Big pharma makes a $300m bet on 23andMe

Pharma-giant GlaxoSmithKline invested $300m in 23andMe, a validating win for the company after years of regulatory setbacks.

British pharmaceutical giant GlaxoSmithKline will invest $300m for a stake in the consumer genomics startup 23andMe.

Big pharma makes a $300m bet on 23andMe

The 23andMe-GSK partnership will last 4 years and give both companies an equal slice of the profits.

For 23andMe, the new cash is more than a spit in the test tube — it’s a vote of confidence after the company’s long squabble with the FDA. GSK hopes to use 23andMe’s valuable genetic data to get a leg up on its pharmaceutical foes.

A big win for 23andMe after a bumpy road

In 2013, the FDA banned 23andMe, which offers direct-to-consumer genetic tests, from selling its health-related tests in 2013 after the company failed to prove that its saliva-based tests were clinically valid.

But, the company clawed its way to regulatory approval for health tests by 2017, getting the green light from the FDA to test for 10 different diseases, including Parkinson’s.

Kits are good business, but saliva is even better

Now, 23andMe has developed a strong business by selling its home-testing kits to more than 5m users. But, the company always planned on making its real cash selling spit — and the juicy data within it — to pharmaceutical research companies.

The GSK deal proves that pharma companies, which need patients with particular genetic profiles for clinical trials, will pay top dollar for data. As the world’s largest catalog of genetic data (10x larger than most others), 23andMe can offer prime patients for trials — for a price. 

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