Tag Archives: 23andme

Big Data in Drug Discovery and Healthcare: What is the Tipping Point?

By Steve Dickman, CEO, CBT Advisors

What good is big data for drug discovery? Not much, if you ask the pharmaceutical industry. The world’s drugmakers have other challenges right now and, with a few notable exceptions like PatientsLikeMe, neither consumer-driven nor patient-driven “big data” seems to be part of the solution.

Even in the apparently more data-driven field of healthcare services, big data keeps bumping up against regulatory and practical barriers. As I wrote earlier this month, a funny thing happened to 23andme on the way to its now-on-hold million-person database….

Mark Murcko, Feyi Olopade and Ajit Singh

Mark Murcko, Feyi Olopade and Ajit Singh (Image courtesy EBD Group)

A recent panel of experts argued that trends in big data will drive up its relevance and provide a navigable path toward greater utility both in pharma and in healthcare. The panelists at the workshop I put together for the 2014 Biotech Showcase in San Francisco last week hinted that the time will soon come when “big data” is as much a part of both drug discovery and healthcare as it is of financial forecasting  and choosing driving routes that minimize traffic.

Click here to watch the video of the panel or copy-paste the link:


The companies that presented are NuMedii, a venture-backed company that calls itself a “digital pharma company” tackling drug discovery itself; and CancerIQ, a data analytics company focusing on aggregating data on how cancer patients are treated and using it to upgrade the treatment that can be provided in different geographies and types of hospitals.

Joining the CEOs of NuMedii and CancerIQ were Ajit Singh, a venture capitalist with Artiman Ventures who taught electrical engineering and neuroscience at Princeton and then ran global businesses for Siemens in oncology and digital radiology; and Mark Murcko, the former chief technology officer of Vertex Pharmaceuticals who is now running a consulting firm and advising computer-powered drug discovery firms such as Schrodinger and Nimbus Discovery.

Due to these engaging and insightful speakers, this was a fascinating panel that delivered all sorts of hints about what looks like an upcoming turning point. Topics included (time stamps on video in parentheses):

  • What sort of venture investor would understand a big data company in healthcare, IT or life science? (10:10) and (12:45)
  • Where do big data startups go to even get their data given the high degree of regulation? (27:00) and (28:50)
  • How can innovative startups avoid being stopped cold by HIPAA? (21:30)
  • What will be the turning point at which the pharmaceutical industry sees big data as a driver of solutions rather than just noise? (32:40) and (38:00) and (52:20)
  • Is genomic data “big data”? (17:00)
  • How can “sparse data” be just as useful as “big data” in solving certain problems? (43:00)
  • How can newly industrialized countries like India and China contribute to models that might be useful in the United States and Europe? Will they “go first” in some sense in using big data? (44:30)
Gini Deshpande, Founder-CEO of NuMedii

Gini Deshpande, Founder-CEO of NuMedii (Image courtesy EBD Group)

Here is a more complete list of time stamps:

  • (2:00) Definition of Big Data “Things one can do at a large scale that cannot be done at a smaller one to extract new insights or create new forms of value in ways that change markets, organizations, the relationship between citizens and governments and more.” (From the 2013 book Big Data: A Revolution That Will Transform How We Live, Work and Think by Mayer-Schönberger and Cukier)
  • (3:00) Gini Deshpande self-introduction. “At NuMedii, we are a digital pharma company. We are focused on leveraging the vast amounts of life sciences big data that is out there and translating it into drugs with a higher probability of therapeutic and commercial success….We are a pharma company. We leverage the data and turn the data into drug candidates.”
  • (4:20) Mark Murcko self-introduction.
  • (5:10) Feyi Olopade self-introduction. “My co-founder is my mother. She is a nutty professor slash clinical oncologist slash MacArthur genius fellow. It was my mother’s vision to start using data and analytics to deliver more precision treatment and more precision risk assessment….We hope to democratize access to premium cancer care by helping providers deliver data-driven decisions.”
  • (6:35) Ajit Singh self-introduction
  • (7:45) In the world of healthcare, the analytics revolution has barely begun
  • (10:10) How NuMedii bridges the (large) gap between healthcare investors and IT investors
  • (12:45) How CancerIQ bridges the same gap
  • (14:35) Early days of analytics: Shared Medical Systems
  • (17:00) Why genomic data may not be big data
  • (20:35) How 23andme learned the hard way about regulation of medical data
  • (21:30) On overcoming HIPAA: a fascinating framework
  • (25:00) Why IT investing is easier: world of atoms vs. world of bits
  • (27:00) How CancerIQ gets its data
  • (28:50) How NuMedii gets its data
  • (32:40) Why pharma is still (mostly) focused on the drug candidates
  • (38:00) The importance of actionability
  • (41:00) Q&A: How to de-identify health data
  • (42:15) Cancer patients are very willing to share their (personal) information
  • (43:00) The best data may not be big data
  • (44:30) International big data in healthcare – will it take the lead? Case: India
  • (49:00) Case: China
  • (52:20) Why pharma does not yet trust “black box” models – they do not tell a story, says Murcko

