests cannot determine if you have two copies of the genetic variant. The tests are not intended to diagnose a disease, or tell you anything about your risk for developing a disease in the future. On their own, carrier status tests are not intended to tell you anything about the health of your fetus, or your newborn child’s risk of developing a particular disease later in life.”

    The reason this distinction is important is that direct-to-consumer genetic testing has huge potential to create anxiety and confusion in patients due to incidental findings, and the lack of access to a genetic counselor or clinical geneticist. Your blog post describes that needing to see a physician was a negative aspect before 23andme’s product was launched, but the consensus of doctors, advocacy groups for patients with genetic diseases, and nearly all genetic health companies (23andme included) is that you need professional advice in interpreting these reports, and ideally in considering the pros and cons before getting testing.

    Some situations that you aren’t likely to see on 23andme’s website are:
    1. A patient finding out they are at risk of a genetic disease they weren’t aware of, but are then required to disclose this to insurance companies as a pre-existing condition (and suffer high premiums as a result)
    2. A patient who finds out they have a severe genetic disease with onset later in life (e.g. Huntington’s disease), when they may not have wanted to know this in the first instance (given the disease is incurable), OR even if they did want to know their status, their parent may not want to know that (and by getting diagnosed, they automatically diagnose their parent against their will given the hereditary nature of the disease)
    3. The fact that their carrier screening covers most, but not all, genetic variants that can cause the diseases. So you have 23andme patients who purchased their test for cystic fibrosis, got the “all clear”, and went on to have a child with cystic fibrosis.

    Like all new DTC technologies, there are some ‘caveat emptor’ factors that should at least be considered before rushing headlong into adoption. Other Silicon Valley providers like Color Genomics have done a much better job of integrating genetic counselling into their technology platform, and largely as a result have avoided the warning letter of the FDA.

  4. Really enjoyed reading this post. I think you are spot on in thinking drug development is not the next best step for 23andme, and expanding their DTC offerings is a more logical next step. Maybe they could try to develop dominance in the DTC information space – briding the gap between EMRs and EHRs and patients by providing more transparent data directly to the patient, and perhaps feeding that back to the doctor. Creating a bridge between their current genetic sequenching offering and a connection to physicans who could help patients with the data surfaced could also be a way for them to take up more mindshare (and revenue) in the space.

  5. Thanks for the post. As Nick mentioned in his post above, I’m also curious as to how you view 23andMe positioned in the broader competitive landscape. The cost of genome sequencing has decreased in recent years and now a whole genome can be sequenced for
    under $1,000. This trend has contributed to a large increase in investment in all areas of genomic medicine, including sequencing machines (as well as associated ancillary products), diagnostic and interpretive systems, and targeted therapeutics. Last summer, Allscripts and NantHealth executed cross-investments in one another to create a clinical decision support framework that leverages the specific DNA, RNA and proteomic profiles of patients. These will be integrated with evidence-based guidelines provided by NantHealth’s clinical
    pathway, Eviti, as well as the broader clinical patient profile within the Allscripts EMR.
    Additionally, at the JPMorgan Healthcare Conference in January, NantHealth CEO, Patrick Soon-Shiong, announced the addition of Independence Blue Cross in Philadelphia to The National Immunotherapy Coalition (NIC) and his Cancer MoonShot 2020 initiative, representing the first CLIA-certified comprehensive DNA/RNA test with quantitative proteomics to receive insurance coverage in a clinical setting. New research by KellySciPub indicates that the core personalized medicine market will be worth over $60bn by 2019. Separately,
    Flatiron Health, the leading Oncology EMR and data management company, announced a $175mm third round of funding lead by Roche, bringing the company’s total funding to over $300mm since its inception just four years ago. In parallel with the financing round, Flatiron and Roche entered into a multi-year collaboration to accelerate clinical trials, advance personalized medicine and enhance patient care.

Leave a comment