Q4 2022 23andMe Holding Co. Earnings Call

May 26, 2022

[music].

Good morning and welcome to the 23andMe's fiscal year 2022 fourth quarter and year-end financial results conference call.

Good morning, and welcome to the 23 and me as fiscal year 2022 fourth quarter and year end financial results Conference call.

As a reminder, this call is being recorded.

A reminder, this call is being recorded at this time all participants on listen only mode.

At this time, all participants are in listen-only mode.

After the prepared remarks, there will be a question and answer session.

I would now like to turn the call over to Wade Walk, Vice President of Investor Relations, to lead off the call.

On the call I would now like to turn the call over to Wade Walke, Vice President of Investor Relations to lead off the call. Thank you. Please go ahead.

Thank you.

Please go ahead.

Thank you.

Okay.

Thank you.

Before we begin, I encourage everyone to go to investors.23andme.com to find the press, release we issued earlier today reporting our financial results for the quarter and fiscal year.

Before we begin I encourage everyone to go to investors that 23, <unk> dot com to find the press release, we issued earlier today reporting our financial results for the quarter and fiscal year. A replay of today's webcast will also be available on our website for a limited time within 24 hours. After the event. Please.

A replay of today's webcast will also be available on our website for a limited time within 24, hours after the event.

A replay of today's webcast will also be available on our website for a limited time, within 24 hours after the event.

Please note that certain statements made during this call regarding matters that are not historical, facts, including but not limited to management's outlook or predictions for future periods, are forward-looking statements.

Please note that certain statements made during this call regarding matters that are not historical facts, including but not limited to management's outlook or predictions for future periods are forward looking statements. These statements are based solely on information that is now available to US. We encourage you to review the section entitled forward looking statements in our press release, which applies to this call also please refer to.

These statements are based solely on information that is now available to us. We encourage you to review the section entitled Forward-Looking Statements in our press release, which applies to this call.

These statements are based solely on information that is now available to us.

We encourage you to review the section entitled forward-looking statements in our press release, which applies to this call.

Also, please refer to our SEC filings, which can be found on our website and the SEC's, website, for discussion of numerous factors that may impact our future performance.

Our SEC filings, which can be found on our website and the SEC's website for a discussion of numerous factors that may impact our future performance we.

We also discussed certain non-GAAP measures, important information on our use of these, measures and reconciliation to U.S. GAAP may be found in our earnings release.

We also discuss certain non-GAAP measures. Important information on our use of these measures and reconciliation to U.S. GAAP may, be found in our earnings release.

We also discuss certain non-GAAP measures important information on our use of these measures and reconciliation to U S. GAAP, maybe found in our earnings release.

Joining us on today's call are Anne Wojcicki, our Chief Executive Officer and Co-Founder, Kenneth Hillen, our Chief Therapeutics Officer, and Steve Shook, our Chief Financial Officer.

Joining us on today's call are <unk>, <unk>, our Chief Executive Officer, and co founder Kennon Hilton, Our Chief Therapeutics Officer, and Steve <unk>, Our Chief Financial Officer.

And now I'd like to turn the call over to Anne.

And now I'd like to turn the call over to Ann.

Thank you, Wade.

Thank you Wade.

We are excited about the steps we have taken over the last year, and specifically over, the last several months, to begin to integrate genetics into everyday care with the ultimate goal of making personalized health care a reality. One of the unique aspects of our approach is that 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 Lemonade clinicians.

We are excited about the steps we have taken over the last year and specifically over the last several months to begin to integrate genetics into everyday core with the ultimate goal of making personalized health care a reality.

One of the unique aspects of our approach is that 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 Lemonade Clinicians.

One of the unique aspects of our approach is that we will be able to offer people the ability to access and learned about their DNA.

Then take proactive preventative steps to manage their health and wellbeing guidance for margin now that the train lemonade.

Nearly 20 years ago, as the Human Genome Project was being completed, leaders at the time predicted, that genetics would have the potential to transform how we diagnose, treat, and prevent all human disease.

Nearly 20 years ago as the human genome project was being completed leaders at the time predicted that genetics would have the potential to transform how we diagnose treat and prevent all human disease.

That vision still exists today, but for a number of reasons, such as lack of reimbursement, education, and training, genetics is not widely adopted into care.

So I think this debate for a number of reasons such as lack of reimbursement education and training genetics is not widely adopted into care.

We have the opportunity to partner with customers in the traditional health care world to use, genetic data to truly personalize care.

We have the opportunity to partner with customers in the traditional healthcare world to use, genetic data to truly personalize care.

We have the opportunity to partner with customers and the traditional health care World.

You should have the data to truly personalized care.

We are taking this next step because it is the logical progression of our vision to help, people access, understand, and benefit from the human genome. We have delivered on the first two aspects of our vision, accessibility and understanding, by now offering over 60 health reports in our personal genome service.

We are taking this next step because it is a logical progression of our vision to help people access understand and benefits from the human genome.

We have delivered on the first two aspects of our vision accessibility and understanding.

By now offering over 60 Health report and our personal lives and I am sorry.

We've also grown our customer base to 12.8 million genotyped customers.

We have also grown our customer base to 12.8 million genotyped customers.

<unk> also grown our customer base to $12 8 million genotype to customers.

Our new focus strives to deliver on the third aspect of our vision, to help people benefit, from the human genome.

Our new focused strides to deliver on the third aspect of our vision to help people benefit from the human genome.

We know there is a huge unmet need for preventative healthcare. It has been reported that 40% of deaths from the five leading causes in the U.S. are preventable. Yet accessibility to preventative care remains a problem for most people. We believe that with our first-of-its-kind genomic health service focused on genetics, and personalized health data, we have an opportunity to fill this unmet need and improve people's lives.

We know there is a huge unmet need for preventative health care.

It has been reported that 40% of deaths from the five leading causes in the U S are preventable.

Yet accessibility to preventative care remains a problem from those people.

We believe that with our first-of-its-kind genomic health service focused on genetics, and personalized health data, we have an opportunity to fill this unmet need and improve people's lives.

We believe that with our first of its kind genomic health service focused on genetics and personalized health data, we have an opportunity to fill this unmet need and improve people's lives.

I think everyone knows that health care is not personalized today. In most cases, it's a one-size-fits-all approach. For example, we see guidelines for cancer screening that are primarily based on age, but rarely based on an individual's genetic risk.

I think everyone knows that healthcare is not personalized today. In most cases, it's a one-size-fits-all approach. For example, we see guidelines for cancer screening that are primarily based on age, but rarely based on an individual's genetic risk.

I think everyone knows that health care is not personalized today.

In most cases, it's a one size fits all approach for.

For example, we see guidelines for cancer screening that are primarily based on age, but rarely based on an individual's genetic risk.

Because genetic testing is very rarely used outside of prenatal and cancer care, most, people don't know their genetic risk factors, much less what to do with that information.

Because genetic testing is very rarely use outside of prenatal and cancer care. Most people don't know their genetic risk factors much less what to do with that information.

In addition, more often than not, insurance presents a barrier to accessing genetic testing.

In addition, more often than not insurance presents a barrier to accessing genetic testing.

We also know that our customers have had problems translating information about their genetic, health risk to tangible health benefits and outcomes.

We also know that our customers have had problems translating information about the genomic health risks to tangible health benefits and outcome.

Often they take our genetic health reports to their primary care physicians who largely, don't know how to interpret or act on the information.

Often they take our genetic health reports to their primary care physicians, who largely, don't know how to interpret or act on the information.

Often they take our genetic health reports to the primary care physician, who largely don't know how to interpret or act on the information.

Our efforts on the consumer side will now be focused on building a bridge between health, risk awareness and health risk and disease management with our new genomic health services. Our plan is to support patients from the first touchpoint through a continuum of care, being, the trusted guide.

Our efforts on the consumer side will now be focused on building a bridge between health, risk awareness and health risk and disease management with our new genomic health services.

Our efforts on the consumer side, we will now be focused on building a bridge between health and just awareness and health risks and disease management with our new genomic health services.

Our plan is to support patients from the first touchpoint through a continuum of care, being the trusted guide.

Our plan is to support patients from the first touch point through a continuum of care being the trusted guide.

Over the next few years, we plan to concentrate on the direct-to-consumer self-pay market.

Over the next few years, we plan to concentrate on the direct-to-consumer, self-pay market.

Over the next few years, we plan to concentrate on the direct to consumer self pay market.

Once we establish ourselves in the DTC market, then we can look into growing into other channels.

This effort started with our acquisition and integration of Lemonade Health and their telehealth, and digital pharmacy services.

This effort started with our acquisition and integration of <unk> health and their telehealth and digital pharmacy services.

Our next steps are to roll out our new genomic health services. Just this month, we started data testing a genetic report consultation service with clinicians, who are trained in genetic health concepts. This service provides customers with the opportunity to have genetic report consultations on three, of our genetic health risk reports. These consultations can help customers better understand the potential impact of their genetic, risk profile and discuss the next steps.

Our next steps are to rollout, our new genomic health services.

Just this month, we started beta testing a genetic report consultation service with clinicians who are trained and genetic health concept.

This service provides customers with the opportunity to have now that report consultations on three of our genetic health risk report.

These consultations can help customers better understand the potential impact of their genetic risk profile and discuss the next steps.

This is just the start of our effort in this area, and I'm excited about the broader suite, of services we plan to introduce later this year.

This is just the start of our efforts in this area, and I'm excited about the broader suite, of services we plan to introduce later this year.

This is just the start of our efforts in this area and I'm excited about the broader suite of services, we plan to introduce later this year.

A few notable milestones on the consumer side include the recent expansion of our 23andMe, Plus membership service to customers in the UK and Canada. This service offers insights and features to give members even more actionable information, to live healthier lives.

A few notable milestones on the consumer side includes the recent expansion of our 23 plus membership service to customers in the UK and Canada.

This service offers insights and features to give members even more actionable information to live healthier lives.

We also launched three new reports for customers subscribed to 23andMe Plus, bringing the total, reports available to over 60. The new reports released this last quarter included Skin Cancer, Diverticulitis Report, Irritable Bowel Syndrome Report.

We also launched three new reports for customers subscribe to <unk> plus bringing the total reports available to over 60.

