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23andMe wants to change the face of health care

December 12, 2012: 11:35 AM ET

Anne Wojcicki wants to change the face of health care, and she believes that with the latest round of fundraising for her company 23andMe she can do just that.

121212031032-23andme-website-gallery-horizontalFORTUNE -- 23andMe, the personal genetics company founded by Anne Wojcicki, has raised $50 million in Series D financing from investors including Russian venture capitalist Yuri Milner, Wojcicki and her husband Google co-founder Sergey Brin, New Enterprise Associates, MPM Capital, and Google Ventures.

"This investment is transformative in that it will help us create a data platform that can be easily searched and used by researchers all over the world," Wojcicki tells FORTUNE.

With the financing in place, 23andMe has dropped the price of a personal genetics test to $99 from $299; and executives hope the move will push the company's user base to 1 million customers in 2013, up from 180,000. This would give the six-year-old company one of the world's largest private databases of genetic information.

23andMe makes it easy for users to learn about their inherited health traits and genetic links to certain diseases. Just mail the company your saliva sample, and receive your results a few weeks later.

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Just as easily, 23andMe is able to study, store, and distribute this trove of data. While a user can opt to keep all of her information private, approximately 90% of 23andMe customers allow their results to be used in research conducted by the company and its partners, like pharmaceutical companies. 23andMe never shares individual level data without specific consent; rather the company aggregates and strips it of identifying information before it is used.

Pharma companies believe that genetic data could be instrumental in creating better, more targeted treatments for diseases. Amgen recently bought DeCode, a company that explores the link between genes and diseases, for $415 million. Genentech is working with 23andMe to learn if genetic factors influence a person's response to the cancer drug Avastin.

"By having 1 million individual users you can get to a scale where researchers are running data queries through 23andMe, where drug studies leverage our data, and where individuals can more easily be connected to studies that could benefit them," Wojcicki says.

If 23andMe can amass the largest, richest database of genetic information, it could theoretically attract more researchers and more users who want to find specialized medical treatments.

The more users that come to 23andMe, the better, more accurate, and more useful the company's database will be. And the more likely it is that researchers will want to search the 23andMe database for information. This is not unlike how Google (GOOG) became a search engine powerhouse. It was an early mover with a superior algorithm. The more users came, the better the search results. This attracted more users, prompted more searches, and generated more accurate, useful results.

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When 23andMe began offering services in late 2007 (a year after it was launched), it didn't have the feel of a company that could change the face of drug making. The service was costly -- then closer to $1,000 for a test -- and news stories tended to focus on so-called "spit parties," where tony urbanites submitted their saliva samples while indulging in canapes and cocktails. The service seemed like just another strange, pre-financial crisis indulgence for the very wealthy.

But with this latest round of funding and the potential for a vast user base, 23andMe is on the verge of becoming an influential force in the way we look at health care and medicine. Wojcicki uses the word disrupt a lot; and she has some big, audacious hopes for her company, which is not yet profitable.

"We've always had a vision and mission to introduce a new type of health care model that is focused on prevention and consumer-driven research," she says. "If you have lots of individuals thinking of prevention, who know information that could have a meaningful impact on their lives, it changes the model for drug research and health care."

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About This Author
Katie Benner
Katie Benner
Writer, Fortune

Katie Benner joined Fortune in October 2006. As a writer for the magazine and the website, she focuses on Wall Street and the economy. Prior to joining Fortune, Benner worked at TheStreet.com, CNNMoney, and as a freelancer in Beijing for China International Business, the South China Morning Post, and as a columnist for Beijing Review. She has a B.A. in English from Bowdoin College.

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