Decoding DNA: 23andMe is ready for its next step

Anne Wojcicki is 45 minutes late, something so encoded in her habits as 23andMe’s CEO that employees have stopped complaining about it. On a Thursday morning in April, her team is waiting patiently as she swirls into the company’s headquarters wearing running shorts, a T-shirt that says “Yay DNA” and worn tennis shoes, having just pedalled the 5 miles to work while eight months pregnant.

Reflecting Wojcicki’s passions, 23andMe’s headquarters, in Mountain View, California, looks like a cross between a Silicon Valley startup and a fitness club. There are treadmill desks throughout the open-plan office, elliptical machines in conference rooms and Peloton bikes in the cafeteria, which connects directly to a gym. Wojcicki is still practically bouncing after climbing the four flights to her small glass-walled office. She makes sure her employees know that their well-being is their own daily choice. “I’m like, ‘I take the stairs and I’m pregnant! You can take the stairs!’” Wojcicki says.

Such a workout would be a lot for most expecting moms, but Wojcicki, 45, who has two children with her ex-husband, Google co-founder Sergey Brin, isn’t even breathing hard. And she is still energised about what she refers to as her “first child”: Her 13-year-old business, 23andMe. Since its launch, around 10 million people have spit a half-teaspoon of saliva into a 23andMe plastic tube and mailed it in to get their ancestry or health-risk results. Nearly 5 million customers did so last year alone, generating an estimated $475 million in revenue for the company, which has yet to turn a profit. It’s also made Wojcicki (No 33 on the list of Richest Self-Made Women) worth an estimated $690 million, almost entirely from her roughly 30 percent stake in 23andMe, which is valued at $2.5 billion by ­investors.

To get this far, Wojcicki weathered an annus horribilis that threatened to end it all—her separation from Brin in 2013 came at the same time the Food & Drug Administration (FDA) forced 23andMe to cease health-test sales—and has faced sceptics who viewed her company as little more than a parlour trick.

Now that she has proved that 23andMe is a serious company, Wojcicki finds herself at a turning point once again, both personally and in her business. She’s been quietly preparing to welcome her third child—this time as a single parent. “Whether you’re in a relationship or not should not dictate whether or not you have the ability to have children,” Wojcicki says. “I’m very stubborn. When there’s something I want to do, I get it done. I really wanted a third child. So like, guess what? I executed,” she adds with a laugh.

And while it might make interesting cocktail conversation to reveal that you are 5 percent Scandinavian and have a genetic disposition to sneeze in the sun, 23andMe’s ambitions are much grander. Wojcicki wants to leverage the exponentially plunging costs of genetic sequencing (down 99 percent in a decade) and 23andMe’s massive DNA library (the world’s largest genetic research database) to fuel a “biotech machine” that will not just indicate genetic predispositions to certain diseases but also help create the drugs that will treat those diseases. Customers pay to find out about their heritage and then the company uses that genetic data to one day profit from potential new medicines. Eighty percent of 23andMe’s customers consent to allow their DNA to be used for biomedical research.

“I thought it was genius actually, that people were paying us to build the database,” says Richard Scheller, 23andMe’s chief scientist. “People want their data to be used and to help scientific discoveries.”

23andMe’s latest chapter started with an in-house drug discovery group in 2015. But pharma development is notoriously hard—86 percent of new drugs fail in clinical trials—and expensive. The average cost of developing a medicine in the US is about $2.6 billion. So, in July last year, Wojcicki inked a deal with UK-based giant GSK (formerly called GlaxoSmithKline; 2018 sales: $31 billion), which invested $300 million in 23andMe and signed a four-year exclusive partnership to identify new drug targets. 23andMe will have to share drug-development costs, but it will also share in any profits.

Another potential growth area for 23andMe is a deeper and more personalised approach to health. Wojcicki wants to coach consumers based on their genes, giving them greater control over their health. That could mean more partnerships like the one it has with fellow Mountain View startup Lark Health, which lets 23andMe customers sign up for diabetes counselling. Or it could mean that 23andMe’s own AI-powered app will remind you to drink more water or to choose a lunch entrée with tomatoes, which some research touts as helping to deter the onset of Parkinson’s.

It won’t be an easy task. There’s no clinical evidence that people who’ve learnt through genetic testing that they have a high genetic risk for a specific disease dramatically change their lifestyle to lower that risk. Or change their lifestyle at all. 

But it’s a gamble she’s willing to take. “The medical world has kind of given up on your potential to ever be healthier,” she says. “That’s really sad.”

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Wojcicki herself was almost forced to give up six years ago. In November 2013, she was busy adapting to a rapidly evolving life. Her husband had reportedly moved out. She was mother to two young children and still the CEO of a startup. Then, days before Thanksgiving, her phone buzzed with a text: A courier from the FDA had a package for her. “Don’t sign for it!” Wojcicki fired back to her assistant.

