23andMe raises $79m to help fund drug development
Genetic testing firm 23andMe has raised $79 million out of a target of $150 million in private financing to kickstart its drug development activities.
23andMe built its business by selling personal genetic tests but said earlier this year that it plans to launch a drug discovery and development division, having already signed a string of research partnerships with pharma companies including Pfizer and Genentech.
In March the company recruited former Genentech scientist Richard Scheller as its chief scientific officer, who started a recruitment drive for researchers the following month.
At the time, 23andMe said it intended to tap into its database of genetic information from more than 800,000 people to find new therapeutic targets. Around 80 percent of the individuals in the database are willing to share their information, so it makes sense to explore that resource with experienced pharma partners. Now, the company wants to cut out the middleman and fund its own activities in that area.
The shift into drug development is a logical expansion for 23andMe, particularly after it received an FDA warning letter in 2013 which said the company’s sales of a $99 personal genome sequencing kit without formal approval was contravening regulations.
The US regulator indicated that the company would need approval for each diagnostic element of the kit and as a result the company pulled the genome sequencing product from the US market and started selling it elsewhere – including the UK.
Earlier this year it made a comeback in the US, however, after securing FDA approval of a specific kit for Bloom syndrome and it has an number of other tests for other inherited diseases in the pipeline.
Meanwhile, the FDA has since acknowledged that it may need a new regulatory framework for personalised genome sequencing as its current system – focusing on one kit for one disease – may no longer serve.
California-based 23andMe is supported by Google and Facebook backer Yuri Milner and has raised more than $125 million to date. The identity of the latest investors has not been disclosed and the company has indicated it will not expand on its plans for the new funds until the round completes.
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