The New reports released just last quarter included skin cancer.

<unk> latest report irritable bowel syndrome report.

On the therapeutic side of our business, we believe we have an advantage in drug target, validation and drug development because we have the world's largest crowd-sourced platform for genetic research.

On the therapeutic side of our business. We believe we have an advantage in drug target validation and drug development, because we have the world's largest crowdsource platform for genomic research.

Research.

Drug development is fraught with failure. About 90% of drugs in development fail to become commercial medicines. However, studies have shown that drugs developed on genetically validated targets are twice, as likely to succeed, and all of our targets are validated using our unique genetic database containing tens of thousands of genetic associations with disease phenotypes.

Drug development is fraught with failure about 90% of drugs in development fail to become commercial medicine.

Drug development is fraught with failure. About 90% of drugs in development, fail to become commercial medicines. However, studies have shown that drugs developed on genetically validated targets are twice as likely to succeed, and all of our targets are validated using our unique genetic database containing tens of thousands of genetic associations with disease phenotypes.

However studies have shown that drugs developed on genetically validated targets are twice as likely to succeed in all of our targets are validated using unique our unique genetic database containing tens of thousands of genetic association with disease phenotype.

Our research platform has generated more than 200 publications on the genetic underpinnings of a wide range of diseases, conditions, and traits, and we've used this research platform to create a pipeline of more than 50 programs, with two now in Phase I clinical trials.

Our research platform has generated more than 200 publications on the genetic underpinnings, of a wide range of diseases, conditions, and traits, and we've used this research platform to create a pipeline of more than 50 programs with two now in Phase I clinical trials.

Our research platform has generated more than 200 publications on the genetic underpinnings of a wide range of diseases conditions and traits and reviewed this research platform to create a pipeline of more than 50 program with two now in phase one clinical trials.

We believe that the therapeutics which come out of our discovery, engine will eventually play a significant role in helping people benefit from the human genome.

We believe that the therapeutics which come out of our discovery engine will eventually, play a significant role in helping people benefit from the human genome.

We believe that the therapeutics, which come out of our discovery engine will eventually play a significant role in helping people benefit from the human genome.

With the combination of our personal genome service, our new genomic health services, and our efforts to develop new therapeutics based on genetically validated targets, we believe we are poised to accomplish the full measure of our mission.

With the combination of our personal genome service, our new genomic health services and our efforts to develop new therapeutics based on genetically validated targets. We believe we are poised to accomplish the full measure of our mission.

I now turn the call over to Kevin to discuss our Therapeutics program.

I now turn the call over to Kenneth to discuss our therapeutics program.

Thanks, Anne.

Thanks Ann.

Here at 23 and me we are passionate about our customer driven research platform and its potential to use insights that could transform therapeutic target discovery drug development and ultimately benefit patients.

Here at 23andMe, we are passionate about our customer-driven research platform, and its potential to yield insights that could transform therapeutic target discovery, drug development, and ultimately benefit patients. Our database is the world's largest crowd-sourced platform for health-related genetic research and has the potential to offer unique insights about diseases and how they can be treated. With this resource, we have the opportunity to understand how changes in a gene affect our risk of disease. This is a very powerful way to identify drug targets, and it has been shown that targets backed by human genetic evidence have a significantly higher chance of becoming medicines than those that do not.

Here at 23andMe, we are passionate about our customer-driven research platform and, its potential to yield insights that could transform therapeutic target discovery, drug development, and ultimately benefit patients. Our database is the world's largest crowdsourced platform for health-related genetic research, and has the potential to offer unique insights about diseases and how they can be treated.

Our database is the world's largest crowdsource platform for health really to genetic research and has the potential to offer unique insights about diseases and how they can be treated.

With this resource, we have the opportunity to understand how changes in a gene affect, our risk of disease.

With this resource we have the opportunity to understand how changes in a gene effector risk of disease.

It is a very powerful way to identify drug targets and this has been shown that targets backed by human genetic evidence have a significantly higher chance of becoming medicines than those that do not.

This is a very powerful way to identify drug targets, and it has been shown that targets, backed by human genetic evidence have a significantly higher chance of becoming medicines than those that do not.

Our investment this last year in therapeutics has enabled us to achieve several key milestones, in our therapeutics business.

Our investments this last year and therapeutics has enabled us to achieve several key milestones in our therapeutics business.

These include advancing 23andMe 610, our first wholly-owned program into the clinic. 610 is an antibody that targets the CD200R1 protein, which is an important regulator of both T-cell and myeloid cell function. CD200R1 was identified as a promising immuno-oncology target from our proprietary genetic immuno-oncology signature that we developed using our large database of genetically-linked phenotypes. We presented data on this program at this year's AACR conference in March.

These include advancing 23andMe 610, our first wholly-owned program, into the clinic. 610 is an antibody that targets the CD200R1 protein, which is an important regulator of, both T-cell and myeloid cell function. CD200R1 was identified as a promising immuno-oncology target from our proprietary genetic immuno-oncology, signature that we developed using our large database of genetically linked phenotypes. We presented data on this program at this year's AACR conference in March.

To conclude.

<unk> 23, <unk>, our first wholly owned program into the clinic.

<unk> is an antibody that targets the <unk> 200, or one protein, which is an important regulator of T cells and myeloid cell function.

CB 200, or one was identified as a promising immuno oncology targets from our proprietary genetics immuno oncology signature.

Developed using our large database of genetically linked phenotypes.

We presented data on this program at this year's ACR Conference in March.

GSK is continuing to advance GSK six zero <unk> in the clinic with plans to test this antibody targeting CD 96 in combination with multiple other immuno oncology drugs.

GSK is continuing to advance GSK608 in the clinic with plans to test this antibody targeting CD96 in combination with multiple other immuno-oncology drugs.

GSK is continuing to advance GSK608 in the clinic with plans to test this antibody targeting, CD96 in combination with multiple other immuno-oncology drugs.

We looked at our option earlier this year to transition to a royalty stake in lieu of continuing to share costs and profits.

We elected our option earlier this year to transition to a royalty state in lieu of continuing to share costs and profits.

We elected our option earlier this year to transition to a royalty state in lieu of continuing, to share costs and profits.

Finally, GSK also exercised their option to extend our discovery collaboration for a further year for an additional $50 million.

And finally, GSK also exercised their option to extend our discovery collaboration for a further year for an additional $50 million. This decision demonstrates GSK's enthusiasm for our collaboration, and the value of our, database provides for identifying and advancing new medicines based on human genetics. Our collaboration with GSK has been very productive, and in less than four years, the collaboration, has identified over 50 therapeutic targets and jointly advanced one program into clinical development.

And finally, GSK also exercised their option to extend our discovery collaboration for, a further year for an additional $50 million. This decision demonstrates GSK's enthusiasm for our collaboration and the value of our, database provides for identifying and advancing new medicines based on human genetics. Our collaboration with GSK has been very productive, and in less than four years, the collaboration, has identified over 50 therapeutic targets and jointly advanced one program into clinical development.

This decision demonstrates gsk's enthusiasm for our collaboration and the value of our database provides for identifying and advancing new medicines based on human genetics.

Our collaboration with GSK has been very productive and then less than four years. The collaboration has identified over 50 therapeutic targets and jointly advanced one program into clinical development.

As we move into this next fiscal year, we plan to continue to advance 23andMe 610 in, clinical development, to progress new candidates in research and preclinical development, and to identify new drug targets from our database as the number of genotype customers and associated phenotypic data continues to grow.

As we move into this next fiscal year, we plan to continue to advance 23andMe610 in, clinical development, to progress new candidates in research and preclinical development, and to identify new drug targets from our database as the number of genotype customers and associated phenotypic data continues to grow.

As we move into this next fiscal year, we plan to continue to advance <unk> in clinical development.

To progress new candidates in research and preclinical development and to identify new drug targets from our database as the number of genotype customers and associated phenotypic data continues to grow.

We believe our growing understanding of human genetics and biology can result in significant, value for patients.

We believe our growing understanding of human genetics, and biology can result in significant value for patients.

Now I'll turn it over to Steve to review our financial results.

Now I will turn it over to Steve to review our financial results.

Thanks, Kenneth.

Thanks Kenneth.

Fiscal year 2022 was a transitional year for 23andMe. It was highlighted by our public listing in June 2021, followed in November by the strategically, important acquisition of Lemonade Health, which now underpins our planned introduction of a genomic health service, as Anne discussed earlier.

Fiscal year 2022 was a transitional year for 23 and me.

It was highlighted by our public listing in June 2021.

Followed in November by the strategically important acquisition of eliminate health, which now underpins our planned introduction of a genomic health service as Anne discussed earlier.

While those were milestone accomplishments for the company, our existing day-to-day operations, also made great progress.

Well those were milestone accomplishments for the company our existing day to day operations also made great progress.

During fiscal 2022, our personal genomic service, or PGS, business increased our customer count, by 1.5 million genotype customers, or 13% to 12.8 million, significantly extending our competitive data advantage.

During fiscal 2022.

Personal genomic service or PGS business increased our customer count by one 5 million genotype customers.

18% to $12 8 million.

Significantly extending our competitive data advantage.

In addition, our active subscriber base in 23andMe Plus grew from 125,000 to 425,000, contributing meaningfully to revenue and gross margin, while also improving on our average customer economics.

In addition, our active subscriber base in 'twenty, three and meet plus grew from 125000 to 425000 contributing meaningfully to revenue and gross margin while also improving on our average customer economics.

Our investments in our therapeutics portfolio have increased our pipeline to more than 50, programs, as Kenneth has told you, and we moved a second 23andMe valid data program into the clinic.

Our investments in our therapeutics portfolio have increased our pipeline to more than 50, programs, as Kenneth has told you, and we moved a second 23andMe validated program into the clinic.

Our investments in our therapeutics portfolio have increased our pipeline to more than 50 program. Just kind of has told you. When we moved the second 23 would be valid David program into the clinic.

Our research services business will be sustained by GSK's election in January to remain our, exclusive data partner for a fifth contract year, which starts in July of 2022 and comes with a $50 million payment, which is double the previous annual payment. This extension is a clear signal of the increased value in our data platform and the insights, it can produce.

