Finance

Genetic Testing Company 23andMe Going Public At $3.5 Billion Valuation, Focus On More Therapeutics

While personal genetic testing as entertainment slowed as a revenue source in recent years, 23andMe has doubled down on its therapeutic programs.

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Chin tilted downward, the character of the bloodsucking lawyer out-of-focus to his left, Jeff Goldblum intones in the way only he can, “Genetic power is the most awesome force the planet’s ever seen, but you wield it like a, ah, kid that’s found his dad’s gun.” And then, well, you’ve seen the movie.

Damn that’s a good scene. Too bad the 20 superfluous Jurassic Park sequels didn’t spend some of that CGI budget on a few cogent writers instead. Anyway, Jeff Goldblum was right (when isn’t he, really?): genetic power is awesome in the truest sense of that word.

In terms of really being the most awesome force the planet’s ever seen, there are a lot of cases to be made there (nuclear fusion, good old-fashioned kinetic energy, human stupidity, etc.). Still, we are barely at the forefront of what genetic technology can do, and it’s already produced a number of minor miracles, including vaccines that come out in record time, gene therapies to treat several otherwise incurable conditions, and fun little at-home kits where you spit into a tube and someone tells you what land your great-grandpappy came from.

It’s that last one which helped catapult personal genomics and biotechnology company 23andMe to fame and apparent commercial success. 23andMe recently announced plans to go public via a merger with VG Acquisition Corp., at a value of $3.5 billion.

VG Acquisition Corp. is a special purpose acquisition company, founded by celebrity investor Sir Richard Branson to allow 23andMe to go public without the potential messiness of an initial public offering. In addition to Branson, the deal has attracted a number of prominent investment firms and venture capitalists. By somewhere around the midpoint of 2021, individual investors should be able to get in on the action, with the stock trading under ticker symbol ME on the New York Stock Exchange.

While personal genetic testing as entertainment slowed as a revenue source in recent years, 23andMe has doubled down on its therapeutic programs. The company already develops pharmaceuticals in collaboration with GlaxoSmithKline Plc, and it plans to pour a good amount of its new investor cash into the personal healthcare and therapeutics side of the business.

I myself received a 23andMe personal ancestry and genetics kit as a holiday gift about a year ago. I found it to be pretty fun. To no one’s surprise, it turns out I am really, really white.

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At the same time, I saw a couple Baby Boomers refuse gifted 23andMe test kits (which is totally fine, of course). The critics of genetic testing firms like 23andMe tend to focus on privacy concerns. And if you are the sort of person who’s worried that Alexa is always listening to you, well, you’re probably never going to turn over the whole sequence of A’s, C’s, G’s, and T’s that makes you you to a corporation.

At some point, though, I don’t think there’s going to be much of a choice, at least if you want the increasingly miraculous cures companies like 23andMe are probably going to be creating. Right now, 23andMe has genetic information from 12 million customers. That is the type of data set scientists in most fields can only dream about.

As for me, I don’t really get the privacy fears about companies like 23andMe, other than a sense of general uneasiness from the people who didn’t already grow up unwittingly selling all their personal data to social media companies. You yourself have no idea what your genetic code says, and you leave it sloughed over every surface you ever encounter, so it hardly bears the traditional hallmarks of a closely held personal secret. Unless you’ve sprayed bodily fluids over a variety of crime scenes, really, what is the worst-case outcome? There is a data breach and you get part of a class action settlement?

Whatever the privacy concerns, becoming a public company, with all the heightened levels of oversight that entails, can only help assuage them. 23andMe, and its signature slow and methodical evolution from genealogy novelty to biomedical powerhouse, is hardly the secret genetic playground of an eccentric billionaire that Jeff Goldblum so memorably warned us about. 23andMe is, however, built upon the same awe-inspiring science of so many movies, and increasingly, of so many real-life breakthroughs that have helped countless people lead better, longer lives.

I might pick up a few ME shares myself once the company goes public. More importantly, I look forward to seeing what 23andMe does with the awesome power of genetics.

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Jonathan Wolf is a civil litigator and author of Your Debt-Free JD (affiliate link). He has taught legal writing, written for a wide variety of publications, and made it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless solely his own and should not be attributed to any organization with which he is affiliated. He wouldn’t want to share the credit anyway. He can be reached at jon_wolf@hotmail.com.

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