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23andme: It’s all about the data

By Steve Dickman, CBT Advisors

There was a flood of news in late November about the stinging letter that Mountain View, California-based 23andme received from the U.S. Food and Drug Administration (FDA). Because it ignored FDA instead of continuing a years-long dialogue, 23andme was forced, over howls of protest, to stop selling its direct-to-consumer genetic testing panel.

Almost lost in the controversy was the company’s now derailed core strategy: to collect a million customers’ worth of genetic data, then mine the data for valuable insights that can give the company an insurmountable competitive advantage.

You could try to convince me that the strategy is moot now that 23andme has run into a brick wall at FDA. That aggregating data as a way both to derive medical benefit and to make money is now as dead as 23andme’s consumer genetics business.

23andme blimp


But I would push back. I think this regulatory battle, which 23andme has apparently lost in a rout, is just the first skirmish in what promises to be a game played over a much longer term and at much higher stakes. More about that below.

A year before the FDA’s letter, 23andme cut the price of its service to $99 and announced that it would attempt to reach one million customers by the end of 2013 after attracting only a reported 180,000 in its first six years on the market.

In my view, this change in business model explains much. The test used to cost $699, then $299 and, despite economies of scale, it is hard to imagine that 23andme was making much money selling it for $99.

What happened is this: when adoption was running way behind what it would likely have taken for 23andme to become a profitable testing company, there was a purposeful shift toward aggregating data. In the words of CEO Anne Wojcicki, “One million customers can be the tipping point that moves medicine into the molecular era.”

In my view, what stood behind this shift is the same widespread belief that informs much of the research being done on longer genome sequences: that the aggregation of enough “Big Data” will yield insights more valuable – and profitable – than anything that genomics has yielded until now.

This is why BGI in China, in its Million Human Genomes project, is attempting to sequence more genomes faster than has ever been done before.

It is also why Foundation Medicine has raised over $200 million in venture funding and IPO financing to be the first to market with a 200-gene test for cancer. Foundation does not simply want to be a first mover in massive sequencing of cancer genomes. As I have written before, I believe that it wants both the data that patients will provide as well as the high-margin revenue that will come from providing sequences of the relevant genetic segments at $5,000 or so per patient. It remains to be seen if it will get either the data or the revenue.

Journalist Ezra Klein, nailed it in his Dec. 5 column on Bloomberg View when he wrote “… the long-term play is [the] more interesting [one]: 23andMe wants to aggregate the genetic information of millions of individuals, then mine that data to make medical connections, find disease markers and discover treatments at a faster rate than would be possible using traditional techniques.”

In Klein’s view, the company “fumbled” its chance to work in concert with FDA to jointly develop regulatory guidelines under which it – and presumably its competitors – could live. This “fumbling” by 23andme, wrote Klein, has created “an opportunity for the political system to reassess an old law and determine whether it suits the newest technologies.”

I beg to differ. I do not think 23andme was that foolish. I think that by flagrantly waving its tests in the face of FDA, even going so far as to run national TV ads for them while spending six months not returning FDA’s calls, the company sought out the chance to challenge the very idea of its test being regulated as a medical device.

Indeed, Lauren Fifield, a senior health policy expert cited by MedCity News, predicted in late November that the company has purposely taken a stand. “My gut tells me,” Fifield is quoted as saying, “that the company isn’t challenging process but is instead challenging the very regulatory definition of what it is to be a device.” Fifield, the blog says, works closely with startups, the FDA, and other federal health agencies in her role at electronic medical records company Practice Fusion. “What remains to be seen,” she continues, “is whether the company and tech industry can convince the government that safety can be increased, or at least balanced, by innovation rather than set at odds.”

Look not just at the fact that 23andme lost. Look at how the company lost. The FDA letter stated that, after “more than 14 face-to-face and teleconference meetings, hundreds of email exchanges, and dozens of written communications, you have not worked with us toward de novo classification, did not provide the additional information we requested necessary to complete review of your 510(k)s, and FDA has not received any communication from 23andMe since May.”