Our research services business will be sustained by Gsk's election in January to remain our exclusive data partner for our fifth contract year, which starts in July of 2022, and it comes with a 50 million dollar payment, which is double the previous annual payment.

This extension is a clear signal of the increased value in our data platform and the insights it can produce.

All in all, this was a very productive year, strategically and operationally, and we continue, to build real value.

All in all, this was a very productive year strategically and operationally, and we continue, to build real value.

All in all this was a very productive year strategically and operationally and we continue to build real value.

Now let's turn to financial performance.

Now, let's turn to financial performance.

We'll start off by noting that our 12-month results for the year ended March 31, 2022, were within our previously issued financial guidance ranges. Our revenue for the three and 12 months ended March 31, 2022, with $101 million and $272, million respectively, representing increases of 14% and 11% respectively over the same periods in the prior year. Fourth quarter revenue growth was primarily due to the inclusion of three months of telehealth, revenue and higher research services revenue versus the prior year period. These increases were partially offset by lower PGS revenue.

We'll start off by noting that our 12-month results for the year ended March 31, 2022, were within our previously issued financial guidance ranges. Our revenue for the three and 12 months ended March 31, 2022 was $101,272,000, respectively, representing increases of 14% and 11%, respectively, over the same periods in the prior year. Fourth quarter revenue growth was primarily due to the inclusion of three months of telehealth, revenue and higher research services revenue versus the prior year period. These increases were partially offset by lower PGS revenue.

I will start off by noting that our 12 month results for the year ended March 31, 2022 were within our previously issued financial guidance ranges.

Our revenue for the three and 12 months ended March 31, 2022 was $101 million and $272 million respectively.

Representing increases of 14% and 11% respectively over the same periods in the prior year.

Fourth quarter revenue growth was primarily due to the inclusion of three months of telehealth revenue and higher research services revenue versus the prior year period.

These increases were partially offset by lower PGS revenue.

Twelve-month revenue growth was primarily driven by the inclusion of five months of, telehealth revenue and by increased subscription and research services revenue.

12-month revenue growth was primarily driven by the inclusion of five months of telehealth, revenue and by increased subscription and research services revenue.

12 month revenue growth was primarily driven by the inclusion of five months of telehealth revenue and by increased subscription and research services revenue.

Looking at the composition of our revenue, consumer services revenue, which includes, both our PGS and our telehealth services, represented approximately 83% of total revenue for the three months and 82% of total revenue for the 12 months ended March 31st, 2022, and research services revenue, which was substantially all from the GSK collaboration, accounted for approximately 17% of total revenue for the three months and 18% of total revenue for the 12 months ended March 31st, 2022.

Looking at the composition of our revenue consumer services revenue.

Which includes both our Pts and our telehealth services represented approximately 83% of total revenue for the three months and 82% of total revenue for the 12 months ended March 31 2022.

And research services revenue, which was substantially all from the GSK collaboration, accounted, for approximately 17% of total revenue for the three months and 18% of total revenue for the 12 months ended March 31, 2022.

And research services revenue, which was substantially all from the GSK collaboration accounted for approximately 17% of total revenue for the three months and 18% of total revenue for the 12 months ended March 31 2022.

The gross profit for the three and 12 months ended March 31st, 2022, was $47,133,000,000, respectively, representing a 6% and 14% increase over the same periods in the prior year.

Our gross profit for the three and 12 months ended March 31, 2022 was $47,133,000,000, respectively, representing a 6% and 14% increase over the same periods in the prior year.

Gross profit for the three and 12 months ended March 31, 2022 was $47 million and $133 million, respectively, representing a 6% and 14% increase over the same periods in the prior year.

The improvement in fourth quarter gross profit was driven by the increased revenues previously, mentioned while the 12-month period additionally benefited from cost efficiencies within PGS cost of sales.

The improvement in fourth quarter gross profit was driven by the increased revenues previously, mentioned, while the 12-month period additionally benefited from cost efficiencies within PGS cost of sales.

Improvement in fourth quarter gross profit was driven by the increased revenue as previously mentioned, while the 12 month period. Additionally benefited from cost efficiencies within PGS cost of sales.

Operating expenses for the three and 12 months ended March 31st, 2022, were $117,387,000,000, respectively compared to $112,302,000,000 for the same period as the prior year. The increase in operating expenses for both periods was attributable to several factors, including increased sales and marketing expenses consistent with the promotional activities of the PGS business, the addition of telehealth operational expenses, increased therapeutics related research and development expenses, a one-time net litigation settlement payment, and in the case of the 12-month period, one-time transaction costs associated with the acquisition of Lemonade Health.

Operating expenses for the three and 12 months ended March 31, 2022 were $117,387,000,000, respectively, compared to $112,302,000,000 for the same period as the prior year. The increase in operating expenses for both periods was attributable to several factors, including increased sales and marketing expenses consistent with the promotional activities of the PGS business, the addition of telehealth operational expenses, increased therapeutics related research and development expenses, a one-time net litigation settlement payment, and in the case of the 12-month period, one-time transaction costs associated with the acquisition of Lemonade Health.

Operating expenses for the three and 12 months ended March 31 2022.

There were $117 million and $387 million, respectively, compared to $112 million and $302 million.

For the same periods of the prior year.

The increase in operating expenses for both periods is attributable to several factors, including increased sales and marketing expenses consistent with the promotional activities of the PGM business.

The addition of telehealth operational expenses.

Increased therapeutics related research and development expenses.

A one time net litigation settlement payment.

And in the case of the 12 month period, one time transaction costs associated with the acquisition of eliminate health.

Looking at the bottom line, net loss for the three and 12-month periods ended March, 31st, 2022, was $70,217,000,000 respectively compared to net losses for the same period in the prior year of $67,184,000,000 respectively.

Looking at the bottom line, net loss for the three and 12-month periods ended March, 31, 2022 was $70,217,000,000, respectively, compared to net losses for the same period in the prior year of $67,184,000,000, respectively.

Looking at the bottom line net loss for the three and 12 month periods ended March 31, 2000, $20 million to $70 million and $217 million, respectively compared to net losses for the same period in the prior year of $67 million and $184 million respectively.

The increase in net loss for the three and 12-month periods were primarily driven by, higher operating expenses as noted earlier and in the case of the 12-month period by a favorable change in fair value of warrant liabilities of $33,000,000.

The increase in net loss for the 3 and 12 month periods were primarily driven by higher, operating expenses as noted earlier, and in the case of the 12 month period, by a favorable change in fair value of warrant liabilities of $33 million.

The increase in net loss for the three and 12 month periods were primarily driven by higher operating expenses as noted earlier and in the case of the 12 month period.

The favorable change in fair value of warrant liabilities of $33 million.

Yeah.

Next let us look at our adjusted EBITDA. For details about how we define adjusted EBITDA and related reconciliations, please see our, earnings press release.

Next let us look at our adjusted EBITDA. For details about how we define adjusted EBITDA and related reconciliations, please see our, earnings press release. Total adjusted EBITDA for the 3 and 12 months ended March 31st, 2022, with a deficit of, $30 million and $151 million, respectively, compared to deficits for the same period in the prior year of $11 million and $77 million, respectively.

Next let us look at our adjusted EBITDA for details about how we define adjusted EBITDA and related reconciliations. Please see our earnings press release.

Total adjusted EBITDA for the three and 12 months ended March 31st, 2022, with a deficit, The increase in total adjusted EBITDA deficit was driven primarily by the increase in operating expenses mentioned previously.

The increase in total adjusted EBITDA deficit was driven primarily by the increase in operating, expenses mentioned previously.

Total adjusted EBITDA for the three and 12 months ended March 31, 2022 was a deficit of $30 million.

And $151 million, respectively compared to deficits for the same period in the prior year of $11 million and $77 million respectively.

The increase in total adjusted EBITDA deficit was.

Driven primarily by the increase in operating expenses mentioned previously.

Looking specifically at the adjusted EBITDA for the 3 and 12 months ended March 31, 2022, for the consumer and research services segment, we saw a surplus of $3 million for the fourth quarter and a deficit of $30 million for the full year, compared to surpluses in the same period in the prior year of $18 million and $13 million, respectively. We note that quarterly adjusted EBITDA for the consumer and research services segment, has exhibited seasonal variation, just as the segment's top line does, and is impacted by factors including TGS revenue recognition timing and the pattern of our media spending, which has varied over time.

Looking specifically at the adjusted EBITDA for the 3 and 12 months ended March 31st, 2022, for the consumer and research services segment, we saw a surplus of $3 million for the fourth quarter and a deficit of $30 million for the full year, compared to surpluses in the same periods in the prior year of $18 million and $13 million, respectively. We note that quarterly adjusted EBITDA for the consumer and research services segment, has exhibited seasonal variation, just as the segment's top line does, and is impacted by factors including TGS revenue recognition timing and the pattern of our media spending, which has varied over time.

Looking specifically at the adjusted EBITDA for the three and 12 months ended March 31, 2022 for the consumer and research services segment.

We saw a surplus of $3 million for the fourth quarter and a deficit of $30 million for the full year compared to surpluses in the same periods in the prior year of $18 million and $13 million respectively.

We note that quarterly adjusted EBITDA for the consumer and research services segment has exhibited seasonal variation.

Just as the segment's top line does and.

And is impacted by factors, including PGS revenue recognition timing in the pattern of our media spending which has varied over time for this reason, we focused manager really on our full year adjusted EBITDA performance.

For this reason, we focus managerially on our full year adjusted EBITDA performance. The full year adjusted 2022 EBITDA deficit in this consumer and research services segment, versus prior year surplus was driven primarily by the previously mentioned increase in sales and marketing expenses, as well as the impact from inclusion of five months of telehealth results.

Full year adjusted 2022, EBITDA deficit in this consumer and research services segment versus prior year surplus was driven primarily by the previously mentioned increase in sales and marketing expenses as well as the impact from inclusion of five months of telehealth results.

We will continue to work towards returning the consumer and research services segment, to cash flow break even and above over time as we expand our consumer offerings with our new genomic health services. We ended the quarter with a solid balance sheet, including $553 million in cash, which, provides us with sufficient capital to continue to advance both segments.

