Fertility startup Celmatix files a $100 million lawsuit against 23andMe

Genetic testing startup 23andMe is getting sued for over $100 million in damages by fertility startup Celmatix, a former business partner that it began working with in 2015. Celmatix filed a legal complaint in the New York State Supreme Court for New York County against 23andMe. The lawsuit, filed by Pierce Bainbridge on behalf of Celmatix, Inc. which seeks declaratory relief and damages in excess of $100 million. According to the announcement, the lawsuit “is based on 23andMe’s breaches of the parties’ agreement and tortious interference with Celmatix’s efforts to raise capital.”

Founded in 2006 by by Linda Avey and Anne Wojcicki, the wife of Google co-founder Sergey Brin, 23andMe is a human genome research company that enables its users to study their ancestry, genealogy, and inherited traits. The startup’s mission is to make the human genome searchable. Brin, along with Google, gave 23andMe $3.9 million as part of a series A in May of 2007.

Prior to its relationship with 23andMe, Celmatix had established itself as a leader in the female reproductive health space. Its unique data sets, proprietary predictive models, and genomic insights drove the development of many first-of-their kind products in the market, designed to empower women and their physicians to make more informed decisions about fertility and reproductive health. In addition, the company demonstrated a strong commitment to furthering research in the women’s reproductive health community, generating more than 50 presentations at medical and scientific conferences and peer-reviewed journal articles since its 2009 founding.

According to the filing, Celmatix, in November 2015, entered into a research collaboration with 23andMe in designed to advance women’s reproductive health by updating and expanding upon Celmatix’s existing physician-administered genetic test and developing new diagnostic tools that could address a wider market. Celmatix also partnered with 23andMe to conduct an ambitious, first-of-its-kind fertility research community study. More than 4,000 women participated, providing personal health and reproductive information.

However, because 23andMe breached its contractual obligations, Celmatix was unable to bring the intended new products to the market. Also, the results of the groundbreaking community study are in limbo pending resolution of the dispute and therefore have not been leveraged to advance women’s reproductive health as envisioned by the parties’ agreement.

“Celmatix entered this agreement with 23andMe to further our mission of giving women the insights and tools they need to be proactive about their fertility and reproductive health,” explained Celmatix founder and CEO, Dr. Piraye Yurttas Beim. “While we would have greatly preferred to avoid litigation, we have a responsibility to our investors, to the thousands of women who entrusted their personal information to 23andMe as part of our collaborative study, and to the millions who would benefit from these scientific discoveries and products in reproductive health.”