Adonis Diaries

Not Even the Feds Could Stop it: Company set out to change the genetics game

By filling a plastic vial with saliva and mailing it to 23andMe, customers could decode the DNA embedded in their 23 chromosomes

Not long ago, 23andMe founder Anne Wojcicki was watching her daughter compete in a swim meet near their home in Palo Alto, California, when she realized her mother, Esther, whom she’d expected to see there, was nowhere in the crowd. Worried, she phoned. “Mom, why aren’t you at the swim meet?” she demanded. “I’m in Amsterdam,” her mother crowed. “They want me to change education!”

The Billion-Dollar Company That Not Even the Feds Could Stop

Anne Wojcicki set out to change the genetics game, until the FDA got in the way.

inc.com

Wojcicki tells this story to explain something most people don’t typically grasp. Yes, until a few months ago, she was married to Sergey Brin, co-founder of Google and one of the icons of Silicon Valley. But when it comes to locating the wellspring of her entrepreneurial drive, her ex comes in a distant second to the woman known to generations of students as Woj.

“My mom is totally insane in the best possible way,” Wojcicki (pronounced Wo-JIT-skee) says, dressed in running shorts and hoodie at her company’s Mountain View offices.

The elder Wojcicki is hardly a technologist; she’s a longtime Palo Alto high school journalism teacher who wired her three daughters (a brood that also includes YouTube CEO Susan Wojcicki) with what Anne describes as irrational optimism.

“Without a doubt, the number one thing that’s influenced me is her saying, ‘Just get it done. It’s all within your control,’” she says.

“Zuckerberg and Elon and Sergey and Larry are like her in that way–that free spirit, enthusiasm, get-stuff-done thing.” Growing up in the shadow of Woj, Baby Woj (as she’s known to her mother’s acolytes) internalized her greatest teaching: “The worst thing you can do in life is whine about what you can’t change.”

That guiding philosophy–there are no obstacles, only unexpected gifts–has been essential for the leader of a company whose path has been anything but smooth and straight. Wojcicki co-founded 23andMe in 2006.

A decade working on Wall Street as a health care analyst had convinced her that the American way of treating illness and inventing new drugs had to change. “It just felt like there was this massive amount of waste,” she says, referring to the billions of dollars the pharma industry annually plunges into drug discovery, with diminishing results.

A chance dinner party conversation with Markus Stoffel, a molecular biologist, left her thinking the solution lay in aggregating the world’s genetic data and teasing out the patterns to prevent and combat diseases like Parkinson’s and Alzheimer’s.

Wojcicki, who studied biology, had a handy template in her then husband’s company, which more or less did for the internet what she was proposing to do for the genome.

By filling a plastic vial with saliva and mailing it to 23andMe, customers could decode the DNA embedded in their 23 chromosomes.

That meant discovering everything from the existence of long-lost relatives to whether they were at risk for inherited diseases like cystic fibrosis, or genetic traits, like lactose intolerance.

As 23andMe was able to drive down the price of its tests, from $999 to $399 in 2008 to $99 in 2012, the company signed up hundreds of thousands of customers and expanded to Canada and Europe.

Customers seeking the secrets in their own genes also contribute DNA and personal information to the company’s growing database. Wojcicki believes correlating genotypes to diseases could ultimately lead to efficient, targeted drug breakthroughs.

But in November 2013, just as Wojcicki’s company was gaining momentum, she hit a brick wall in the U.S.

The Food and Drug Administration ordered 23andMe to stop marketing its tests for health purposes, deeming them unregulated medical devices.

Having your most compelling product yanked off the market is the kind of blow that could easily kill a startup. Rather than panic, Wojcicki reverted to her Wall Street analyst self, gathering vast amounts of information, certain a solution was hiding in plain sight.

She held endless conference calls with lawyers, regulatory experts, pharma CEOs, anyone who might have useful insight. “That first week was like ‘Data, data, data–I need data!’” Wojcicki recalls.

The outcome of those frantic conversations was a tactical retreat and a strategic regrouping.

Conceding to the FDA’s demands, 23andMe immediately began working closely with the agency to hash out what it would take to resume selling its tests.

Meanwhile, it orchestrated deals with Genentech and Pfizer, giving them access to parts of its DNA database in exchange for upfront payments and a cut of revenue from new drugs developed using it.

The company announced plans to make its own therapeutics, hiring a former top Genentech scientist to lead the effort. In February, the FDA agreed to allow 23andMe and its competitors to resume marketing tests for autosomal-recessive diseases, which result when both parents carry an abnormal gene.

The decision stopped well short of full regulatory sign-off, but it was a promising enough omen that 23andMe was able to raise a reported $79 million funding round in July that pushed the company’s valuation above $1 billion.

As a first-time entrepreneur, Wojcicki admits she’s learned the hard way not to tackle all the pieces of a complex undertaking simultaneously. “When I look back, pacing wasn’t our strength,” she says. “I have a much better sense now of how long it takes to build things.”

Meanwhile, the challenges facing 23andMe have changed as it has grown.

Initially, the mere idea of using home DNA kits as diagnostic tools was a tough sell for many in the medical community. “The whole direct-to-consumer thing was not, how shall we say, widely applauded,” recalls board member Esther Dyson.

These days, the real question is whether 23andMe can monetize the revolution it has helped usher in. Doing so, says Gartner biotech analyst Stephen Davies, will require forging still closer ties to big pharma firms–the lumbering giants whose inefficiency spurred Wojcicki to action in the first place.

But Wojcicki’s not worried about turning into them–after all, she is her mother’s daughter. Medicine has already changed for good, she says, flashing the fitness trackers she wears religiously on her wrists.

Turns out, it was the heart-rate data from one of them, not a lab test ordered by a physician, that recently helped Wojcicki, who elliptical-bikes to work most days, figure out she was anemic and not out of shape.

“Your health care is no longer about the episodic visit to your doctor, where you have this once-a-year assessment of random vitals,” she says. “It’s about the continuous stream of you.”