It was too late. The FDA notice ordered her company to immediately stop marketing its health tests because it had failed to provide enough evidence that they were accurate. Wojcicki thought she could brush it off. Three days later, the FDA made its warning letter public, and 23andMe had to take its health tests off the shelf.

Many were quick to identify it as another tale of Silicon Valley hubris, not surprising given Wojcicki’s deep roots in the area. She had grown up on the Stanford University campus, where her father, Stanley, was a physics professor. Wojcicki’s mother, Esther, taught journalism at a high school in Palo Alto. While her sisters gravitated toward art and math, Wojcicki was nerdy but social. “She could charm the pants off of anybody,” her mother recalled.

Among those to fall for her charms was Sergey Brin (and much later, baseball player Alex Rodriguez), whom she met after her oldest sister, Susan, rented out the garage of her Menlo Park home in 1998 to Google co-founders Larry Page and Brin. Susan became Google’s 16th employee and eventually the CEO of YouTube. The middle Wojcicki sister, Janet, is now a globe-trotting epidemiologist who teaches at the University of California, San Francisco.

Wojcicki first got fired up to battle the health care system as a young Yale University graduate working as an analyst at a small firm on Wall Street. Days spent at medical-billing conferences and nights volunteering at Manhattan’s Bellevue Hospital drove home how focussed the medical industry was on maximising profits—and not on preventive care.

“It was so unacceptable to her as a compassionate human,” says Ashley Dombkowski, who served as 23andMe’s chief business officer before co-founding Before Brands, an anti-allergy baby-food company Wojcicki backed. “She is undeterred by massive, worthwhile problems.”

The human genome was first sequenced in 2003, and scientists were entranced with what the code could unlock. Wojcicki got introduced to Linda Avey, who had studied biology as an undergraduate and was creating research programmes at Affymetrix, a gene-testing company in Santa Clara, California. The two began brainstorming over dinner in December 2005. Soon after, Wojcicki and Avey decided to start a company together, and Avey recruited her former boss Paul Cusenza to be 23andMe’s third founder and its operations lead. “I was blown away, because I saw what immediately the implications of that were,” Avey says. The Brin connection didn’t hurt. “Google support would be pretty much clinched.” (Avey left 23andMe in 2009 to work on Alzheimer’s.)

Google did come through. After raising $9 million from Google, Brin and a few outside investors like New Enterprise Associates and Genentech, 23andMe launched its first product in November 2007. The spit test cost $999. Customers learnt about their ancestry, their likelihood of going bald and their risk for some common health conditions like heart disease. The company skirted FDA regulations by advertising itself as a fun way for people to get insight into their DNA, rather than as a medical tool.

At the time, it cost about $300,000 to sequence an entire human genome, down from a whopping $50 million in 2003. (It now costs less than $1,000.) But 23andMe generated reports for much less by using a technology called genotyping, which spot-checks specific parts of a gene for mutations known to be linked to certain diseases, instead of sequencing, which entails reading the entire gene.

To drum up publicity, 23andMe held spit-test parties at events from Davos to New York Fashion Week, where celebrities like Naomi Campbell, Diane von Furstenberg and Rupert Murdoch spit into little tubes. By 2011, four years after its launch, 23andMe had amassed only 100,000 customers. It seemed to be nothing more than the hobby of a billionaire’s wife.

In 2012, exponentially declining costs allowed 23andMe to drop its price to $99, sparking an uptick in sales. Wojcicki was ready to go bigger. “We wanted to get the technology quickly into the hands of individuals,” she says. By October 2013, 23andMe was in talks with Target and Wojcicki was pushing hard to enter stores before the holidays, a move that would have put the testing kit in the aisles alongside vitamins and thermometers. 23andMe’s head of business development, Emily Drabant Conley, recalls Wojcicki’s certainty when an exec thought it was impossible to meet the time line: “Anne was like, ‘This is a company that was founded on impossible’.”

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But in the end, impossible won. It would take three more years for 23andMe to get onto Target’s shelves. First she had to overcome the public censure of the 2013 FDA order and rebuild. Genetic tests have emerged as one of the defining social trends of the decade, revealing unexpected family members (Wojcicki found a previously unknown cousin) and even helping to solve cold-case murders like those of the so-called Golden State Killer, who was arrested after a relative submitted DNA to GEDmatch, a free genealogy database.

 “We have our days where, you know, Prime Day—we sell a couple hundred thousand kits in a day,” says Wojcicki, referring to Amazon’s discounted shopping day. (23andMe sells its tests on its own website as well as through retailers like Amazon, Best Buy and Walgreens. Soon Wojcicki plans to open the first 23andMe pop-up retail store in a shopping mall near its headquarters.) “I have my moments where I’m like, an entire city is going to be impacted.”

