23andMe dives into biotech with Genentech R&D star Richard Scheller on board

Richard Scheller

Since its foundation in 2006, 23andMe has gathered genetic info on more than 850,000 people by processing spit tests at $99 a pop. Now the Mountain View, CA, outfit is planning to mine that trove of data for drug targets, transforming into a biotech company and hiring a decorated ex-Genentech luminary to steer the way.

The Google ($GOOG)-backed company has recruited Richard Scheller, who retired from Roche's ($RHHBY) Genentech in December, to serve as its chief science officer and head of therapeutic development starting next month. In his new role, Scheller will assemble a team of drug hunters to pore over 23andMe's database for potential targets, hoping to discover treatments for common and rare diseases alike. About 80% of the company's customers have consented to allow their data be used for research, 23andMe says, giving the nascent biotech what it calls the world's largest genomic database of patients who can be recontacted.

The company's splash into in-house drug development comes on the heels of R&D-minded partnerships with Pfizer ($PFE) and Genentech, in which 23andMe lent out its growing database to external discovery teams focused on specific diseases. Now, with Scheller at the helm, 23andMe plans to take an unfettered dive into its own vault to see if it can get spotlight some therapeutic avenues.

23andMe has had an up-and-down journey into the world of biotech. The startup began with the ethos of democratizing genomics, selling its spit kits with the promise of helping anyone unlock the secrets to his or her DNA. That Silicon Valley optimism ran into a real-world roadblock in 2013, however, when the FDA deemed the so-called Personal Genome Service to be a diagnostic that requires agency approval, restricting 23andMe's marketing practices and forcing the company to pivot. 23andMe has spent the ensuing years behaving more like a biotech than a tech startup, staffing up with regulatory experts and hanging out with Big Pharma on the way to securing its first FDA clearance to test for a rare genetic disease.

Now 23andMe believes it's well groomed for its next incarnation, and the company's new CSO brings some prestige to the affair. Scheller's most recent post as executive vice president of research and early development at Genentech (or gRED) saw him oversee the well-regarded outfit's work from discovery through proof of concept, leading basic research as the company developed game-changing medicines like Perjeta and Kadcyla. Scheller spent 19 years as a professor at Stanford before making the jump into biotech, and his many honors include a Lasker Prize, often referred to as "America's Nobel," and the Kavli Prize in neuroscience.

"I have dedicated my life to research aimed at fulfilling unmet needs for very sick people," Scheller said in a statement. "I believe that human genetics has a very important role to play in finding new treatments for disease. I am excited about the potential for what may be possible through 23andMe's database. It is unlike any other."

23andMe's latest evolution calls to mind another Google-funded project mining the Genentech brain trust in search of new medicines. Calico came out of stealth in 2013 with former Genentech CEO Art Levinson at the helm and Google's checkbook on hand, hoping to decode the aging process. The stealthy biotech has since recruited former Genentech CMO Hal Barron and signed a deal with AbbVie ($ABBV) to set up a new research center in the Bay Area for up to $1.5 billion.

- read the announcement

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