We will continue to work towards returning the consumer and research services segment to cash flow breakeven and above over time as we expand our consumer office offerings with our new genomic health services.

We ended the quarter with a solid balance sheet, including $553 million in cash, which provides us with sufficient capital to continue to advance both segments.

Now let's turn to our updated guidance.

Now, let's turn to our updated guidance.

Our full year fiscal 2023 guidance is based on a conservative approach to planning, recognizing, the current uncertainties in the general economy and in financial markets.

Our full year fiscal 2023 guidance is based on a conservative approach to planning.

Recognizing the current uncertainties in the general economy and in financial markets.

Within the existing consumer businesses of PGS and telehealth, we are prioritizing the, minimization of adjusted EBITDA deficit rather than maximizing top line growth.

In the existing consumer businesses of TGS and telehealth, we are prioritizing the minimization, of adjusted EBITDA deficit rather than maximizing top line growth.

Within the existing consumer businesses of PGS in telehealth, we're prioritizing the minimization of adjusted EBITDA deficit, rather than maximizing top line growth.

For those business segments expected to drive future growth, which include the company's, new genomic health services and our therapeutics business, we plan to focus on the most strategically and financially valuable options and invest appropriately in each.

For those business segments expected to drive future growth, which includes the company's new genomic health services and our therapeutics business, we plan to focus on the most strategically and financially valuable options and invest appropriately in each.

Because the new genomic health service is not anticipated to fully launch until later, in the fiscal year, we do not foresee meaningful revenue contribution from these new consumer products and services within fiscal year 2023.

Because the new genomic health service is not anticipated to fully launch until later in the fiscal year, we do not foresee meaningful revenue contribution from these new consumer products and services within fiscal year 2023.

As a reminder, our fiscal year 2023 guidance carries the full year impact of the consolidation, of the telehealth business into the company's overall consumer segment, which is only five months in fiscal year 2022, as well as including the current and anticipated effects of general inflation on certain of our costs.

As a reminder, our fiscal year 2023 guidance carries the full-year impact of the consolidation, of the telehealth business into the company's overall consumer segment, which is only five months in fiscal year 2022, as well as including the current and anticipated effects of general inflation on certain of our costs.

As a reminder, our fiscal year 2023 guidance carries the full year impact of the consolidation of the telehealth business into the Companys overall consumer segment versus only five months in fiscal year 2022.

As well as including the current and anticipated effects of general inflation on certain of our costs.

With that as background, we are projecting full year revenue for fiscal year 2023, which, will end on March 31st of 2023, to be in the range of $260 to $280 million.

With that as background, we are projecting full-year revenue for fiscal year 2023, which, will end on March 31st of 2023, to be in the range of $260 to $280 million. We are projecting full-year gap net loss to be in the range of $350 to $370 million. And finally, we are projecting our consolidated full-year adjusted EBITDA deficit to be in, the range of $195 to $215 million.

With that as background, we are projecting full year revenue revenue for fiscal year 2023.

Which will end on March 31 of 2023 to be in the range of $260 million to $280 million.

We are projecting full year gap net loss to be in the range of $350 to $370 million. And finally, we are projecting our consolidated full-year adjusted EBITDA deficit to be in, the range of $195 to $215 million.

We are projecting full year GAAP net loss to be in the range of $350 million to $370 million.

And finally, we are projecting our consolidated full year adjusted EBITDA deficit to be in the range of $195 million to $215 million.

With that, I will now turn the call back over to Anne.

With that I will now turn the call back over to Ann.

Thank you, Steve.

Thank you Steve.

As you can see, we have a big agenda for the coming year.

As you can see we have a big agenda for the coming year. We are excited for the challenge and for the opportunity.

We are excited for the challenge and for the opportunity.

Our success in this endeavor is a win for millions of people.

Our success in this endeavor as they win for millions of people.

Now let's open it up for questions.

Now, let's open it up for questions.

At this time, to ask a question, please press star 1 on your touch-tone phone.

Okay.

At this time to ask a question. Please press star one on your Touchtone phone.

If you would like to get out of the queue, please press the pound key.

If you like to get out of the queue. Please press the pound key.

Once again, that's star 1 for questions.

Once again, that's star 1 for questions, star 1.

Next one for questions are one.

Star 1.

Our first question will come from the line of Tiago Fauth from Credit Suisse.

Our first question comes from the line of Thiago <unk> from Credit Suisse. Your line is open.

Your line is open.

Thanks for taking the question.

Thanks for taking my question. So just two quick ones for me. So the first one is just on cash burn expectations for two three years or perhaps your current cash position and how much runway does that volume given the current operational plan.

Just two quick ones for me.

The first one is just on cash run expectations for 2023 or perhaps your current cash position, and how much runway does that buy you given the current operational plan.

And I have a couple of questions on the therapeutic side, just any thoughts on any read through from this MTGE readouts across the space to the cdna six asset.

I have a couple of questions on the therapeutic side, just any thoughts on any read-through, from recent TGIT readouts across the space to the CD96 asset.

And I have a couple of questions on the therapeutic side, just any thoughts on any read-throughs, from recent TGIT readouts across the space to the CD96 asset and any expectations of additional programs perhaps entering a clinic now that you have 50 active programs.

Any expectations of additional programs perhaps entering a clinic now that you have 50 active, programs?

And then expectations up additional progress perhaps centering in clinic now that you have 50 active programs.

I know it's hard to have visibility, but what could be a reasonable place going forward?

I know it's hard to have visibility, but what could be a reasonable base going forward?

So it's hard to have visibility, but what could be a reasonable base going forward. Thank you.

Thank you.

Thanks, Tiago.

Let me hand that to Steve to answer the first part and obviously Kenneth for the second.

Thanks, Thiago, let me hand that puts Steve to answer the first part and obviously kind of the segment.

Yes, sure.

Yeah, sure.

Yes sure so.

Starting with the $553 million balance that we talked about, you can kind of put that, side-by-side with the adjusted EBITDA operating cash flow guidance of 195 to 215, and it gives you a sense of kind of what that runway is in terms of if that were the sustained kind of burn rate for the next couple of years.

So, you know, starting with the $553 million balance that we talked about, you can kind, of put that side-by-side with the adjusted EBITDA, the operating cash flow guidance of 195 to 215, and it gives you a sense of kind of what that runway is in terms of if that were the sustained, you know, kind of burn rate for the next couple of years.

Starting with the $553 million balance that we've talked about.

You can kind of put that side by side with the adjusted EBITDA operating cash flow guidance of 295 to $2 15, and it gives you a sense of kind of what that runway is in terms of if that were the sustained.

Burn rate for the next couple of years.

You can kind of look at that.

And so you can kind of look at that.

And so you can kind of look at that we only give guidance for this one year.

We only give guidance for this one year on that front.

On that front.

More generally, I would say this configuration gives us a certain amount of time flexibility, as we think about funding the company in the future.

More generally, I would say, you know, this configuration gives us a certain amount of, time flexibility as we think about funding the company in the future.

But more generally I would say.

This.

Configuration gives us a certain amount of time flexibility.

As we think about funding the company in the future and I think.

I think even though we do have some benefit of time, as appropriate, we'll look at every, option that makes sense for us to think about a next funding for this company.

And I think even though we do have some benefit of time, you know, we're, you know, as appropriate, We will look at every option that makes sense for us to think about a next funding for this company and I think we will be opportunistic over time because we do have the benefit of time and that is kind of the way we are looking at it right now.

Even though we do have.

Some benefit of time.

As appropriate.

We'll look at every option that makes sense for us to think about.

Our next funding for this company.

And I think we'll be opportunistic over time, because we do have the benefit of time.

I think we'll be opportunistic over time because we do have the benefit of time, and that's, kind of the way we're looking at it right now.

It's kind of the way we're looking at it right now.

Kenneth?

Thanks, Steve.

Sure.

Thanks, Anne.

Tiago, maybe I can just talk, first of all, I think you asked about kind of recent data.

Thiego, maybe I can just talk, first of all, I think you, asked about kind of recent data.

Alright, Thanks, Steve Yes, sure. Thanks, Ed, Yes, Diego, maybe I can just.

Talk first of all just I think you asked about kind of recent data.

One of the pieces of data was Roche reporting data for their antigen antibody, both in a, trial in small-cell lung cancer, and then a second trial in non-small-cell lung cancer. In the small-cell lung cancer trial, that was a negative study.

Pieces of data was Roche reported.

Data further anti <unk> antibody.

One of the pieces of data was Roche reported data for their anti-tigid antibody both in a trial in small cell lung cancer and then a second trial in non-small cell lung cancer. In the small cell lung cancer trial, that was a negative study.

Both of the trial in small cell lung cancer. The second trial in non small cell lung cancer small cell lung cancer trial that was a negative study.

In the non-small-cell lung cancer, the study, as you know, didn't meet its co-primary endpoint, of progression-free survival, so it's clearly, you know, I think a bit of a disappointment there that Roche did say, and it's obviously hard to interpret, but they did say that, you know, this first analysis, the OS data was immature.

In the non-small cell lung cancer, the study, as you know, did not meet its co-primary end point of progression-free survival.

And then non small cell lung cancer study as you know it didn't meet its co primary endpoint of progression free survival.

So it's clearly I think a bit of a disappointment there that Roche did see it's obviously hard to interpret but you did say that this first analysis.

So, it is clearly, you know, I think a bit of a disappointment there that Roche did say, and it is obviously hard to interpret, but they did say that, you know, this first analysis, the OS data was immature.

Speaker was immature the study is continuing.

The study is continuing, and they also noted there was a numerical improvement in both, of the co-primary endpoints.

The study is continuing and they also noted there was a numerical improvement in both of the co-primary end points.

And they also noted that wasn't numerical improvement in both of the co primary endpoints. So I think we'll just have to wait and see how the data continues to emerge.

So I think we'll just have to wait and see how that data continues to emerge.

So, I think we will just have to wait and see how that data continues to emerge.

Research.

In terms of what that means for the CD96 program, you know, as you know from our immuno-oncology, signature, the genetics in that pathway are around CD226.

In terms of what that means for the <unk> 96 program.

In terms of what that means for the CD96 program, you know, as you know from, our immuno-oncology signature, the genetics in that pathway are around CD226.

You know from our immuno oncology signature.