Wojcicki compares the fight with the FDA to walking around “a Japanese house with our shoes on”. “It doesn’t matter if you believe you’re right or wrong. You’re wrong,” she says. “So we had to start over.”

One way out would’ve been to require a doctor’s approval as part of the health test-ordering process, the approach that 23andMe’s competitors, Silicon Valley startups Color and Helix, have so far taken. But Wojcicki stood by her original idea of a kit that could be sold directly to consumers.
In February 2015, the FDA approved a carrier status report on a rare disorder called Bloom syndrome (something Wojcicki carries herself). After proving to the FDA that its tests were accurate and easy to understand, 23andMe became the only genetics testing company with FDA clearance to sell genetic health reports directly to consumers. Its Utah-based competitor, Ancestry, which has sold nearly 15 million DNA kits, doesn’t offer any health-related tests.

Also in 2015, 23andMe started signing deals with pharmaceutical companies eager to dig into its genetics trove, starting with multimillion-dollar deals with Genentech and Pfizer. While they were happy to sell anonymised data (from customers who opted in) to outsiders, Wojcicki was also building out an in-house drug-research group and tapping into a new revenue source: Recruiting thousands of patients from 23andMe’s database for pharmaceutical firms’ clinical trials.

Wojcicki’s next big breakthrough came in 2017. Oprah named its $99 ancestry kit one of her “favourite things”. Then the FDA cleared 23andMe’s first health-risk report, which could tell customers whether they have genetic variants linked with an increased risk for a blood clot condition or Parkinson’s.

But the didn’t squelch the medical community’s doubts. In fact, the fine print on its $199 health kits says they are “not intended to tell you anything about your current state of health, or to be used to make medical decisions”. Unlike a pregnancy test, the company’s reports aren’t permitted to deliver any definitive diagnoses.

Instead, 23andMe’s carrier reports test for whether someone could pass variants for genetically inherited diseases like hearing loss or cystic fibrosis to their offspring. Its 12 health-risk reports tell people whether they may be at an increased risk for hereditary high cholesterol or late-onset Alzheimer’s. They are limited in many ways. Since most genetic research to date has been done on Europeans, the risk reports rarely apply to African-Americans or Asians.

“No self-respecting doctor who has malpractice insurance is going to treat you based on your interpretation of a direct-to-consumer test,” says Mark Rothstein, a bioethics professor at the University of Louisville.

Perhaps the most controversial 23andMe test is one that searches for three variants linked to breast, ovarian and prostate cancer in what’s commonly called the Angelina Jolie gene, BRCA1, and a related gene, BRCA2. Critics say the problem is that there are more than 1,000 variants linked to breast cancer, so searching for just three variants fails to present the full risk profile. To top it off, the three variants that 23andMe scans for are typically found in people of Ashkenazi Jewish descent, just 2 percent of the US population. For most people it’s irrelevant.

“Effectively what you have is a technology that is neither that helpful [nor] that harmful, and so on the whole should we really be encouraging people to spend $200 on it, or should they spend $200 on a gym membership?” asks Dr Jonathan Berg, a clinical geneticist at the University of North Carolina at Chapel Hill.

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Fitness fanatic Wojcicki would undoubtedly tell people to both test and go to the gym, but to shore up the test side of the equation she signed the company’s largest-ever deal with GSK, giving it access to 23andMe’s genetic database, which contains the DNA of an estimated eight million people.

 “The size of the data set can reveal lots of signals other data sets that are much smaller would never be able to show,” says Hal Barron, GSK’s chief scientific officer. In ten months GSK and 23andMe have reviewed at least 13 genetic variants that could be targets for diseases ranging from cardiovascular to neurological. The first they will examine as a drug candidate is a mutation linked to Parkinson’s disease.

Wojcicki is looking for growth by shifting from giving tests to giving advice. It’s an obvious move, but there are a host of competitors, from smoking-cessation apps to diet- and exercise-tracking tools by everyone from Under Armour to Apple.

The jury is out on whether any of these fitness and health apps can make a difference, or whether 23andMe has any meaningful advantage over the other players. A genetic test only provides personalised information. People still have to change their behaviour. And a raft of scientific studies suggests that just giving them warnings won’t do the trick.

“It’s much easier to quantify the impact of drugs. It’s a much harder problem to quantify the impact of prevention. But I think that’s where mentally I’ll probably be more proud,” Wojcicki says. “Because, right now, no one thinks you can do it.”

“I’m really not a believer in the Silicon Valley world of, like, you should live forever,” Wojcicki continues. “But I’m a really big believer that you want to die in your 90s or 100s—and you just want to be healthy.”