CNBC Disruptor 50

Alphabet-backed DNA testing company 23andMe is back in business

Anne Wojcicki, chief executive officer and co-founder of 23andMe Inc., speaks during the WSJDLive Global Technology Conference in Laguna Beach, California, U.S., on Wednesday, Oct. 26, 2016.
Patrick T. Fallon | Bloomberg | Getty Images

23andMe, the at-home DNA testing company backed in part by Alphabet, is now offering the first FDA-approved $199 test for a handful of genetic disease risks, and provide the results directly back to consumers -- without a doctor's note.

Consumers could use the tests to find out if they have a genetic risk for diseases like Parkinson's or Alzheimer's.

Anne Wojcicki, the company's CEO, declined to comment on sales projections in the wake of these new approvals. But she did say that the "number one" requested test from consumers was for a gene associated with Alzheimer's risk.

"It is what customers want," she says.

The company once offered these tests and more, but it ran afoul of the U.S. Food And Drug Administration in 2013 for failing to provide proof that its tests were "analytically or clinically validated." In a public letter, regulators shared concerns that 23andMe would provide inaccurate results to consumers, who would then opt for potentially harmful procedures they didn't need.

Since then, 23andMe has been crawling its way out of its regulatory limbo. In 2015, it started offering so-called "carrier status" reports for 36 diseases, including cystic fibrosis and hereditary hearing loss, which essentially informs a would-be parent if they have a risk of passing these conditions along to their children. This new set of approvals is targeted to the general population, or at least those who want to know about their risks for Alzheimer's and other diseases. Not everyone does, especially if they can't do much about it.

A company spokesperson confirmed to CNBC that 23andMe has not resumed the full suite of direct-to-consumer tests it once offered. In particular, it is still not cleared to test for breast cancer disease risk without a prescription. A false positive result, regulators stated back in 2013, "could lead a patient to undergo prophylactic surgery, chemoprevention, intensive screening, or other morbidity-inducing actions."

These new regulatory approvals come at a transitional time for the company, which has raised more than $240 million in venture funding from Google (since renamed to Alphabet) and the National Institutes of Health, among others, according to Crunchbase.

The company recently shuttered its team dedicated to emerging DNA-sequencing technologies, stating that it needed to focus on its current set of tests. In the past year, it also lost a trio of high-profile executives: President Andy Page, formerly of Gilt Groupe; chief medical officer Jill Hagenkord; and vice president of product Brad Kittredge.

The company is not only betting on direct-to-consumer testing, where it faces strong competition from Illumina-spinout Helix and It also has a drug development shop that is leveraging its growing database of over 1 million people's DNA (after getting tested, users have the option to share their genetic information with 23andMe), and it has reportedly signed lucrative contracts with pharmaceutical giants like Genentech and Pfizer.