The genetics in that path, we are around <unk> six and so one of the things that GSK had invested in not just the <unk>.

And so, one of the things that GSK had invested in, not just the collaboration program we had with them on CD96, but also in anti-tiget antibodies with ITOS, and then also an anti-PB rig antibody with surface oncology.

And so, one of the things that GSK had invested in, not just the collaboration program we had with them on CD96, but also, in anti-tiget antibodies with ITOS, and then also an anti-PBRIG antibody with surface oncology.

Libraries program, we had with them on Cte 96, but also in anti <unk> antibodies with it.

And then also and then TPB rig antibody.

And I think, you know, one of the potentially interesting things is the ability to really drug multiple parts of that pathway.

And I think, you know, one of the potentially interesting things is the ability to really, drug multiple parts of that pathway.

With the surface oncology.

I think one of the potentially interesting things is the ability to really drug multiple parts of that pathway.

See the next six antibody as you know continues in phase one GSK is now leading that.

You know, the CD96 antibody, as you know, continues in phase one.

GSK is now leading that, and they will really be responsible for communication plans moving forward, but hopefully at least that summary is helpful.

He will be responsible for communication plans moving forward, but hopefully we expect somebody is helpful.

Got it that makes sense I appreciate that thanks.

And then you asked about kind of where things were in the pipeline again in part because of the GSK collaboration there's not a great deal that we can say about progress, but obviously, we do have.

GSK is now leading that, and they will really be responsible for communication plans moving forward.

So we've identified 50 targets from that database. So we have many programs in our portfolio.

So I think I remain optimistic about continuing to advance.

<unk>.

But we haven't provided any further guidance on when we would expect next IND or phase one program, we're really working very hard on very excited about the <unk> one program.

As you know starting therapy studies in January of this year.

Yeah, no, that makes sense.

Got it that makes sense. Thanks again for taking the question.

But hopefully, at least that summary is helpful.

Appreciate that.

Our next question will come from the line of Daniel <unk> from Citi. Your line is open.

Yeah, no, that makes sense.

Thanks.

Appreciate that.

And then you asked about kind of where things were in the pipeline.

Again, in part because, of the GSK collaboration, there's not a great deal that we can say about programs, but obviously we do have – so, we've identified 50 targets from the database.

Hi, guys. Thanks for taking the question.

If I can go back to guidance for 'twenty three.

Thanks.

And it helps kind of bridge some of these numbers for me. So it seems like your tight trading growth down as you focus more on profitability, which makes a lot of sense.

And then you asked about kind of where things were in the pipeline.

Again, in part because of the GSK collaboration, there's not a great deal that we can say about programs, but obviously, we do have – so we've identified 50 targets from the database, so we have many programs in our portfolio.

And so, I think, you know, I remain optimistic about continuing to advance those, but we, haven't provided any further guidance on when we would expect, you know, next IND or next phase one program.

We're really working very hard and very excited about the CD200R1 program, which is, you know, starting phase one studies in January of this year.

So revenue at the midpoint is effectively flat, but it does also include a full year of lemonade revenue. So kind of that core organic revenue is going to be down for the year.

Yeah, no, that makes sense.

Thanks again for taking the question.

And then adjusted EBITDA loss is also increasing by around $50 million for the mid point. So it doesn't seem like you are getting the immediate impact of tight trading some of the consumer growth down so I assume that.

The B b.

Increase in the loss is due to <unk>.

Increased.

Therapeutics and in this new genomic health service investment, but maybe if you could put a finer point on that and help bridge between the slowdown in revenue growth organically and.

The expansion of a loss of <unk> 23.

Thank you.

So, we have many programs in our portfolio.

Absolutely, let me hand the papers.

And so, I think, you know, I remain optimistic about continuing to advance those, but we haven't provided any further guidance on when we would expect, you know, next IND or next phase one program.

We're really working very hard and very excited about the CD200R1 program, which, as you know, started phase one studies in January of this year.

Our next question will come from the line of Daniel Grossleit from Citi.

Got it.

Your, line is open.

Yes for sure.

Hi, guys.

So.

Thanks for taking the question.

Maybe if we can go back to guidance for 23, and help kind of bridge some of these numbers for me.

As you noted the topline comes with a full 12 months versus five months of this year of the top line of Telehealth. It also comes with a full year.

The bottom line of telehealth, So thats part of what gives rise to that difference and thats.

That will hit the consumer research services segment components of EBITDA.

So, it seems like you're titrating growth down as you focus more on profitability, which makes a lot of sense.

And and.

And as you noted.

We have.

Our continually growing.

So, revenue at the midpoint is effectively flat, but it does also include a full year of lemonade revenue, so kind of that core organic revenue is going to be down for the year.

And then adjusted EBITDA loss is also increasing by around $50 million for the midpoint, so it doesn't seem, like you're getting the immediate impact of titrating some of the consumer growth down.

Investment on the therapeutic side, that's giving rise to a part of that the other thing thats going on here is that we have.

We have just the inflationary costs on our labor base, which is running at a higher rate.

In terms of merit and promo and all of those things across the entirety of the company.

During this inflationary time and so that's that's going to run really throughout the business.

So.

And then in terms of like specifically how the.

Work that we'll do to launch new products, while there will be some modest incremental hiring.

I think I think the effects of actually getting that launched and getting that out there.

Won't be as big of an impact for instance is just taking on the full 12 months of the telehealth business.

Operating expenses and that sort of thing so just to put those in relativity.

So, I assume that, you know, the increase in the loss is due to increased therapeutics, and this new genomic health service investment, but maybe if you could put a finer point on that and help bridge between the slowdown in revenue growth organically and the expansion of the loss in 23.

Yeah. That's helpful. Okay, and I just want to understand that this new genomic health service a little bit better.

Is this the service that connects the 23 and me.

Port Readouts with eliminate.

Provider.

Or is this something in addition to.

Eliminate provider that youre going to be investing in.

Absolutely.

It is really about connecting the first step I would say, it's really about connecting our.

Our customers as well as future customers.

With a care provider, if they want to be able to best interpret.

Just help with the information and I think part of that also gets people onto a plan for how do you actually implement this information in Chile. So we.

Look at.

Also as part of our spec process, beginning with the subscription product and how do we actually really enhance that more and more with kind of eliminate acquisition with access to the health care providers as well as the pharmacy component.

Being able to really do pharmacogenetics so.

We recently launched a very data product with a couple of reports, giving access to care and I think you can imagine that we will have a more comprehensive offering.

Later and later in the year early next year.

With respect to how do we really.

Our customers and future customers get access to a care provider.

Yes.

It followed a whole kind of plan.

No, that makes sense.

Thanks again for taking the question.

That makes sense and so what would be economic model there be would have like a button on may 23 in the App that says connect to a care provider and then you charge me 50 bucks or something for that or is it subscription how are you thinking about monetizing that.

Thank you.

Our next question will come from the line of Daniel Grossleit from Citi.

Your, line is open.

Hi, guys.

Thanks for taking the question.

Maybe we can go back to guidance for 23 and, help to kind of bridge some of these numbers for me.

Yes, I mean, I think thats youre tapping I think that is what is happening today. So I don't know if it's not rolled out to a 100% of our customers, but there is beta testing right now with some of our customers, saying what type of what.

Are the types of services you want to get like I said I think that you can expect us to be doing and investing a lot more work into our subscription programs.

So I think that's where fundamentally when I think back on the last 16 years with the company.

And our engagement rates, we have incredibly high engagement people come back over and over again, so there's clearly a demand or people want more and so when I think about the ability for us to provide care services, it's not always.

Having to talk to a coach but it could be various online services that are.

Directed by a medical professional that.

That help you really take advantage of the information and again the focus for US really has been an unmet need of prevention.

And if you look at a lot of our report they really help people open up the door to saying you know you don't yet have a condition that you have the opportunity to potentially prevent so how can we now helping implement that into your life.

Yes, Okay, and then on the lemonade piece of the business outside of this new service that you're you're building out, but kind of the core eliminate or I would say legacy eliminate.

Theres, obviously been a lot of it.

Steve You mentioned this to inflation.

And tax and it's especially when Youre talking about marketing direct to consumer in some of the social.

And search channels.

It has weighed on all of the DTC oriented.

Company results, how are you thinking about spend.

In some of the the eliminate legacy eliminate channels to acquire customers, particularly the mental health and in some of these other very competitive spaces, which has really deteriorated unit economics in this space.

Let me hand it to you, Steve, first.

Yes, let me answer that to begin with and then hand it over to Steve.

Yeah, for sure.

I would say the reason the reason again, perhaps buying lemonade, because we need to get that infrastructure and all those pieces in place. So that we can execute on genomic medicine and I, absolutely think I hear you in terms of CAC going up and it's more competitive differentiator that 20 <unk> has is to.

Connection to your genome and the 13 million customers. We have that are quite engaged so when I think about the opportunity for us, it's really about delivering personalized care personalized recommendation that integrate genomic information and there is no one else really in a position to do that.

Steve do you want to jump in if there's anything else specific in terms of members.

So the number one category that we focused on at the increment and setting up the <unk>.

Plan for this year and as.

As I mentioned in the in the guidance I mean, we're.

We're not planning on anything material coming from the new businesses this year.

You can get those built and tested and rolled out.

And so were the legacy businesses as they're currently configured are the are the drivers of the top line and the way that we're resourcing them.

And and there is inflation in media spend and we've taken that into account and looking at the efficacy of our media spend and I think will be will be.

<unk> that back a little bit.

Yeah, so, you know, as you noted, the top line comes with a full 12 months, versus just five months of this year of the top line of telehealth.

So, it seems like you're titrating growth down as you focus more on profitability, which makes a lot of sense.

It also comes with a full year of the bottom line of telehealth, so that's part of what gives rise to that difference, and that's, you know, that'll hit the consumer research services segment component of EBITDA.

As you noted.

And as we've talked about we're emphasizing.

Cash efficiency in this business over just pure topline growth this.

And as you noted, you know, we have, you know, a continually growing investment on the therapeutic side that's giving rise to part of that.

So, revenue at the midpoint is effectively flat, but it does also include a full year of lemonade revenue.

