23andMe's Fall From $6 Billion To Nearly $0 (wsj.com) 77
The once-hot DNA-testing company is struggling to profit. From a report: Five years ago, 23andMe was one of the hottest startups in the world. Millions of people were spitting into its test tubes to learn about their ancestry. Oprah had named its kit one of her favorite things; Lizzo dressed up as one for Halloween; Eddie Murphy name-checked the company on "Saturday Night Live." 23andMe went public in 2021 and its valuation briefly topped $6 billion. Forbes anointed Anne Wojcicki, 23andMe's chief executive and a Silicon Valley celebrity, as the "newest self-made billionaire." Now Wojcicki's self-made billions have vanished.
23andMe's valuation has crashed 98% from its peak and Nasdaq has threatened to delist its sub-$1 stock. Wojcicki reduced staff by a quarter last year through three rounds of layoffs and a subsidiary sale. The company has never made a profit and is burning cash so quickly it could run out by 2025. Silicon Valley's fortunes were built on the lofty ambitions of entrepreneurs swinging for the fences -- even if most of them strike out. Wojcicki, for her part, isn't giving up. She's sticking to her goal to transform 23andMe from a supplier of basic ancestry and health data into a comprehensive healthcare company that develops drugs, offers medical care and sells subscription health reports. She still has to prove the business can sustain itself. She's raised about $1.4 billion for 23andMe, and spent roughly 80% of it.
Known for her quirky charm and informal style -- she typically wears workout gear to the office -- Wojcicki, 50, has been searching for fresh capital. But with 23andMe's stock trading at just 74 cents, the company likely can't raise money by selling more shares. And the company's early-stage drug programs are so expensive, she has sought investor partners for some of them, so far unsuccessfully, and given up stakes in others. She could also plug the hole with her own cash. At the center of 23andMe's DNA-testing business are two fundamental challenges. Customers only need to take the test once, and few test-takers get life-altering health results.
23andMe's valuation has crashed 98% from its peak and Nasdaq has threatened to delist its sub-$1 stock. Wojcicki reduced staff by a quarter last year through three rounds of layoffs and a subsidiary sale. The company has never made a profit and is burning cash so quickly it could run out by 2025. Silicon Valley's fortunes were built on the lofty ambitions of entrepreneurs swinging for the fences -- even if most of them strike out. Wojcicki, for her part, isn't giving up. She's sticking to her goal to transform 23andMe from a supplier of basic ancestry and health data into a comprehensive healthcare company that develops drugs, offers medical care and sells subscription health reports. She still has to prove the business can sustain itself. She's raised about $1.4 billion for 23andMe, and spent roughly 80% of it.
Known for her quirky charm and informal style -- she typically wears workout gear to the office -- Wojcicki, 50, has been searching for fresh capital. But with 23andMe's stock trading at just 74 cents, the company likely can't raise money by selling more shares. And the company's early-stage drug programs are so expensive, she has sought investor partners for some of them, so far unsuccessfully, and given up stakes in others. She could also plug the hole with her own cash. At the center of 23andMe's DNA-testing business are two fundamental challenges. Customers only need to take the test once, and few test-takers get life-altering health results.
Countdown to liquidation of DNA database (Score:5, Interesting)
Countdown to liquidation of DNA database after bankruptcy in 3...2...1..
Re:Countdown to liquidation of DNA database (Score:5, Informative)
23andMe is not covered by HIPAA, so it might be legal for them to sell the data.
But who would buy it? Insurance companies are not allowed to consider pre-existing conditions, and even looking at the data might be illegal for them.
One of 23andMe's problems is that their data isn't actually very good at identifying genetic disorders. So even an unscrupulous insurer might see little value in it.
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Health insurers might not be able to but - there are lots of other insurance products where they certainly can and do. Life/key man/supplemental unemployment/auto..
Re:Countdown to liquidation of DNA database (Score:5, Interesting)
Health insurers might not be able to but - there are lots of other insurance products where they certainly can and do. Life/key man/supplemental unemployment/auto..
