There Be Gold in Them Thar Genes
We were shocked — shocked — to learn that 23andMe is cashing in on its customers’ spit. $3.5 billion, the company is worth, they say, now that it’s going public. That is an awful lot of $99 gene tests! Except that the business model is not, and never has been, about cash flow from individual customers. No, the big money is in leasing out genetic data to pharmaceutical companies and other researchers.
Forgive us, just this once: We told you so, years ago.
In July 2007, shortly after the company’s debut, then–CGS staffer Osagie K. Obasogie (who is now a CGS Senior Fellow and a Distinguished Professor at UC Berkeley) got the ball rolling with a blog post titled Googling Your Genes?:
It seems likely that what Google did to the internet — making previously disperse and obscure information widely available to the public — is what 23andme might want to do with genetic information, both mine and yours. (Those who are less than satisfied with Google’s privacy practices might find this prospect a bit unsettling.)
Others noticed too. Also in 2007, then–CGS staffer Jesse Reynolds (now an Emmett/Frankel Fellow in Environmental Law and Policy at UCLA School of Law) commented on an article by David Hamilton at VentureBeat, titled “Will 23andMe and Navigenics lock up your genome and charge you for the key?” Not exactly — Navigenics was merged out of sight in 2012–14, and the real money wouldn’t come from “you” — but the line of thinking was in the right direction.
In 2008, Jesse wrote Genomes of the Rich and Famous, in which he quoted the ETC Group:
[T]he information gleaned from most genetic tests has very limited use for patients, but it is extremely valuable to companies and researchers trying to establish links between medical conditions and genetic variations
This was followed by CGS co-founder and now executive director Marcy Darnovsky writing The Gullible Gene and More on Personal Genomics, and Medical Records Meet Personal Genomics and her pièce de résistance:
Pete Shanks — always a slow learner — finally got into the act in 2009 with a post on Genotyping Children:
An important part of 23andMe's business model is the collection of genotypic and phenotypic data which can be sold on to researchers. It’s easy to see the value of multi-generational data, but is it necessarily in the interests of the child?
Along with increasing numbers of other cynics, we really did spot this one coming.
When the whole financial move is done, 23andMe will have $900 million in cash. Co-founder and CEO Anne Wojcicki is kicking in a token $25 million of her fortune (estimated at $800 million), as is the Virgin Group’s Richard Branson (he’s got $6 billion). This latest windfall is on top of the $82.5 million the company raised in November, on top of $300 million in 2018 and about $250 million in 2017.
But then Ancestry DNA is worth $4.7 billion, or so someone thinks.