The other thing that's going on here is that we have, you know, we have just the inflationary costs on our labor base, which, you know, is running at a higher rate in terms of merit and promo and all of those things across the entirety of the company, you know, during this inflationary time, and so that's going to run really throughout the business.

And so, and then in terms of like specifically how the work that we'll do to launch the new products, while there will be some modest incremental hiring, you know, I think the effects of actually getting that launched and getting that out there, you know, won't be as big an impact, for instance, as just taking on the full 12 months of the telehealth business, you know, operating expenses and that sort of thing.

So, kind of that core organic revenue is going to be down for the year.

This year, yes.

And then adjusted, EBITDA loss is also increasing by around $50 million for the midpoint.

Got it and last one for me and I'll hop back in the queue here just on the CD 96 asset are you still expecting a.

So, it doesn't seem like you're getting the immediate impact of titrating some of the consumer growth down.

A readout this year Con <unk> 96.

GSK filed.

Or no download latest call that it's still kind of pushed out a little bit but that might be a different combo trials. So I'm. Just curious if that CD 96 readout is still expected for for this year.

Kenneth.

Yes, so sure happy to do that so I think as you know GSK is now is solely responsible for the continued development of GSK 608 against 96, and so they are going to be responsible for communicating their plans.

But what I think we can say is that the studies continue to enroll and so I really don't have further details on that.

Okay. Thank you.

Thank you.

Showing any further question in queue at this moment I would like to turn the call over to Wade for any additional comments.

So just to put those in relativity.

So, I assume that, you know, the increase in the loss is due to increased therapeutics, and this new genomic health service investment.

But maybe if you could put a finer point on that and help bridge between the slowdown in revenue growth organically and the expansion of the loss in 2030.

Thank you Victor we have a few questions from investors through our online platform.

Yes.

I'm going to take some of the tough questions here and we'll answer these.

And I just want to understand this new genomic health service a little bit better.

The first question is what are the future plans between <unk> me, if you have ideas for creating future products and do you have any plan to monetize your current products.

Yes, I can take that and I think if I tap suggests.

That program I mean, we definitely feel like there's an amazing opportunity to evolve the product and I would say the rise of telemedicine.

As you noted, the top line comes with a full 12 months versus just 5 months of this year, of the top line of telehealth.

It also comes with a full year of the bottom line of telehealth, so that's part of what, gives rise to that difference, and that will hit the consumer research services segment component of EBITDA, and as you noted, we have a continually growing investment on the therapeutic side that's giving rise to part of that.

The other thing that's going on here is that we have just the inflationary costs on our, labor base, which is running at a higher rate in terms of merit and promo and all of those things across the entirety of the company during this inflationary time, and so that's going to run really throughout the business, and so in terms of specifically how the work that we'll do to launch the new products, while there will be some modest incremental hiring, I think the effects of actually getting that launched and getting that out there won't be as big an impact, for instance, as just taking on the full 12 months of the telehealth business, operating expenses, and that sort of thing, so just to put those in relativity.

Online pharmacy.

Yeah, that's helpful.

Has really opened up the door, where people are comfortable and used to in this kind of interaction with health care providers. So we have always seen with Arizona how can we.

Okay, and I just want to understand this new genomic health service a little bit better.

Is this the service that connects the 23andMe report readouts with a Lemonade provider, or is this something in addition to a Lemonade provider that you're going to be investing in?

Serve our customers by giving them a genetic information in the next helping the next steps they can take.

Is this the service that connects the 23andMe report readouts with a Lemonade provider?

And then a challenge with.

Citizens, having a lack of reimbursement on concepts around genetics and.

Or is this something in addition to a Lemonade provider that you're going to be investing, in?

It is really about connecting.

Lack of training. So we have this opportunity now to really create a full stack.

The first step, I would say, is really about connecting our customers as well as future, customers with a care provider if they want to be able to best interpret, to best help with the information, and I think part of that also gets people onto a plan for how do you actually now implement this information into your life, so we look at, we said this also as part of our SPAC process, like the beginnings with the subscription product, and how do we actually really enhance that more and more with part of the Lemonade acquisition with access to the healthcare providers as well as the pharmacy component and being able to really do pharmacogenetics, so we recently launched a very beta product with a couple reports giving access to care, and I think you can imagine that we will have a more comprehensive offering later in the year, early next year, with respect to how do we really help our customers and future customers get access to a care provider, to follow the whole kind of plan.

That's where people can get access to the information they can learn about it.

Ongoing information.

We will help them integrate it and as well as they will have direction on health care providers. So I think theres, a real opportunity how difficult back really integrated.

It is really about connecting.

That makes sense, and so what would the economic model there be, would I have like a button, on my 23andMe app that says connect to a care provider and then you charge me $50 or something for that, or is it a subscription, how are you thinking about monetizing?

And.

That's what we are focused really on building out for the next year.

Thanks. Our next question is how are we planning to compete with ancestry and their subscription revenue our customers seem to be one and done without much incentive for additional spending how are we addressing this.

The first step, I would say, is really about connecting our customers as well as future, customers with a care provider if they want to be able to best interpret, to best help with the information.

I would say we're quite different from ancestry ancestry really it's solving a specific which is about getting your records and while <unk> has a significant ancestry component about finding your relatives.

And I think part of that also gets people onto a plan for how do you actually implement, this information into your life.

I would say that what we're very much focused on the larger market, which is the health market.

Or is it that people can continue to learn about themselves learn about important health information atlas's discovering as it comes out and then really integrate that in our life and so when we see the customer engagement levels that we have people come back obviously for new relatives.

the company and our engagement rate, we have incredibly high engagement, people come back over and over again and so there's clearly a demand where people want more and so when I think about ability for us to provide care services, it's not always, you know, having, to talk to a coach but it could be various online services that are, you know, directed by a medical professional that help you really take advantage of the information.

And again, the focus for us really has been on sort of that unmet need of prevention and, if you look at a lot of our reports, they really help people open up the door to saying, you know, you don't yet have a condition but you have the opportunity to potentially prevent.

So how can we now help you implement that into your life?

But they really come back as well as setting health reports, so more and more emphasize on that way and I think that there as well, but while ancillary and 'twenty chimney, both leveraged genetic information we leveraged it for various different purposes, and I would say the health market from all of the analysis, we've done appears to be a larger market.

Yep, okay.

And then on the lemonade piece of the business outside of this new service that you're building, out but kind of the core lemonade or I would say legacy lemonade, there's obviously been a lot of, and Stevie mentioned this too, inflation in CACs and especially when you're talking about marketing direct to consumer and some of the social and search channels that has weighed on all of the kind of DTC-oriented company results.

How are you thinking about spend in some of the legacy lemonade channels to acquire customers, particularly mental health and some of these other very competitive spaces which has really deteriorated unit economics in this space?

Yeah, let me answer that to begin with and then hand it over to Steve.

I would say the reason, again, for us buying lemonade was really to get that infrastructure, and all those pieces in place so that we could execute on genomic medicine.

And I absolutely, like I hear you in terms of, you know, CAC going up and it's more competitive.

The differentiator that 23andMe has is the connection to your genome and the 13 million, customers we have that are quite engaged.

So when I think about the opportunity for us, it's really about delivering personalized, care, personalized recommendations that integrate genetic information, and there's no one else really in a position to do that.

Steve, do you want to jump in if there's anything else specific in terms of numbers?

Thank you.

It's the number one category that we focused on at the increment in setting up the plan for this year.

And, you know, as I mentioned in the guidance, I mean, we're not planning on anything material, coming from the new businesses this year as Ann and the team get those built and tested and rolled out.

Next question is as <unk> has already experienced in the field of genotype and DNA are you at all interested in investing in the gene editing field of partnering with a company involved in this space.

And so the legacy businesses as they're currently configured are the drivers of the top line and the, way that we're resourcing them.

And there is inflation in media spend. And we've taken that into account in looking at the efficacy of our media spend.

And I think we'll be, you know, dialing that back a little bit.

As you noted, and as we've talked about, we're emphasizing, you know, cash efficiency in this, business over just your top line growth, this year.

What I would actually look to Kenneth gene editing is a phenomenal tool that I could see one day definitely having applicability with our with our therapeutics team. So I don't know if theres anything else you want to add to that cannot but.

It's a great tool that we can potentially leverage one day offer.

All kinds of research.

Yes, so happy to respond.

Very exciting space I think as people know in the CRISPR Cas nine or.

There are multiple different types of gene editing tools.

Obviously, we get genetic insights from our database in where we thought that was something that.

Could have the potential to have an impact on patients' lives.

Both something like gene editing I think in that case, we might look for opportunities to partner with other companies today, we have the GSK collaboration which is exclusive with GSK. So I think.

As you know theyre not a gene editing company. So I think it would be more of a long term thing for 'twenty three me rather than something in the near term, but absolutely something that we continue to monitor and observe and we'll look for those kinds of opportunities.

Yep got it and last one for me and I'll hop back in the queue here just on the CD 96 asset are you still expecting a readout this year on CD 96?

I think GSK filed or noted on our latest call that it's now kind of pushed out a, little bit but that might be a different combo trial so I'm just curious if that CD 96 readout is still expected for for this year.

Thank you.

Question is where do you see the company in five years.

Kenneth?

What a great question I Love I Love I love that kind of vision because that is absolutely. What we are building for us how do you over the long term how are we actually really making a significant impact in our customers' lives to fill out the health care system in general.

I believe strongly that the expertise that <unk> is bringing here.

How to interact direct to consumer.

Directly with our customers, how do we engage them and genomic medicine expertise. So when I think about the opportunity over the next five years, it's really about how does <unk> bring genomic medicine to everybody and some of it's going to be direct to consumer sunlight be through additional channels, but everyone. When I talk.

To health care providers, everyone can agree that one day.

Human genome is going to be part of care. It is already an incredibly meaningful tool that could be applied throughout all aspects of care. So how are we going to get from the moment today, where very few people are actually getting genetics integrated in their care to a world where it is universal and everyone has the opportunity for truly personalized care.

Thank you it's very exciting.

The next question is about asking about when we'll know more about the current testing can make drugs I think they are referring to the drugs in clinical testing right now and kind of I know you already answered that question about GSK $6 eight.

