NEW YORK – Personal genomics firm 23andMe said on Tuesday after the close of the market that it has laid off approximately half of the employees in its therapeutics business, or 71 people.
The layoffs follow cuts of about 75 jobs in April and were due to reorganization following the conclusion of a five-year therapeutics development partnership with GSK, CEO and Cofounder Anne Wojcicki said on a conference call with investors following the release of the firm's first quarter fiscal-year 2024 results.
For the three months ended June 30, 23andMe said that revenues fell 6 percent to $60.9 million from $64.5 million in the prior-year period, beating the consensus Wall Street estimate of $56.9 million.
The decline was attributable to a "focus on driving improved product margins" by raising prices for new customers, leading to lower overall volume in DNA testing kits and telehealth orders, 23andMe interim CFO Joseph Selsavage said on the call, partially offset by growth in subscription services.
Consumer services, including personal genomics services, subscriptions, and telehealth, represented 79 percent of the revenue total for Q1.
With the GSK deal completed, the firm now has the ability to partner with other pharma firms, which it is actively pursuing, she said. "Details will be shared as they're available," she added.
Wojcicki noted that Chief Therapeutics Officer Kenneth Hillan will be stepping down with the intention of retiring in February. He will be replaced by Bill Richards, who will serve as head of therapeutics discovery, and Jennifer Low, who will serve as head of therapeutics development.
23andMe reported a net loss of $104.6 million, or $.23 per share, compared to a net loss of $89.5 million, or $.20 per share, missing the consensus Wall Street estimate of a $.15 loss per share.
The firm's R&D expenses totaled $62.3 million in Q1, up 20 percent from $52 million a year ago. The company's SG&A expenses grew 16 percent year over year to $73.4 million from $63.1 million. It also took a $4.2 million restructuring charge in the quarter versus no such charges in the prior-year Q1, with $3.6 million related to cash severance payments and benefits continuation.
As of June 30, the firm had $314.4 million in cash and cash equivalents plus $1.4 million in restricted cash.
On the call, the firm provided updated 2024 financial guidance. It lowered the high end of its total fiscal 2024 revenue guidance to $275 million, down from $280 million, but reaffirmed a low end of $255 million. It now expects a net loss in the range of $325 million to $345 million; previously 23andMe had guided to net loss in the range of $340 million to $365 million.
In Wednesday morning trading on the Nasdaq, shares of 23andMe were down 8 percent at $1.60.