23andMe raising fresh round of cash as company expands drug research

Genetic testing and research firm 23andMe is raising a new round of cash to fund its expansion into drug development and cures for genetic diseases.

The Mountain View-based company has raised nearly $80 million from investors, according to a new regulatory filing. It plans to raise another $71 million, bringing the total financing round to about $151 million.

Including the $80 million round, 23andMe, founded in 2006 by, among others, Anne Wojcicki, the ex-wife of Google co-founder Sergey Brin, has raised more than $190 million from investors including Google Ventures, New Enterprise Associates and MPM Capital.

Although the company is best known for its saliva testing kits that are mailed to consumers’ front door to offer clues about their genetic makeup and ancestral past, novel drug development has long been 23andMe’s mission. The company owns a trove of genetic data — one of the largest databases of personal genetics information in the world — that has been the backbone of large-scale research into crippling genetic diseases, such as Parkinson’s and lupus. In June, the company announced it had genotyped more than one million people.

And 23andMe recently hired Richard Scheller, a former Genentech executive, to become its chief scientist and lead the company’s research and development efforts — the latest indication that the company is dedicating its resources, and very likely a good chunk of the new financing, to novel drug development.

The company, however, is on shaky ground with the regulatory body that has to approve any drugs 23andMe creates and wants to sell. After a protracted battle, the FDA in November 2013 compelled 23andMe to stop offering some of its genetic testing services after regulators questioned the accuracy of the results and warned of the danger of consumers receiving life-changing health information that doesn’t come from a doctor. By that time, 23andMe had collected the DNA of 550,000 customers, and was offering tests on a wide range of genetic disorders. Customers could buy a kit for $99, mail back a vial of saliva and wait for results.

Since then, 23andMe has been working to win FDA clearance for these health tests so that they can be marketed again — the tests, if not the core of the company’s work, are how 23andMe rose to success and became a household name. It scored a small victory in February, when the FDA said the company can sell home tests that will determine if someone is a genetic carrier of the Bloom syndrome, a disease characterized by short stature, low weight, sun-sensitive skin changes, an increased risk of cancer and other health problems. The company will continue working to get approval from the FDA on tests for other diseases, one at a time, so it can resume selling the full DNA testing kit.

Photo: Co-founder and CEO of 23andMe Anne Wojcicki. By Dai Sugano, San Jose Mercury News.

 

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