So maybe you could just speak for a second about our wholly owned program <unk>.

So yeah so sure happy, to do that thanks so I think you know as you know GSK is now solely responsible for the continued development of GSK 608 against CD 96 and so they are going to be responsible for communicating their plans.

Sure happy to wait so yes, so 'twenty three.

What you know what I think we can say is that the studies continue to enroll and so I really don't have further details than that.

<unk> 10.

It's an antibody that targets, a CD or one program, which we think is important based on our immuno oncology signature in our biology data.

Okay thank you.

Immuno oncology.

Program entered the clinic earlier this year, we announced in January 2022.

Thank you.

We have initiated clinical trials, we continue to enroll patients in the trial continues.

I'm not showing any further questions in the queue at this moment.

To make the progress as expected. So we're excited obviously to two.

I'd like to turn the call, over to Wade for any additional comments.

<unk> continued to advance that program forward and then as I referred to earlier, we have one of the things Thats really unique about 23 and me is that we have a portfolio of programs.

Thank You Victor.

We have a few questions from investors through our online platform.

I'm going to take some of the top questions here and we'll answer these.

Some of those are most of them are in company in collaboration with GSK, but also some that are wholly owned.

The first question is what are the future plans for 23andMe?

<unk> for 23, and me and so just looking forward to continuing to move those advance those that are the most compelling with the highest probability of success towards the clinic and then ultimately into clinical development.

Do you have ideas for creating future products and do you have any plans to modify your current products?

Yeah I can take that and I think if I catch the gist of the program I mean we definitely feel like there's an amazing opportunity to evolve the product and I would say 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 health care providers.

Thanks, Ken.

The next question is what are your plans to make the company more profitable for stockholders.

A couple of things and I think diagnostic handover to teens to Steve I think 120, <unk> been really focused on making sure that we are efficient with how we're using all of our resources and making sure that we are.

Really maximizing a lot of the value, especially out of everything that we have recently acquired with lemonade.

<unk>.

It's absolutely clear to me that there is an opportunity to.

To develop additional products that really serve a need in the health care world in the consumer World that are found it then genetics and I see the beginnings of our subscription product and the opportunities for us to really enhance that and add a lot more that serves a real need for our customers as well as the health care system in general.

So we look at, you know, we said this also as part of our SPAC process, like the beginnings, with the subscription product, and how do we actually really enhance that more and more with part of the Lemonade acquisition with access to the health care providers as well as the pharmacy component and being able to really do pharmacogenetics.

So we have always seen this vision of how can we best serve our customers by giving them genetic information and the next and helping them you know have the next steps they can take and it's been a challenge with you know physicians having a lack of reimbursement on you know consults around genetics and lack of training so we have this opportunity now I think to really create a full stack product where people can get access to the information, they can learn about it, they get ongoing information, we will help them integrate it and as well as they will have direction from health care providers.

On therapeutics that has a longer road, but there is a very clear and well defined pathway do have successful compounds.

Interesting.

Strong conviction around the pipeline, we have especially having a.

Coming from a human genetic target so when I look at that.

So we recently launched a very beta product, you know, with a couple reports giving access, to care.

So I think there's a real opportunity to have a full stack really integrated experience and you know that's what we are focused really on building out for the next year.

Three pronged tier one is really being very efficient with how we are using our resources to really creating products that are going to solve an incredible.

Opportunity and a need for our customers as well as the health care World and three continuing on our path for developing therapeutics that.

We will equal have a higher likelihood of success because of that foundation.

Anything to add there Steve.

Just a couple of things to put a finer point on it I think.

And I think you can imagine that we will have a more comprehensive offering, you know, later, in the year, early next year, with respect to how do we really, you know, help our customers and future customers get access to a care provider, you know, follow that whole kind of plan.

When we look at.

We got this business too we got the consumer business in fiscal 'twenty, one to above breakeven on operating cash flow basis, and one of the ways that happened is that we were much more efficient in the marketing spend category in terms of the relationship between marketing spend and how much revenue we were driving in.

That makes sense.

And I think so I think one of the keys lies in there and I think the driver of that will be that that that segment becomes more driven the consumer part of that segment becomes more driven by product than it does by marketing.

Super important concept, there and then I think scale to the top line.

Returning back to.

A good growth profile as the new products rollout late in the year also super important because we have some fixed cost in G&A and some of the technical functions in.

In the consumer segment that are there's a minimum size to them.

To run the infrastructure. So those are both super important.

If you get that and that's our first order of business to get that that segment back to.

Contributing cash to the company.

Thank you I think we'll take one more question here and then wrap it up.

The last question is.

Are you entering any new partnerships.

I don't believe there's anything else that we can.

<unk> right now, but we are always looking at ways that we will be able to enhance our customer offering and I would say after post GSK world will definitely think about ways that we can continue to enhance our research related partnership. So partnership is always top of our mind, we're always evaluating opportunities, but nothing today for us to announce.

Alright, Thanks, So I think with that we'll wrap up the Q&A and I'll turn it over to Ed to wrap.

Carl.

Just want to say, thank you to everyone for joining and we look forward to talking to you next quarter.

This concludes today's conference call. Thank you for participating you may now disconnect everyone have a great day.

Okay.

Sure.

[music].

Okay.

[music].

And so what would the economic model there be?

Thanks.

Good morning, and welcome to the 23 and me its fiscal year 2022 fourth quarter and year end financial results Conference call.

Would I have, like, a button on my 23andMe app that says connect to a care provider and, then, you know, you charge me $50 or something for that, or is it a subscription?

As a reminder, this call is being recorded at this time all participants on listen only mode. After the prepared remarks, there will be a question and answer session on the call I would now like to turn the call over to Wade Walke, Vice President of Investor Relations to lead off the call. Thank you. Please go ahead.

How are you thinking about monetizing that?

Our next question is how are we planning to compete with Ancestry and their subscription revenue?

Yep.

Our customers seem to be one and done without much incentive for additional spending.

I mean, I think that's your tapping.

I think that is what is happening today.

How are we addressing this?

Okay.

Thank you.

Before we begin I encourage everyone to go to investors that 20, <unk> dot com to find the press release, we issued earlier today reporting our financial results for the quarter and fiscal year. A replay of today's webcast will also be available on our website for a limited time within 24 hours. After the event. Please.

I would say we're quite different from Ancestry.

Our SEC filings, which can be found on our website and the SEC's website for a discussion of numerous factors that may impact our future performance we.

We also discuss certain non-GAAP measures important information on our use of these measures and reconciliation to U S. GAAP may be found in our earnings release.

So I don't know if it's not rolled out to 100% of our customers, but there's beta testing, right now with some of our customers saying, you know, what are the types of services you want to get?

I mean Ancestry really is solving a specific need which is about getting your records, and while 23andMe has a significant Ancestry component about finding your relatives, I would say that what we're very much focused on is the larger market which is the health market.

Joining us on today's call are <unk>, <unk>, our Chief Executive Officer, and co founder Kennon, Helen <unk>, Our Chief Therapeutics Officer, and Steve <unk>, Our Chief Financial Officer.

Like I said, I think that you can expect us to be doing and investing a lot more work, into our subscription programs.

So how is it that people can continue to learn about themselves, learn about important health information as it's discovered and as it comes out and then really integrate that in our life.

And now I would like to turn the call over to Ann.

So I think that's where, you know, fundamentally, when I think back on the last 16 years with, the company and our engagement rate, we have incredibly high engagement.

People come back over and over again.

Thank you Wade.

And so there's clearly a demand where people want more.

We are excited about the steps we have taken over the last year and specifically over the last several months to begin to integrate genetics everyday care, what's the ultimate goal of making personalized healthcare a reality.

One of the unique aspects of our approach is that 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 wellbeing through guidance for margin other featuring lemonade.

Nearly 20 years ago as the human genome project was being completed meters at the time predicted that genetics would have the potential to transform how we diagnose treat and prevent all human disease that.

That vision.

So for a number of reasons such as lack of reimbursement education and training genetics is not widely adopted into care.

We have the opportunity to partner with customers and the traditional health care world to use genomic data to truly personalized care.

We are taking this next step because it is a logical progression of our vision to help people axa understand and benefits.

And genome.

We have delivered on the first two aspects of our vision accessibility and understanding by now offering over 60 Health report in our personal lines form survey.

And so when we see the customer engagement levels that we have, people come back obviously for new relatives but they really come back as well for the new health reports.

We've also grown our customer base to $12 8 million genotype customers.

So more and more we're emphasized on that way and I think that there's well but while Ancestry and 23andMe both leverage genetic information, we leverage it for very different purposes and I would say the health market from all the analysis we've done appears to be a larger market.

Our new focused strides to deliver on the third aspect of our vision to help people benefit from the human genome.

We know there is a huge unmet need for preventative health care.

It has been reported that 40% of deaths from the five leading causes in the U S are preventable.

Yet accessibility to preventative care remains a problem from those people.

And so when I think about ability for us to provide care services, it's not always, you, know, having to talk to a coach, but it could be various online services that are directed by a medical professional that help you really take advantage of the information.

Markets.

We believe that with our first of its kind genomic health service focused on genetics and personalized health data, we have an opportunity to fill this unmet need and improve people's lives.

And again, the focus for us really has been on that need of prevention. And if you look at a lot of our reports, they really help people open up the door to saying, you know, you don't yet have a condition, but you have the opportunity to potentially prevent.

Thank you.

So how can we now help you implement that into your life?

The next question is, as 23andMe is already experienced in the field of genotyping DNA, are you at all interested in investing in the gene editing field or partnering with a company involved in the space?

I think everyone knows that health care is not personalized today.

Yep.

In most cases, it's a one size fits all approach.

Okay.

For example, we see guidelines for cancer screening that are primarily based on age barely based on an individual's genetic risk.

Because genetic testing is very rarely used outside of prenatal and cancer care. Most people don't know their genetic risk factors.

What to do with that information.

In addition, more often than not insurance presents a barrier to accessing genetic testing.

We also note that our customers have had problems translating information about the genomic health the tangible health benefits and outcome.

Often they take our genetic health reports to their primary care physician, who largely don't know how to interpret or act on the information.

Our efforts on the consumer side will now be focused on building a bridge between health awareness.