You might try to persuade me that 23andme acted inattentively or naively when it gave FDA the cold shoulder. That is the argument made in The New Yorker blog on Nov. 27, 2013, by 23andme co-founder Linda Avey, who left the company in 2009. The FDA decision “…surprised me,” she told the New Yorker writer David Dobbs. “But she pointed out,” wrote Dobbs, “that 23andMe’s general counsel, whom she understands was leading the negotiations with F.D.A., left the company this summer; [so] perhaps it fell through the cracks. “The whole time I was there,” Avey told Dobbs, “we were in an outreach mode with the F.D.A. I can’t imagine there was that much of a cultural shift since then. It might be they weren’t paying close attention.” She admits this sounds strange, Dobbs wrote, but thinks that it is no stranger than any other explanation.

Look at what was at stake: the very future of the company, not to mention the option for consumers to have hundreds of thousands of their genes scanned for health-related variants. 23andme was the only remaining provider among the initial crop of consumer-focused companies to continue to offer these tests.[1]

With so much on the line, I have to believe that 23andme went into this battle with its eyes open. It initially conceded defeat – though even that took a week – in a press release put up on the company web site stating, “We have received the warning letter from the Food and Drug Administration. We recognize that we have not met the FDA’s expectations regarding timeline and communication regarding our submission. Our relationship with the FDA is extremely important to us and we are committed to fully engaging with them to address their concerns.”

Wojcicki was quoted in a New York Times blog saying that the company should have responded to FDA’s requests sooner rather than ignoring them for six months. “We completely recognize we’re behind schedule; we failed to communicate proactively,” she said. “They’re a very important partner, and everyone is focused on resolving it.”

But 23andme may also be borrowing a page from its investor Google in not necessarily attempting to resolve the tension with FDA but rather by trying to trump FDA’s factual and legal arguments with evidence of the utility of the data and widespread support of consumers who willingly share the data in order to see a bigger picture. How better to go into a regulatory or legal proceeding than to be armed with medical advances that were only made possible by data collection that, one could later argue, existed in a regulatory grey zone?

Now that the initial thrust by 23andme has been parried by FDA, the company will face a much tougher road to getting its tests back on the market, if it ever does.

But I would not underestimate the power behind the company, which might include the full force of Google, despite the public separation of Wojcicki and her husband, Google co-founder Sergei Brin. After all, Brin himself took an interest in the company when it revealed his increased risk for Parkinson’s disease, which he knew ran in his family. Furthermore, Anne Wojcicki’s sister, Susan Wojcicki, is Google’s senior vice president of ads and commerce. In addition to Facebook billionaire Yuri Milner and several venture capital firms, Google would appear to remain one of 23andme’s largest financial investors.

Aside from Google, enough consumers believe that they have been helped by 23andme’s tests that a court case or at least an impassioned appearance at Congressional hearings might start to turn things around.

The implications reach far beyond 23andme. In an interview published (paywall) in the Financial Times on Dec. 20, 2013, PayPal co-founder  and billionaire investor Peter Thiel lamented “how technological ambition has gone from the world, leaving what he calls an ‘age of diminished expectations that has slowly seeped into the culture.’ Predictably, given his libertarian bent, much of this is traced back to regulation.”

This is his explanation for why the computer industry (which inhabits “the world of bits”) has thrived while so many others (“the world of atoms”) have not: “The world of bits has not been regulated and that’s where we’ve seen a lot of progress in the past 40 years, and the world of atoms has been regulated, and that’s why it’s been hard to get progress in areas like biotechnology….”

The argument in favor of consumer genetics the way 23andme wants to practice it will be easier to make after there is overwhelming evidence in favor of its utility. I, for one, am not a customer. I have not been convinced that a 23andme test would do more for me than increase my anxiety about my genetic risks for a variety of ailments.

In that regard, FDA has a point beyond a merely procedural one. A clinical trial showing an advantage to a genetic test such as 23andme’s would go a long way toward that test achieving acceptance among both regulators and consumers.

23andme might go away as a provider of medical data. (The company still provides genealogical services.) But its skirmish has paved the way for a fight that could take the better part of the next decade and might result in either radical reform (no more FDA regulation of consumers’ own genes at all?) or in the offshoring of genetic analysis, with all its benefits and pitfalls, to more lenient regulatory environments, whether those turn out to be in China, in Iceland or somewhere in between.


Steve Dickman will be moderating a panel on Big Data in healthcare and drug discovery at Biotech Showcase in San Francisco on Jan. 14, 2014, at 8am Pacific time. He is CEO of consulting firm CBT Advisors, based in Cambridge, Massachusetts.

[1] Navigenics was acquired in 2012 by Life Technologies (now Thermo Fisher) and its consumer-facing business was shut down. DecodeME was discontinued before its parent, Iceland-based Decode, was acquired by Amgen in 2012. Pathway Genomics shied away from direct-to-consumer testing through Walgreens after a warning from FDA came in 2010.


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