I think there would be the question of potential privacy violations that could come into play.
Say a sibling of yours submitted their DNA sample; this means it not only includes your parents' DNA, but your own as well. None of you, except your sibliing consented to having that identifying info.
So if they (companies) were to infer your own conditions from what is someone else's DNA (but that also inextricably includes your own) based on info you never consented they have about you, this could become a major sticking point legally.
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Re:Countdown to liquidation of DNA database (Score:4, Informative)
Police definitely like that data.
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As would private companies that do business with the police, and do not operate under the same restrictions regarding warrants and probably cause.
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Ancestry DNA would be a prime candidate to be a buyer. Ancestry's database is several times larger than 23andMe's, and the two companies offer practically identical services, thought Ancestry is focused more on genealogy than health. Still, their DNA tests are compatible with each other, so they might see it as a way to expand their customer base.
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Data brokers will. They will be more than happy to buy up the database because they know they can re-sell it as acces
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The part of HIPAA which 23andMe does not have to comply with is being forced to provide your data to you, which other healthcare providers do have to.
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Re:Countdown to liquidation of DNA database (Score:4, Interesting)
I picture Anne Wojcicki sitting in her office and looking around thinking "Hmmm....must sell something to raise capital. But what?"
"What" indeed.
I told my friends and family not to do this because they couldn't control what happened with the sequencing. Of course I was called paranoid, was told the TOS protected them etc. Now we're about to see how all that worked out for them.
Re:Countdown to liquidation of DNA database (Score:4, Informative)
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Eh, not really. They gave away their parents information but they can't really determine what if any genetic material you share with your sibling. On average, anywhere from 35 to 60 percent is shared but theoretically it could be zero (if only one sibling is a boy) or 100%. But more importantly, there's no way for the company to know.
Now, if the company independently gets your DNA they can then determine who else in their database is likely to be your sibling, but at that point they already have your inf
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They might still know that you have a family history of being very expensive to insure. And they'd know a bunch of statistical information about your genes, which they'd care about almost as much as knowing your genes (since you're just a statistic to them anyway).
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Sadly, perhaps!
"No man is an island entire of itself" etc.
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Well, and you. They effectively gave away your information too if you're related to them
We're not exactly walking git repos, but we sort of are. Like a picture of your sibling is giving away information about your likeness, what's it matter?
I know what we all want, everyone's personal feature branch is private, right? How's that work out? You don't own the entire commit history before you were created, and any pull requests from your branch belong to somebody else. Literally everything outside of your one commit is someone else's already, and after merging isn't even fully yours. Something to
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What is happening with the sequencing that your friends and family will regret? Are they going to be cloned?
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This is a company that runs tests on your DNA looking for various genetic markers. Do you know for a certainty who they are providing that information to?
(23andMe is not required to tell you who exactly they are providing it to, so unless you're upper management in the company the answer to the above question is "no")
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"Do you know for a certainty who they are providing that information to?"
Anyone who shares DNA with you. Typically 1500 people.
23andMe has pulled the most useful features because of hacking concerns. I am not sure what the point is. For finding relatives, the data has to be at least partly public. I don't see what value a list of my 4th cousins would have to anyone. My DNA might well be of interest to insurance companies, but not for long if the current work on life extension works out.
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23andMe has already been caught selling its sequenced data to GlaxoSmithKline. There is no Federal prohibition on companies selling life and disability insurance from using the data in their quotes and pricing. It is clear other industries see the benefit in your and your 4th cousin's data even if you don't (and I believe you're being intentionally obtuse in that regard anyway).
We have here previously demonstrated economic value coupled with a company that is starving for revenue. If you don't see the po
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Countdown to liquidation of DNA database after bankruptcy in 3...2...1..
Wasn't it already hacked? A t least some of it is probably already out there on the dark web somewhere. I did not read the paywalled article, and the summary does not mention it, but I think that one event led a lot of potential customers to take a long hard second thought.
They didn't innovate (Score:5, Insightful)
They had basically the same set of markers for the last ten years.. they should have sponsored more global population studies, things like that. They should have done more extensive sequencing too.
