One of the pioneers of consumer genomics, 23andMe is going public via a merger with Richard Branson’s special purpose acquisition corporation (SPAC).
23andMe was one of the first companies to demonstrate the value of genomic data for drug development with its $300M deal with GlaxoSmithKline in 2018.
Now, fresh off an $82.5M Series G in December 2020, the genomics company is going public via SPAC. The deal, with Richard Branson’s VG Acquisition, will value 23andMe at $3.5B and infuse the company with $980M in available cash.
WHAT YOU NEED TO KNOW:
- Genomic data is the new oil, and we’re just scratching the surface: 23andMe’s value lies in its trove of genomic data and the potential to mine it for drug candidates. The company has sold 12M sequencing kits to date. That represents less than 0.2% of the world’s population, and it’s a relatively homogenous dataset consisting mostly of individuals with European ancestry.
- It’s all about drugs: The pharmaceutical business model is moving towards precision medicine, and it’s catalyzed by data. GlaxoSmithKline, Genentech, Pfizer, and Almirall have all partnered with 23andMe to develop or license drug candidates.
- The United States is losing ground: 2020 saw omics deal share for the US drop below 50% for the first time, while China’s share of deals jumped significantly from 17% in 2019 to 25% last year. Expect this trend to continue, as funding flows to companies like 54gene that are collecting diverse genomic datasets outside the US.
- Omics exits abound: The last quarter of 2020 saw a flurry of omics exits, with 6 IPOs and 4 acquisitions. Incumbents are active, with Illumina, Invitae, OncoCyte, Exact Sciences having acquired multiple omics companies within the past 2 years.
- As the market for direct-to-consumer genomics wanes, in part due to increased FDA regulation, we’ll see more companies, like Helix and Color Genomics, shift their business model towards partnering with healthcare providers in order to provide sequencing services to patients.
- Less than 1% of variants in the human genome have been characterized. Given that 23andMe is valued at $3.5B with 12M genomes, increasing genomic coverage and diversity represents a massive opportunity. As such, companies outside the US will continue to garner investment.
- Beyond genomics, other omics data is potentially even more valuable. Environmental variables create epigenetic changes that are expressed in RNA (transcriptomics), metabolism (metabolomics), and proteins (proteomics). Companies, such as Tempus, that are collecting, organizing, and analyzing multi-omics data are well-positioned to enable the future of drug development.
This report was created with data from CB Insights’ emerging technology insights platform, which offers clarity into emerging tech and new business strategies through tools like:
- Earnings Transcripts Search Engine & Analytics to get an information edge on competitors’ and incumbents’ strategies
- Patent Analytics to see where innovation is happening next
- Company Mosaic Scores to evaluate startup health, based on our National Science Foundation-backed algorithm
- Business Relationships to quickly see a company’s competitors, partners, and more
- Market Sizing Tools to visualize market growth and spot the next big opportunity