GlaxoSmithKline makes $300M investment in 23andMe, forms 50-50 R&D pact

23andMe spit kit
The packaging of 23andMe's genetic test. (23andMe)

GlaxoSmithKline has made a $300 million equity investment in 23andMe as part of a deal that pulls it close to the consumer genetics pioneer. The partners are contributing preclinical programs to a 50-50 collaboration that will use 23andMe’s genotypic and phenotypic data to accelerate progress. 

The agreement features multiple components. To get the relationship started, 23andMe and GSK are bringing existing programs into the collaboration. 23andMe is proposing to include its early-stage programs, while GSK is contributing its LRRK2 inhibitor. GSK thinks 23andMe’s database of people who know their LRRK2 variant status will help the Parkinson’s program enroll patients on the way to clinical proof of concept.

GSK and 23andMe will also work on earlier-stage programs. The partners plan to use 23andMe’s data to jointly discover drug targets. A joint GSK-23andMe team will then prioritize the targets based on the strength of the hypothesis, chances of drugging them and clinical opportunity. GSK and 23andMe expect to jointly progress “a number” of targets every year. Each company can advance targets independently, too. The partners will split the costs and profits related to these activities.

These activities are set to take place over the next four years. The agreement also features an option to extend the collaboration into a fifth year. If that happens, GSK will become 23andMe’s exclusive drug target discovery collaborator.

GSK has also secured itself a source of data to support its internal programs. 23andMe has greenlit GSK to analyze the database to validate its portfolio and support enrollment in its clinical trials.

The expectation is that the genetic and phenotypic information 23andMe has accrued on the users of its testing service will facilitate more targeted R&D activities, from target selection through to the identification of clinical trial participants. 

“We know that drug targets with genetic validation have a significantly higher chance of ultimately demonstrating benefit for patients and becoming medicines,” GSK CSO Hal Barron said in a statement. “Partnering with 23andMe ... will help to shift our research and development organization to be ‘driven by genetics’, and increase the impact GSK can have on patients.”

GSK indicated its interest in becoming such a genetics-driven organization when it teamed up with the UK Biobank and Regeneron to sequence 500,000 volunteers in 2017. But the Big Pharma rethought its role in the collaboration at the turn of the year, leaving Regeneron to forge ahead with the sequencing with the financial support of AbbVie, Alnylam, AstraZeneca, Biogen and Pfizer.

By switching its attention to 23andMe, GSK has furthered the turnaround of the genetic testing firm. 23andMe looked to be on the ropes when the FDA hit it with a warning letter in 2013. But the startup pivoted, stepping up its interest in drug discovery while working to resolve the standoff with the FDA. Deals with Genentech, Pfizer and a $250 million financing followed.