Have we reached a peak? 23andMe, the genomic testing and genome research company, has struck gold, oil, and platinum in a merger with ‘blank check’ SPAC (special purpose acquisition company) VG Acquisition Corp. VG was formed by Richard Branson’s Virgin Group for the purposes of the acquisition. By end of Q2, the company will be trading on the NYSE under the ticker symbol ME. The company’s valuation is estimated as $3.5 bn.
23andMe’s SPAC follows on December’s $85 million Series F round, bringing their total funding pre-SPAC to about $900 million. The transaction will result in 23andMe having around $984 million in cash to invest. The deal also includes the private investment in public equity (PIPE) transaction in which Richard Branson and 23andMe founder/CEO Anne Wojcicki will invest $25 million each. There is no disclosure of the status of GSK’s ongoing investment in 23andMe, reportedly 50 percent, and Sequoia Capital’s.
For 23andMe, this is a massive turnaround–and exit from stagnant private ownership–from their precarious state one year ago, which required layoffs of 14 percent of their staff, about 100 people. While the direct-to-consumer testing for diseases and ancestry model fell apart after holiday 2019 (TTA examined why here), the gold in genomics is monetizing that data with large drug and clinical trial companies for drug discovery and therapies. With GSK, they began clinical trials of a cancer drug last year, as well as licensing its first drug candidate to Spanish dermatology drugmaker Almirall.
Going public via a SPAC and with a PIPE is definitely a one-up on rival Ancestry.com. Last August, they sold 75 percent of the company to Blackstone Group for $4.7 bn. TechCrunch, Becker’s Health IT, Financial Times