Silicon Valley was right to invest in DNA: Facebook and Google-backed personal genetics business strikes $10m deal with Genentech
Facebook and Google will be pleased about their decision to invest in personal genetics business 23andMe.
The firm, which sells DNA testing kits to individual customers for $99 (£65) each, has secured a major deal with Genentech – a subsidiary of Roche.
According to Forbes, 23andMe is receiving an upfront payment from Genentech of $10m, with further payments of as much as $50m to follow.
The biotech firm was attracted to 23andMe because of the access the deal will provide to a whole wealth of personal DNA data: nearly all of 23andMe's 800,000 customers agreed to have their sequenced genome donated for third party research.
In the case of Genentech, the data will be used to study Parkinson's disease – a hereditary disorder which causes the central nervous system to stop working properly. 12,000 Parkinson's patients and 1,300 of their family members have signed up to 23andMe.
ATTRACTING DEALS ACROSS THE SECTOR
Genetech is not the only firm to have a keen interest in the DNA database – 23andMe has signed nine other deals with large biotech and pharmaceutical companies. In fact, the company has been collaborating with businesses in the sector since it was founded in 2006.
Last year, it signed a contract with American giant Pfizer to enroll over 10,000 bowel disorder patients. These people will help Pfizer study the genetic causes of diseases such as colitis or Crohn’s disease.
“I think that this illustrates how pharma companies are interested in the fact that we have a massive amount of information,” 23andMe's co-founder and chief executive Anne Wojcicki told Forbes.
“We have a very engaged consumer population, and these people want to participate in research. And we can do things much faster and more efficiently than any other research means in the world.”
From 23andMe's point of view, the revenue brought in by these major deals is much higher than the payments received from customers who buy the personal DNA testing kits. Just one of these deals can bring in twice as much money as all of the business's customer base.