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They had basically the same set of markers for the last ten years.. they should have sponsored more global population studies, things like that. They should have done more extensive sequencing too.
It was also surprising how few DNA samples they have of certain ethnicity groups. 23 and Me said I have about 2% Native American and 1% African ancestry. This is consistent with my grandma's claims their predominantly Spanish family had been in the Americas for hundreds of years. They could pinpoint a pretty precise origin for where in Africa my ancestors came from, but they couldn't say even which continent my Native American ancestors originated. Considering my African heritage was Afro-Mexican, and these
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I have read that if you get tested by several of these companies they will be all over the map as to what your ancestry is.
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With all the arguments about precontact American populations, i'd be cautious about such things myself. It's not one of the more settled questions of the past. The general Clovis concept seems sound to this point but if I were to pick somewhere in the relatively recent past where things could change rapidly with a small number of discoveries, this would be the place. There has been significant consensus movement in my lifetime.
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There's plenty enough evidence of pre-Clovis people on N/S American continents 30-35k years ago, predating Clovis by 20k.
Once enough of the current leading anthropologists die out, you'll see that become the new science.
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Yes, but how much evidence is that that the current AmerInd population is descended from the pre-Clovis population? I'm sure they are, TO SOME DEGREE, but how much?
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None I'm aware of. To my knowledge there are dated artifacts but no dna from ancient pre-Clovis people so it would be impossible to say if they interbred with later arrivals or died out from whatever before Clovis got here.
Side note: I took an anthropological linguistic course in school where dude built his entire career on the idea that Native Americans provably came from some region in Central Asia because of his linguistic theories. Then dna testing became a thing. So hey, decades later, I'd like to s
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I don't understand this need to know. Did this change your life or give you new perspective on how you live?
No judgement, my friends don't get why I like gadets and they like sports. We all have different interests. I am just curious what your was?
They had only 1 sample of Chuck Norris's DNA (Score:2)
There isn't anything that comes close to his DNA in this universe because he personally rearranged the genes.
One and Done [Re:They didn't innovate] (Score:3)
They had basically the same set of markers for the last ten years.. they should have sponsored more global population studies, things like that. They should have done more extensive sequencing too.
Well, if they were spending money faster than they're earning it, where would the funding to do things like that come from? Would this get them more customers? Probably not, most prospective customers won't know why those expenses make the test more useful. So this would be more expenses that wouldn't address the cash flow problem.
The problem is stated: people do the test once, and they're done. Their cash-flow depends on a non-renewable customer base.
Re:They didn't innovate (Score:5, Insightful)
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Biotech is a high-risk/high-reward investment. It either works or it does not. It is not for casual retail investors.
Indeed. Biotech's a biotch.
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They also got people to voluntarily build the database that Theranos was established to do surreptitiously.
Liz Holmes must be so upset.
They never stood a chance.... (Score:4, Funny)
Open for business? It's hard to say (Score:2)
The company I used to work for had it's offices across the street from 23&Me's office building in Sunnyvale. In fact, we watched as it went from a vacant lot to a multi-story building with a parking garage. Up until COVID, the place was busy, the parking building was full of cars, and you could see the offices had people in them. Afterwards, they never came back. I go by occasionally and never see a lot of cars or activity in the building. I assume they still are there but it seems not for long.
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The company I used to work for had it's offices across the street from 23&Me's office building in Sunnyvale. In fact, we watched as it went from a vacant lot to a multi-story building with a parking garage. Up until COVID, the place was busy, the parking building was full of cars, and you could see the offices had people in them. Afterwards, they never came back. I go by occasionally and never see a lot of cars or activity in the building. I assume they still are there but it seems not for long.
If they shifted to a remote-work policy, and (unlike some companies) did not revoke it after the COVID shutdown, that's not surprising.
You signed your rights way (Score:3)
Also, a small correction, Susan Wojcicki is 55 , not 50. https://en.wikipedia.org/wiki/... [wikipedia.org]
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Anne Wojcicki is the CEO, not Susan. Anne is 50.
