23andMe Is Under Fire. Its Founder Remains ‘Optimistic’

23andMe Is Under Fire. Its Founder Remains ‘Optimistic’

23andMe has been a lot of things throughout its history. Founded in 2006, it’s best known as a genetic testing company that provides insights into people’s ancestry and health risks from tubes of spit they send through the mail.

It’s also a data company, having amassed a trove of DNA samples from some 10 million people who have consented to sharing their genetic information for research. And it’s a pharmaceutical company, developing its own drugs based on discoveries gleaned from its genetic datasets. “We are an unusual company,” said CEO Anne Wojcicki on an earnings call on February 7, acknowledging its different business segments.

It is also, right now, a struggling company. 23andMe is facing more than 30 lawsuits after a data breach last year exposed personal information from nearly 7 million customers’ profiles. Valued at $6 billion in 2021 when it went public, 23andMe now risks being delisted from the Nasdaq as its stock continues to trade below $1 a share.

And like many Silicon Valley startups, it’s still working out how to turn a profit. Revenue for the fiscal third quarter was down 33 percent compared with the same period last year—from $67 million to $45 million. Its net loss for the quarter was $278 million, compared to $92 million for the same period the year prior. The company blamed the revenue loss on decreased sales of genetic testing kits and lower research revenue after its five-year exclusive collaboration with pharmaceutical giant GlaxoSmithKline ended in July of last year.

Wojcicki has saved 23andMe from the brink of failure before—notably after the US Food and Drug Administration ordered the company in 2013 to stop marketing its health risk assessments to customers until the business could validate them, which took several years. But a decade later, the challenges are bigger and the solutions less clear: 23andMe needs to rebuild trust after its data breach, convince customers that it is a subscriptions business, and find new investors and industry partners to support its forays into drug development.

Wojcicki, though, believes her company can do it, and sat down with WIRED to explain how she sees 23andMe’s trajectory. This interview has been edited for length and clarity.

WIRED: Ancestry testing was really a booming business for a while, but you’ve said that sales of 23andMe kits dropped off in 2019. What happened?

Anne Wojcicki: That’s a good question. It definitely became a lot more competitive. So I actually think the market grew but it’s just that it became more competitive.

And right before 2019, there was the Golden State Killer case, and there was the Facebook Cambridge Analytica scandal. There were a number of things happening around data privacy. I think that also got people to pause.

It was also a time period where we started to then evolve away from marketing as much around ancestry and focusing more on health. That’s ultimately been more of our vision: How do we get more and more into the health space?

In November, you introduced a new $1,200-a-year service called Total Health. What was the thinking behind that?

We bought Lemonaid Health back in 2021 because we saw that our customers would get genetic information and frankly, weren’t getting good application of this information into their care on a longitudinal basis. You can get a piece of information, like you’re at high risk for [blood] clotting, and the reality is that that information needs to be woven throughout your whole life. It’s not like a point in time. It’s not prenatal counseling where you have one decision to make. These things get woven throughout your life.

We acquired Lemonaid with this idea that we could eventually bring a primary care service that is founded in genomic medicine. So Total Health is our first step really in that. Customers have consults with our clinical team. They get access to blood [tests] and they get exome [sequencing] where they’re really having a comprehensive analysis of their genome. They are looking at blood factors that are often overlooked, and they’re getting a care plan that’s really based on all of their health information, and importantly, their genomic risks.

In the future, I can see this becoming like an integrated service for everybody. Everyone should have genomic health care that’s focused on prevention. I definitely see a future where we are really able to own virtual primary care that is founded in your genetic and your biomarker data.

This is an expensive service that many people probably can’t afford. Who is the target audience?

I’m amazed at how many people have a family history of cancer or they have a family history of heart disease, and they’ve never been tested. So I think this is actually a product for anyone who’s really proactive about their health. I think for the average individual, and even the average individual with concierge medicine, they’re not necessarily thinking about genetics and what are their risk factors.

For instance, I’m at higher risk for type 2 diabetes. I’m 50. I’m really aggressive at managing my sugar levels. You can look at your family history alone, and you can make changes, but the reality I find is that when you have things in your genetics and you can see something in black and white, it really motivates people. In the same way I am constantly reminded and motivated by the various apps on my phones. I think there’s a lot of ways that we’ll be able to get our customers to be motivated to drive change.

It sounds like with this new offering, 23andMe is shifting from a company that just provides genetic tests to a more comprehensive health care company.

I think that’s probably right. That is an accurate assessment. It’s an evolution for the company in terms of just providing access to your genome to now putting the wrapper around it and saying, “We actually want to take care of you. We want to be your partner in prevention.”

If you look at the products, we’ve always engaged people with their genome. You pay for a subscription and we keep updating with new reports. We see the engagement levels. People are engaged. But I think that there are more meaningful things that we could do around that, with respect to saying, like, if I target you, what is it that’s most interesting for you, and then how do I actually make sure that I keep you healthier?

