23andMe: Will the Wojcicki Empire Rise from the Ashes?
Growing up in Silicon Valley, Sergey Brin was a legend. Larry Page, the other co-founder of Google, was the nice guy and prototypical engineer, but the diminutive Brin provided the sizzle and sass along with prodigious intellect. Together, the boys from Stanford who rented Susan Wojcicki’s Palo Alto garage were unstoppable.
Susan’s sister Anne later married Sergey had two children, Wojin and Benji. Anne also founded 23andMe, and I still remember eagerly opening their large box, spitting into a small tube, sending it back, and being fascinated with the mostly wrong ethnicity results and mostly right health traits. Back then, the best Christmas present every adult wanted was a 23andMe test kit.
Today, Sergey and Anne are divorced, 23andMe shares recently did a reverse stock split, and competitor AncestryDNA® is offering deep discounts at a time 23andMe has never been lower. I like both underdogs and Shakespearean tragedies, so I emailed 23andMe and asked a few questions. Due to Regulation FD—which we never mentioned—23andMe, a public company, is limited in its responses. Regardless of the current stock price, it’s a good sign that they responded to an independent journalist and complied with appropriate laws.
All information below is from a 23andMe spokesperson and was done exclusively over Gmail.
23andMe’s Co-Founder and CEO Anne Wojcicki has publicly shared she intends to take the company private, and is not open to considering third party takeover proposals. Anne also expressed her strong commitment to customer privacy, and pledged to maintain our current privacy policy, including following the intended completion of the acquisition she is pursuing.
Beyond Anne’s pledge to maintain current privacy policy, we note that for any company that handles consumer information, including the type of data we collect, there are applicable data protections set out in law that would be required to be followed as part of any company’s decision to transfer data as part of a sale or restructuring. Our own commitment to apply the terms of our Privacy Policy to the Personal Information of our customers in the event of a sale or transfer is clear: “This privacy statement will apply to your personal information as transferred to the new entity.”
We have strong customer privacy protections in place. 23andMe does not share customer data with third parties without customers’ consent, and our Research program is opt-in, requiring customers to go through a separate, informed consent process before joining. Further, 23andMe Research is overseen by an outside Institutional Review Board, ensuring we meet the high ethical standards for the research we conduct. Roughly 80% of 23andMe customers consent to participate in our research program, which has generated more than 270 peer reviewed publications uncovering hundreds of new genetic insights into disease.
In addition to our own strict privacy and security protocols, 23andMe is subject to state and federal consumer privacy and genetic privacy laws that, while similar to HIPAA, offer a more appropriate framework to protect our data than privacy and security program requirements in HIPAA. Although state privacy law protections apply to residents of certain states, 23andMe took the opportunity to make improvements for all 23andMe customers globally.
We believe we have a transparent model for the data we handle, rather than the HIPAA model employed by the traditional health care industry that allows broad exemptions and often unrestricted use and disclosure of protected health information (PHI) when used for treatment, payment and operations purposes, and where consent, opt-out and opt-in concepts are generally not imposed.
We are committed to protecting customer data and are consistently focused on maintaining the privacy of our customers. That will not change.
I also wanted to just provide you with some context on 23andMe's approach to data privacy and sharing, so you have a better understanding.
As a Health- and Research-focused company, the privacy of our customers has been top of mind and core to our product from the founding of 23andMe. We comply with all applicable laws regarding customers’ information. We believe customers own their personal information and should be in the driver’s seat throughout their genetic journey -- this means providing transparency all along the way so they can decide if they want to share their data, and if so how that data is shared.
Informed consent is a central component to 23andMe’s Research program. That is why we have a separate research consent, beyond our terms of service, that customers must review and agree to if they want to participate in our Research program. This consent document is subject to the review and oversight of our external and independent Institutional Review Board (IRB), which ensures that the risks and benefits of participation in research are properly presented to the potential participant so that they can make an informed decision about participation. More than 80% of our customers choose to participate in our Research program, a figure that’s been remarkably consistent since the launch of the program over a decade ago. If a customer originally opted-in to participate in our Research program, they can easily withdraw at any time.
23andMe will not sell, lease or rent customers’ individual-level information to any third party or to a third party for research purposes without their explicit consent. We will not provide any person's data (genetic or non-genetic) to an insurance company or employer. We treat law enforcement inquiries, such as a valid subpoena or court order with the utmost seriousness. We use all legal measures to resist any and all requests in order to protect our customer's privacy. To date, we have successfully challenged these requests and have not released any information to law enforcement. In 2015, we were the first consumer genetics company to publish a transparency report, which details the government requests for data we receive and how we have responded.
With regard to our collaborations on the research platform, please see below statements our CEO and Co-Founder Anne Wojcicki made in our recent FY25 Q2 earnings call:
"... we will continue to leverage 23andMe’s unmatched genetic community with over 15 million customers to pursue collaborations with pharmaceutical and biotech companies as part of our mission to help people benefit from the human genome. These collaborations run across several areas, including drug target discovery and validation, clinical trial recruitment efforts, and disease awareness, among others.
23andMe Therapeutics was established to improve people’s health by harnessing the power of human germline genetic data at scale. Over the past nine years, we have taken major steps forward, leveraging the 23andMe database to identify a large number of potential therapeutic targets, and to develop unique and valuable insights. We have engaged in a highly productive six-year collaboration with a major pharmaceutical collaborator, GSK, and have advanced two in-house immuno-oncology assets into the clinic with positive results. We are proud of the work we’ve done and look forward to advancing it further with collaborative efforts…”
“[Indeed] we are discontinuing our own 23andMe Therapeutics division that was focused on drug discovery and development, but we are still exploring strategic collaborations with others in the therapeutics and biotech industry, similar to the deal we just announced with Mirador Therapeutics.”
Best of luck to Anne and company.
© Matthew Rafat (November 22, 2024)
Disclosures: I currently own 23andMe (ME) shares, but my positions may change at any time. Nothing herein is investment advice. You are responsible for your own due diligence.
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