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23andMe Q1 Revenues Rise 23 Percent

This article has been updated with information from the company's 10-Q filing.

NEW YORK – 23andMe reported before the opening of the market on Friday that its revenues for the first quarter of its fiscal year 2022 rose 23 percent year over year, primarily due to higher sales of its Personal Genome Service kit. 

The company reported its quarterly financial results for the first time after going public in June through a merger with special purpose acquisition company VG Acquisition.

For the three months ended June 30, the consumer genetics and research company reported total revenues of $59.2 million, up from $48.1 million a year earlier. Revenues came entirely from the company's consumer and research services business, compared to revenues of $48.0 million from consumer and research services and $48,000 from its therapeutics business in the year-ago quarter.

The company also noted that consumer services revenues represented 81 percent of total revenues for Q1. Research services revenues, which were derived primarily from the firm's four-year drug discovery collaboration deal with GlaxoSmithKline, accounted for the other 19 percent. The increase in consumer services revenue was partially offset by a decline in research services revenues, due primarily to a decline in revenues not related to the deal with GSK.

"We began our 2022 financial year with a solid first quarter. Our revenue growth of 23 percent reflects increased delivery of our Personal Genome Service to customers, compared to the first quarter of fiscal 2021, which was negatively impacted by the onset of the global pandemic," 23andMe CFO Steve Schoch said in a statement. "We are continuing to operate with an objective of profitable growth in our consumer and research services segment. We are also prioritizing significant investments in advancing our therapeutics portfolio."

In its 10-Q filing with the US Securities and Exchange Commission on Friday, the company also gave an update on the $100 million lawsuit filed against it in 2019 by Celmatix, which accused 23andMe of breach of agreement and of willfully blocking Celmatix’s ability to raise capital.

Celmatix amended its complaint on July 13, asserting an additional claim against 23andMe for fraudulent inducement of contract, the company said in its SEC filing. The company filed its answer on July 19, denying all material allegations and asserting a counterclaim and an additional defense of fraudulent inducement of contract.

"The company believes that the claims are without merit and is vigorously defending against the claims and pursuing its counterclaims. Discovery is ongoing," 23andMe said in its 10-Q filing. "The company is unable to conclude at this time whether any potential loss is probable with respect to any of the claims, and, as the litigation remains in the discovery stage, cannot estimate any reasonably possible loss or range of loss that may potentially result if the plaintiff ultimately were to prevail with respect to any of the claims that have been asserted." 

The firm's Q1 net loss widened to $42.0 million from $35.8 million a year earlier. But its loss per share narrowed to $.25, based on approximately 168.2 million weighted-average shares, compared to $.38, based on about 93.6 million weighted-average shares a year ago. 

23andMe's R&D expenses for the quarter rose 28 percent to $44.2 million from $34.4 million a year earlier. Its SG&A costs rose 12 percent to $28.0 million from $24.9 million. 

The company ended the quarter with $769.9 million in cash and $1.4 million in restricted cash. 

For full-year 2022, the company is projecting revenues of $250 million to $260 million, with a net loss of $210 million to $225 million.

The firm's shares fell more than 4 percent to $7.61 in morning trading on the Nasdaq.

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