Grasping at straws (Score:5, Insightful)
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Yes, drug development is a very specific and very capital intensive kind of business. It may look good at the slide deck level to wax poetic about how all that genetic information is going to help you pick the winners. But the reality? Not clear whether it actually helps, even a little.
Also, in most cases, your drug has to work pretty well in the first place, and then you can imagine how genetic information makes it more effective in finding the right patients. But that is a difficult and expensive foll
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My take on this is Wojcicki found herself sitting on a big pile of cheap cash, and went with drug development because it sounded like a good way to make big money because she lacked original ideas of her own. I am not saying that was a definitely bad path. But how exactly is it a good idea for 23andme to play the game?
I don't disagree but I'd put it a little differently and perhaps a little more charitably.
From what I've seen drug candidates emerge when someone discovers a substance that modulates some biological process in a disease that has unsatisfactory treatment options. The key is that all along the path, people know what the clinical problem is and focus on developing a drug that makes treatment work better. From what I can tell neither Wojcicki - despite having done some time in biotech investing early in her car
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Thank you, for the follow up detail.
I think we are on the same page, albeit your level of detail is deeper than mine. But the bottom line is the 23andme core business does not provide any easy path towards making superior choices about which new drug candidates to invest in.
DOA (Score:2)
I never did it (Score:2)
The idea of giving my dna to some shitty valley startup was nuts. And paying for it, too? Jfc, never. None of my friends or wife's relatives who tried it learned a damned thing worth knowing.
The dna database with full PII will be sold to someone who has some nefarious purpose for it and they'll close their doors.
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Ugh, you're right. My stomach hurts now. So depressing.
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Isn't that totally worth it to tell your friends "Hahaha I can tell I'm 2% African"? /s
There are two other major reasons people do it.
First, they misunderstand how useful the disease profiling will be; they think it will help them.
Second, many people input their DNA for genealogy searching: they want to find historical ancestors (e.g. Jamestown colonists) and even living people who they didn't know they were related to. That's what Ancestry.com is all about (another random company).
A third and minor reason is: It's cool to do it: DNA, it's the future! Have you been sequenced yet? Do you even
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No and No (Score:1)
First, I have not used 23andMe or any such service, due to the obvious concerns about a private company holding my genetic information with no real privacy laws in effect.
Second, this new tact: "sells subscription health reports".
More subscriptions can screw off.
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I would never give them a sample.
But imagine a world where you didn't have to worry about malicious use of that kind of data - if we all shared our DNA and medical history, medical science would leap forward as quickly as we could mine the data for correlations.
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If you're worried about the privacy of your DNA, it's already too late. They (government or other researchers) don't need *your* specific DNA to locate and identify you. More than 40 million people have taken DNA tests offered by 23andMe, Ancestry DNA, Family Tree DNA, and others. You are almost certainly related to at least a few of those 40 million people. Typical match lists for each test taker is in the hundreds.
Police were able to locate and identify the Golden State Killer through one of these DNA sit
Maybe a bad idea is just that (Score:2)
Namely a bad idea. This service served nothing but personal vanity and, obviously, law enforcement.
sales? (Score:2)
Their revenue has actually been going up, so their downfall appears to be the inability to make a profit, and that is probably just management failure.
Regulations on reports.. (Score:2)
SNPedia and Promethease are what 23andme intended.
Take your raw data and run it there, then get relevant data from the entire database of medical knowledge.
The problem is the medical establishment prohibits them from giving you this information, as they want to gatekeep it.
This gave me very valuable information for estate planning and and edge on actuarial models for buying annuities.
Take advantage while you can.
Chinese will buy it (Score:2)
If they haven't already stolen all the data.
Late stage capitalism suffers another minor implos (Score:2)
I love how casually TFA Summary throws out the fscts that this company is NASDAQ listed, had a $6b market cap, and *never turned a profit*. It's vultures all the way down / up.
The next Elizabeth Holmes! (Score:2)
Fake it until you make it.
How can you burn through all these billions so fast?