In a world where telemedicine has become normalized, I think that there’s an opportunity for people to stay much more engaged in their health. I think part of the reason why I would argue that people don’t get more into their health is access. So if you can make it easier to access really quality care, then it makes a difference for people.

With the recent data breach, what assurance can you provide to customers that their data will be secure moving forward? Especially customers who are interested in this new service, you will be analyzing even more of their genome, and arguably have even more of their health and genetic data.

I can’t say much because of the litigation, so I’d point you to our blog. We did introduce two-factor authentication pretty quickly and had all of our customers reset their password. We’re 17 years old, data privacy and security has always been a really high priority and remains a high priority for the company and something that we are going to invest even more into.

23andMe is also involved in drug development. What role has your genetic database served toward that goal?

My background was on Wall Street and investing in health care companies. I always felt like one of the things that plagued the industry is that they have small data sets. It was always a question of, how could you potentially build really monster-size, really significantly large data sets. You look at Google and Facebook and these other groups that are global that have huge data sets. But the number one thing that we all really care about is our health. So, how is it that you can build out those types of data sets? I made the conclusion that the only way you are going to be able to do that really is to crowdsource it, which is again why 23andMe went direct to consumer and why we tried to engage consumers to crowdsource all this information.

What’s really exciting is that we can make discoveries that help elucidate human biology. There’s a lot of really exciting ways that we can understand the database and translate those novel discoveries into therapeutics. There were a number of papers that came out that said if you start with human genetics, that you’ll be able to be significantly faster and more likely to be successful with your discovery. We felt like drug discovery is already pretty challenging, but if we can be more successful with our therapeutics, then we can change the curves.

You had an exclusive partnership with GlaxoSmithKline for five years, from 2018 to 2023. How successful was that?

It was overwhelmingly productive. Fifty drug targets came out of it, far more than we expected. They upped it again for one more year, the sixth year, though it’s non-exclusive now. We now have the ability to mine the dataset for ourselves, as well as to partner with other groups. Both the 23andMe and the GSK team felt like there was so much in there, any one group can’t possibly mine everything. It’s a real resource that we could apply to a number of different organizations for their own drug discovery.

Are there particular disease areas that you are really interested in?

We’ve narrowed our own discovery efforts into inflammation immunology, and particularly on asthma. We are also focused on our immuno-oncology programs, but that’s more on the [drug] development side.

Speaking of, you have a drug in a Phase 2 trial, an antibody for solid tumor cancers, and you just announced that you’re starting a Phase 1 trial for a second drug, known as a natural killer cell activator, also for cancer. Did you identify those drugs based on your genetic data?

We did. It’s really exciting seeing genetic data transform into a hypothesis that goes into a drug and actually seeing the impact on patients.

Do you think most 23andMe customers are aware that if they opt in to participating in research they’re also opting in to their data being used by potential pharma partners?

It’s not individual level data, unless they explicitly consented for individual level data. I think that most people want to see improvements in their lives. 23andMe can take it so far. But then we’re going to need to partner with others to really accelerate in a number of different disease areas.

How early on in the company’s history did you start thinking about drug development as a direction that 23andMe might go in?

Drug discovery was always really interesting to me. I just love the space. I think it’s incredibly interesting to be able to understand genetics and then have that apply and help understand and elucidate biology. The original iterations were about us not doing as much ourselves but rather that we would partner it with other pharma companies.

It has been a little more than 20 years now since the Human Genome Project was completed, yet the integration of genetics and genomics into medical care has not been fully realized. Why is that?

The biggest question around genetics is about the cost. In the US health care system, because the employers are paying for most health care and the average time that employees are at a job is three years, then you kind of look at: What’s your three-year investment time horizon, and will it pay off in that timeframe? So, I think it’s a lot about, you know, when does preventative care pay off? I think one of the things that’s a little bit of a sad truth for individuals is that what’s necessarily best for the entire population is not necessarily what’s best for you.

So part of what we tried to do was at least make genetic testing really affordable and easy for individuals so people can get it on their own. And when you find out you’re a carrier—for instance, for BRCA [gene mutations that raise the risk of developing breast cancer]—then you can get into the health care system and you can get in a follow-up care, that’s all covered. We’ve enabled the most controversial part of the process, the testing, to be affordable and easy access for people.

Where does 23andMe go from here?

I think it’s a really exciting time. You have wearables. You have the 21st Century Cures Act, which has mandated access to your medical records. You have large language models. You have a world that is much more accepting of virtual care. I think that there’s going to be incredible advances in health care, and honestly, I’m most interested in how you shift the curve on people. You know, how do you keep people healthier, and can you intervene at sort of a critical juncture in people’s life.

I’m optimistic by nature, but I think that there’s a really incredible opportunity to find people sort of at that inflection point when they need to really intervene and get them to intervene in their health to really change that outcome.

For drug discovery, there are great tools that are coming out, and it reminds me of the late ’90s when you had the invention of combinatorial chemistry libraries and antibody technologies. For me, the future is going to be about integrating all that together and really having more efficient drug discovery. So I’m pretty optimistic about where it can go.


Emily Mullin

Leave a Reply