The goal of the collaboration is to gather insights and discover novel drug targets driving disease progression and develop therapies for serious unmet medical needs based on those discoveries.
UK-headquartered Big Pharma company GlaxoSmithKline (GSK) has invested $300 million (£228 million) for an equity stake in direct-to-consumer DNA testing company 23andMe. The official GSK press release describes the investment as a "multi-year collaboration expected to identify novel drug targets, tackle new subsets of disease and enable rapid progression of clinical programmes."
The GSK press release highlights three primary goals of the collaboration; quoting:
- Improve target selection to allow safer, more effective "precision" medicines to be discovered. Genetic data can significantly improve our understanding of diseases, their pathways and mechanisms, supporting the design and development of more targeted medicines. Use of genetic data in selecting drug targets can increase both the probability of success in a particular indication and avoid unwanted safety risks.
- Support identification of patient subgroups that are more likely to respond to targeted treatments. Scale is critical for the detection of genetic effects in smaller subsets of diseases and patients. With over 80% of 23andMe's customer base consenting to participate in research, their aggregate and de-identified data could help enable the discovery of a significant number of novel associations from a diverse range of people, which would not otherwise be possible.
- Allow more effective identification and recruitment of patients for clinical studies. The ability to identify and invite patients with a particular disease, and in some case specific genetic subgroups, to participate in studies that are relevant to them could significantly shorten recruitment and reduce clinical development timelines, allowing medicines to be delivered to patients more efficiently.
The four-year collaboration agreement gets top-billing in information released by both 23andMe and GlaxoSmithKline, but a not insignificant element of the arrangement is the $300 million equity stake in the DNA testing company that GSK is purchasing. That healthy outlay is described only by this short sentence: "Additionally, GSK has made a $300M equity investment in 23andMe."
The announcement came today in conjunction with GSK's second-quarter earnings results. The information didn't—at least not immediately—sway investors favorably. The FTSE closed its trading day with GSK down 14.4 points, or 0.92%.
However, the 23andMe hard-currency investment is in reality but a blip on GSK's radar. Their Q2 results reported slightly weaker growth than expected, with group sales in aggregate rising 4%. The weakest of the sectors was pharmaceuticals, showing 1% growth, compared to 3% in healthcare and 16% in vaccines. Included in the report was an announcement of plans to spend $2.24 billion over the next three years to reduce overhead costs in supply chain and administration by $527 million.
Spearheading the 23andMe arrangement for GSK was Dr. Hal Barron, Chief Scientific Officer and President of R&D. Dr. Barron is a recent acquisition by GSK, having stepped into the role just last March. Dr. Barron received his medical degree from Yale and has a B.S. in engineering physics from Washington University.
GSK's CEO is also relatively new to the company. The just-turned 49-year-old Emma Walmsley (daughter of Vice-Admiral Sir Robert Walmsley and Lady Christina Walmsley, née Melvill), has had a rapid rise at GSK since joining the company in 2010. In April 2017 she took over as CEO after the retirement of Sir Andrew Witty, an event that some observers viewed less as an expected transition than a shake-up. This made the capable Walmsley the first woman ever to run a major pharmaceutical company.
That both GSK and 23andMe have strong women at at the helm might be less of a precursor to this new collaboration than one other associative tidbit. Prior to joining GSK, Dr. Barron was president of research and development at Calico, a biotech firm founded September 2013 by Bill Maris. Maris is the founder and first CEO of Google Ventures, and Calico is a Google Ventures-funded enterprise. In 2015, Google restructured itself into Alphabet Inc., and Calico—along with Google itself and several other properties—became a subsidiary of the new corporation.
In August 2016 Google, as Alphabet Inc., invested $715 million over a seven-year period with GlaxoSmithKline to form a new biotechnology company called Galvani Bioelectronics. The new enterprise ownership is 55 percent owned by GSK and 45 by percent Google.
Prior to Calico, Dr. Barron had worked for 17 years at a company called Genentech, a biotechnology corporation that was acquired by Roche in 2009. Dr. Barron served as executive vice president from 2008 through his departure for Calico. You're with me so far, right?
The genomics and biotechnology company that we typically think of as one of our major genetic genealogy industry players, 23andMe, is privately held and headquartered in Mountain View, California. It was founded in 2006 by Linda Avey, Paul Cusenza, and current CEO Anne Wojcicki. In 2007, Google invested $3.9 million in 23andMe and Genentech. At that time, Wojcicki was married to Google co-founder Sergey Brin. Cusenza left the company shortly after, and Avey left in 2009.
In 2012, 23andMe raised $50 million via a Series D venture offering, which almost doubled its existing capital. Three years later, in 2013, they raised an additional $115 million. As of September 2017 the company had raised a total of $230 million since it was founded. Shortly after, it was rumored (again, it's a privately held corporation so we don't see everything publicly) that it had raised another $250 million.
From what we know, this $300 million equity investment by GSK—and we don't yet know how much ownership in 23andMe GSK is buying with it—is the largest single cash infusion 23andMe has ever had. It may be a relative rounding error when looking at GSK's annual report, but it is undeniably and hugely significant to 23andMe.
Commenting shortly after the GSK press release, 23andMe CEO and co-founder, Anne Wojcicki took to the 23andMe blog and wrote, in part:
This collaboration will enable us to deliver on what many customers have been asking for—cures or treatments for diseases. By leveraging the genetic and phenotypic information provided by consenting 23andMe customers and combining it with GSK’s incredible expertise and resources in drug discovery, we believe we can more quickly make treating and curing diseases a reality.
—Anne Wojcicki, CEO of 23andMe
No doubt many interests on the consumer side concerning this news will gravitate toward privacy issues. You'll also remember that, earlier this year and for a limited time, 23andMe allowed people who had purchased tests elsewhere to create an account and upload their raw data for free, so the company likely garnered a substantial number of accounts not tested at 23andMe and new to their privacy policies and opt-in statements.
In her blog post, Anne Wojcicki said: "Our top priority is our customer, and empowering each individual with the options to participate in research. As always, customers choose whether or not to participate in research. Customers can choose to opt-in or opt-out at any time."
GlaxoSmithKline, in today's press release, wrote:
23andMe customers are in control of their data. Participating in 23andMe's research is always voluntary and requires customers to affirmatively consent to participate. For those who do consent, their information will be de-identified, so no individual will be identifiable to GSK.
The continued protection of customers' data and privacy is the highest priority for both GSK and 23andMe. Both companies have stringent security protections in place when it comes to collecting, storing and transferring information about research participants. 23andMe employs software, hardware and physical security measures to protect the computers where data is stored and information will only be transferred using encryption to offer maximum security.
There undoubtedly will be some renewed conspiracy theories from the usual suspects, but the truth is that use of our raw autosomal DNA data at 23andMe will almost certainly have been no different yesterday than it will be tomorrow. Customers will have control over whether GlaxoSmithKline will be able to see their data or not. According to 23andMe, over 80% of their customer base consents to data sharing for research purposes. Clearly, only a minority feel there is risk in allowing researchers to see an anonymized 0.023% of their genomes.See also:
- GlaxoSmithKline 25 July 2018 press release
- GlaxoSmithKline corporate website
- 23andMe website
- 23andMeBlog, "A Note On 23andMe's New Collaboration with GSK"
- Counting Chromosomes blog, "Ancestry.com Files Motion to Dismiss Lawsuit by 23andMe," 6 July 2018