Hello profits. Did anyone honestly think 23andMe was going to stick to selling $100 DNA kits? The company is still in regulatory talks with the FDA, but in the meantime has found a sustainable business model. 23andMe announced a $60 million deal with Genentech to provide aggregate genetic data for Parkinson’s research.

On the surface, you may have the reaction of: ‘I can’t believe they are selling medical data.’ That’s understandable, but think of it like this. 23andMe is a small company, backed by Yuri Milner and Google Ventures. All that data would be sitting in storage if they don’t deal or open it up for scientific research – the latter of which costs.

It makes sense to get other biopharma companies involved. Plus, it makes good business sense. The Genentech deal is the first of ten deals the company has signed. The $60 million breaks down as a $10 million upfront fee, and $5 million at various project milestones.

23andMe customers sign a consent form for releasing data to a third party. According to Anne Wojcicki, co-founder of 23andMe, around 90-95% of customers sign this release. Yes, it is true the marketing on the product does not spell this out, but what marketing ever spells out the exact nature of a business plan?

For the Genentech deal, 23andMe has said that consumers would have to sign an additional consent form. Contact information is not a part of the deal, and will be stored on a separate server.

So, it boils down to ethics. 23andMe assures the public it keeps identifying consumer details private, and each research proposal goes through an independent review board. Are they making money off your genetic data? Absolutely. If big data bothers you in the digital age, you should become Amish. The second you turn on anything, data is being generated.

23andMe found a business model that will make a mountain of cash. If it turns out that genetic data creates new drug therapies, then sign me up for a swab.


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