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23andMe Counting on Lemonaid Health to Achieve Vision of Personalized Care


CHICAGO – The $400 million acquisition of telehealth platform developer and telepharmacy services company Lemonaid Health in November has given 23andMe the foundation it needs to achieve its vision of becoming a preventative health company.

In a conference call Thursday following the release of the company's fiscal year 2022 fourth quarter financial results, CEO and Cofounder Anne Wojcicki said that 23andMe seeks to "integrate genetics into everyday care with the ultimate goal of making personalized healthcare a reality." This has been difficult across the healthcare industry due to factors including lack of reimbursement for genetic testing and inadequate training in genetics at the primary care level, she said.

"We will be able to offer people the ability to access and learn about their DNA and then take proactive, preventative steps to manage their health and well-being through guidance from our genetically trained Lemonaid clinicians," according to Wojcicki.

"We know there is a huge unmet need for preventative healthcare," Wojcicki said, and current standards of care often stand in the way of prevention.

"We see guidelines for cancer screening that are primarily based on age, but rarely based on an individual's genetic risk," Wojcicki noted. "Most people don't know their genetic risk factors, much less what to do with that information."

Thus, 23andMe, with Lemonaid's telehealth platform and pharmacy services, is turning its focus on the consumer side of its business to "building a bridge between health … awareness and health risk and disease management with our new genomic health services," Wojcicki said. "Our plan is to support patients from the first touch point through a continuum of care being the trusted guide."

CFO Steve Schoch said that Lemonaid Health "now underpins our planned introduction of a genomic health service."

Sunnyvale, California-based 23andMe said earlier this month that customers can now schedule telehealth consultations on genetic test reports with care providers from Lemonaid Health.

In this first phase of integration of Lemonaid, 23andMe will focus on genetic health risk reports for hereditary breast and ovarian cancers as well as for familial hypercholesterolemia. 

Subscribers to the company's 23andMe+ premium service will also be able to discuss pharmacogenetic reports with Lemonaid clinicians. Initial consultations will cost $65, while follow-up virtual patient visits will run $110, the company said. 

The firm plans on concentrating on the direct-to-consumer, self-pay market for the next several years, Wojcicki said this week.

A beta test on this service began this month, though Schoch said that a full launch of this genomic health service will not happen until late in FY 2023, which runs through next March 31.

"The rise of telemedicine, the rise of even online pharmacy, has really opened up the door where people are comfortable and used to this kind of interaction with healthcare providers," Wojcicki said. "I think there's a real opportunity to have a [complete product and service line] with an integrated experience, and that's what we are focused really on building out for the next year."

On Thursday, the company reported that its FY 2022 fourth quarter revenues increased nearly 14 percent to $100.6 million from $88.6 million a year earlier. Net loss widened to $69.5 million, or $.16 per share, in the quarter ended March 31, from $67 million, or $.59 per share, a year earlier. 

For the full fiscal year, which ended March 31, 23andMe had revenues of $271.9 million, up 11 percent from the previous year's $243.9 million. Net loss for the year grew 18 percent to $217.5 million from $183.6 in FY 2021.

23andMe went public in June 2021 through a merger with a special purpose acquisition company.

The company said that it added 1.5 million new customers to its core personal genomics service in FY22, bringing its total number of genotyped customers to 12.8 million. Volume of active members of the 23andMe+ subscription service grew to 425,000 in the year ended March 31, more than triple the total of 125,000 at the end of FY21.

23andMe now offers more than 60 different health reports through its personal genomics service after adding reports on skin cancer, diverticulitis, and irritable bowel syndrome during Q4.

Consumer services, including the personal genomics services and now telehealth, represented 83 percent of the revenue total for Q4 and 82 percent for the recently completed fiscal year. The balance of revenue was the result of research services connected to a collaboration with GlaxoSmithKline.

23andMe said in January that it will receive a $50 million payment from GSK after the British pharmaceutical giant opted to extend their drug target-discovery collaboration for an additional year, until July 2023.

In 2018, the companies partnered to use 23andMe's extensive genotype-phenotype database and base of customers willing to donate personal data to identify targets for personalized therapeutics. As part of the initial deal, GSK made a $300 million equity investment in 23andMe.

23andMe also said early this year that it elected to take a royalty option in a Phase I immuno-oncology antibody program targeting CD96 that stems from the partnership. GSK is fully responsible for the drug's development in later-stage clinical trials and will handle all development costs going forward, according to the genetic testing company.

Kenneth Hillan, 23andMe's head of therapeutics, said this week that the company has identified more than 50 targets for drug research by mining its own database.

The firm's therapeutic portfolio includes 23andMe 610, an immuno-oncology compound now in a Phase I trial that targets the CD200R1 protein, which regulates T-cell and myeloid cell function. 23andMe said earlier this year that this and other drug trials will incorporate exploratory biomarker research, including research into polygenic risk scores, to identify best responders.

Hillan said that the company is not immediately interested in gene editing, but would consider a partnership in this area if the right opportunity came along in the longer term.