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23andMe Fiscal Q2 Revenues Increase 7 Percent

NEW YORK – 23andMe said Wednesday after the close of the market that its fiscal 2022 second quarter revenues increased nearly 7 percent to $55.2 million from $51.8 million in the same period a year earlier, primarily due to higher sales of its Personal Genome Service kit and subscriptions to its 23andMe+ service.

The three months ended Sept. 30 represent the genetic testing firm's first full quarter since it went public in June through a merger with a special purpose acquisition company.

The firm's Q2 net loss narrowed to $16.5 million, or $.04 per share, from $36.2 million, or $.38 per share a year earlier. The firm used approximately 406.9 million weighted-average shares to calculate per-share loss in the recently completed quarter compared to about 95 million weighted-average shares a year ago. 

23andMe's R&D expenses for the quarter rose 16 percent to $44.5 million from $38.2 million a year earlier. Its SG&A costs rose 32 percent to $29.9 million from $22.6 million. 

The company ended the quarter with $701.1 million in cash and $1.4 million in restricted cash. 

For full-year 2022, the company is still projecting revenues of $250 million to $260 million, with a net loss of $210 million to $225 million. 23andMe said that it will offer updated guidance with its Q3 results to reflect the recent $400 million acquisition of telehealth platform developer Lemonaid Health.

In a conference call Wednesday, CEO Anne Wojcicki highlighted Lemonaid as a growth area.

"Lemonaid plays a very strategic role for us," Wojcicki said. Customers have been asking for ways to integrate test results into their own health and care. "Our customers have been very clear that they want more from 23andMe," she added.

The 23andMe+ subscription service is another vehicle the company is counting on for growth and to make genetic testing data more clinically relevant. The membership-based offering launched in October 2020 to provide "premium" features such as personalized reports on heart health and pharmacogenetics.

In Q2, the firm introduced personalized reports on risk of gallstones, low HDL cholesterol, and gestational diabetes.

23andMe also is advancing an in-house therapeutic pipeline as well as research being conducted in partnership with GlaxoSmithKline. Kenneth Hillan, 23andMe's head of therapeutics, said that next year GSK will report data from a monoclonal antibody trial against negative immunoregulatory human cell surface receptor CD96.

Hillan added that 23andMe will start trials on its own drug, known internally as P006, in the current fiscal year, which ends March 31. The company has not disclosed the target or mechanism of the P006 program.

23andMe shares jumped sharply at the opening of Nasdaq trading Thursday, and were up more than 10 percent to $12.70 at 10 a.m. Eastern time.