And health risks and disease management with our new genomic health services.

Our plan is to support patients from the first touch point with Kantar.

When you look here.

The trusted guide.

Over the next few years, we plan to concentrate on the direct to consumer self pay market.

Once we establish ourselves in the DTC market, then we can look into growing into other channels.

This effort started with our acquisition and integration of families health and telehealth and digital pharmacy services our.

Our next steps are to rollout, our new genomic health services.

Just this month, we started beta testing a genetic report consultation service with clinicians who are trained and genetic health concept.

This service provides customers with the opportunity to have now that report consultations on three of our genetic health risk report.

These consultations can help customers better understand the potential impact of their genetic risk profile and discuss the next steps.

This is just the start of our efforts in this area and I'm excited about the broader suite of services.

To introduce later this year.

A few notable milestones on the consumer side includes the recent expansion of our 23 plus membership service to customers in the UK and Canada.

This service offers insights and features to give members even more actionable information to live healthier lives.

We also launched three new reports for customers subscribe to <unk> plus bringing the total reports available to over 60.

The New reports released just last quarter included skin cancer.

Articulated report irritable bowel syndrome report.

On the therapeutic side of our business. We believe we have an advantage in drug target validation and drug development, because we have the world's largest crowdsource platform for genetic research.

Drug development is fraught with failure about 90% of drugs in development fail to become commercial medicine <unk>.

However studies have shown that drugs developed on genetically validated targets are twice as likely to succeed in all of our targets are validated using unique argue unique genetic database containing tens of thousands of genetic association with disease phenotypes.

Our research platform has generated more than 200 publication on the genetic underpinnings of a wide range of diseases conditions and traits and reviewed this research platform to create a pipeline of more than 50 program with two now in phase one clinical trial.

We believe that the therapeutics, which come out of our discovery engine will eventually play a significant role in helping people benefit from the human genome.

I would actually look to Kenneth.

I now turn the call over to Kevin to discuss our therapeutic programs.

Thanks Ann.

Gene editing is a phenomenal tool that I could see one day definitely having applicability, with our therapeutics team, so I don't know if there's anything else you want to add to that, Kenneth, but it's a great tool that we could potentially leverage one day for our own kinds of research.

Here at 23 and me we are passionate about our customer driven research platform and its potential to yield insights that could transform therapeutic target discovery drug development and ultimately benefit patients.

Yeah, so happy to respond.

Our database is the world's largest crowdsource platform for health related genetic research and has the potential to offer unique insights about diseases and how they can be treated.

Yeah, I mean, it's a very exciting space, I think, as people know, in the CRISPR-Cas9, or there are multiple different types of gene editing tools.

Obviously, we get genetic insights from our database and where we thought there was something, that could have the potential to have an impact on patients' lives and it would involve something like gene editing.

With this resource we have the opportunity to understand how changes in a gene effector risk of disease.

This is a very powerful way to identify drug targets and this has been shown that targets backed by human genetic evidence have a significantly higher chance of becoming medicines than those that do not.

I think in that case, we might look for opportunities to partner with other companies.

Our investment this last year and therapeutics has enabled us to achieve several key milestones in our therapeutics business.

Today, we have the GSK collaboration, which is exclusive with GSK, and they, as you know, they're not a gene editing company, so I think it would be more of a long-term thing for 23andMe rather than something in the near term, but absolutely something that we continue, to monitor and observe and we'll look for those kinds of opportunities.

Thank you.

These include.

Advancing 23, and <unk> <unk>, our first wholly owned program into the clinic.

The next question is, where do you see the company in five years?

<unk> is an antibody that targets the CD 200, or one protein, which is an important regulator of both T cell and myeloid cell function.

What a great question.

I love that kind of vision because that is absolutely what we are building for, is how, do you, over the long term, how are we actually really making a significant impact in our customers' lives as well as the healthcare system in general?

I believe strongly that the expertise that 23andMe is bringing here is how to interact, direct to consumer or directly with our customers, how to engage them, and genomic medicine expertise.

So, when I think about the opportunity over the next five years, it's really about how, does 23andMe bring genomic medicine to everybody?

Thank you.

And some of it's going to be direct to consumer, but some might be through additional channels, but everyone, when I talk to healthcare providers, everyone can agree that one day the human genome is going to be part of care.

CB 200, or one was identified as a promising immuno oncology targets from our proprietary genetics immuno oncology signature.

It is already an incredibly meaningful tool that could be applied throughout all aspects, of care.

So, how are we going to get from the moment today, where very few people are actually, getting genetics integrated in their care, to a world where it is universal and everyone has the opportunity for truly personalized care?

That's very exciting.

We developed using our large database of genetically linked sito types.

The next question is about asking about when we'll know more about the current testing, of chemate drugs. I think they're referring to the drugs in clinical testing right now.

We presented data on this program at this year's ACR Conference in March.

GSK is continuing to advance GSK six zero <unk> in the clinic with plans to test this antibody targeting CD 96 in combination with multiple other immuno oncology drugs.

We elected our option earlier this year to transition to a royalty stake.

Continuing to share costs and profits.

And finally GSK also exercised their option to extend our discovery collaboration for a further year for an additional $50 million.

This decision demonstrates gsk's enthusiasm for our collaboration and the value of our database provides for identifying and advancing new medicines based on human genetics.

And Kenneth, I know you already answered that question about GFK-608, so maybe you could, just speak for a second about our wholly-owned program, 23andMe-610.

As we move into this next fiscal year, we plan to continue to advance <unk> in clinical development.

Sure.

Progress new candidates in research and preclinical development.

Happy to read.

To identify new drug targets from our database as the number of genotype customers and associated phenotypic data continues to grow.

So, yeah, so 23andMe-610, it's an antibody that targets the CD200R1 program, which we, think is important based on our immuno-oncology signature and our biology data in immuno-oncology. That program entered the clinic earlier this year. We announced in January 2022 that we had initiated clinical trials. We continue to enroll patients, and the trial continues to make the progress as expected.

We believe our growing understanding of human genetics, and biology can result in significant value for patients.

Now I will turn it over to Steve to review our financial results.

Thanks Kenneth.

Fiscal year 2022 was a transitional year for 23 and me.

It was highlighted by our public listing in June 2021.

Followed in November by the strategically important acquisition of eliminated health, which now underpins our planned introduction of a genomic health service as Anne discussed earlier.

And then on the lemonade piece of the business outside of this new service that you're building, out, but kind of the core lemonade or I would say legacy lemonade, there's obviously been a lot of, and Stevie mentioned this too, inflation in CACs and especially when you're talking about marketing direct to consumer and some of the social and search channels that has weighed on all of the kind of DTC oriented company results.

How are you thinking about spend in some of the lemonade, legacy lemonade channels to, Let me answer that to begin with and then hand it over to Steve.

I would say the reason, again, for us buying Lemonade was really to get that infrastructure, and all those pieces in place so that we could execute on genomic medicine.

And I absolutely, like I hear you in terms of, you know, CAC going up and it's more competitive.

So we're excited, obviously, to continue to advance that program forwards.

While those were milestone accomplishments for the company our existing day to day operations also made great progress.

The differentiator that 23andMe has is the connection to your genome and the 13 million, customers we have that are quite engaged.

And then, as I referred to earlier, we have a – one of the things that's really unique, about 23andMe is that we have a portfolio of programs.

During fiscal 2022, our personal genomic service or PGS business increased our customer count by one 5 million genotype customers were 13% to $12 8 million.

Some of those are – most of them are in collaboration with GSK, but also some that, are wholly-owned assets for 23andMe.

Significantly extending our competitive data advantage.

So when I think about the opportunity for us, it's really about delivering personalized, care, personalized recommendations that integrate genetic information.

In addition, our active subscriber base in 'twenty, three and <unk> plus grew from 125000 to 425000 contributing meaningfully to revenue and gross margin while also improving on our average customer economics.

Our investments in our therapeutics portfolio have increased our pipeline to more than 50 programs is kind of has told you. When we moved the second 23 would be valid David program into the clinic.

Our research services business will be sustained by Gsk's election in January to remain our exclusive data partner for our fifth contract year.

Which starts in July of 2022, and it comes with a 50 million dollar payment, which is double the previous annual payment.

This extension is a clear signal of the increased value in our data platform and the insights it can produce.

All in all this was a very productive year strategically and operationally and we continue to build real value.

And there's no one else really in a position to do that.

So just looking forward to continuing to move those, to advance those that are the most, compelling with the highest probability of success towards the clinic, and then ultimately into clinical development.

Now, let's turn to financial performance.

Steve, do you want to jump in if there's anything else specific in terms of numbers?

Thanks, Kenneth.

It's the number one category that we focused on at the increment in setting up the plan, for this year.

I will start off by noting that our 12 month results for the year ended March 31, 2022 were within our previously issued financial guidance ranges.

The next question is, what are your plans to make the company more profitable for stockholders?

Our revenue for the three and 12 months ended March 31, 2022 was $101 million and $272 million respectively.

A couple things, and I think that I can also hand over to Steve.

Presenting increases of 14% and 11% respectively over the same periods in the prior year.

Fourth quarter revenue growth was primarily due to the inclusion of three months of telehealth revenue and higher research services revenue versus the prior year period.

These increases were partially offset by lower PGS revenue.

12 month revenue growth was primarily driven by the inclusion of five months of telehealth revenue and by increased subscription and research services revenue.

I think one, 23andMe has been really focused on making sure that we are efficient with, how we're using all of our resources and making sure that we are really maximizing a lot of the value we have, especially out of everything that we have recently acquired with Lemonade.

Second, it's absolutely clear to me that there is an opportunity to develop additional products, that really serve a need in the healthcare world and the consumer world that are founded in genetics.

Yes.

Let me get the composition of our revenue consumer services revenue, which includes both our PGS and our telehealth services represented approximately 83% of total revenue for the three months and 82% of total revenue for the 12 months ended March 31 2022.

And I see the beginnings of our subscription product and the opportunities for us to really, enhance that and add a lot more that serves a real need for our customers as well as the healthcare system in general.

Obviously, on therapeutics, that is a longer road, but there is a very clear and well-defined, path when you do have successful compounds that we're investing and we believe with strong conviction around the pipeline we have, especially coming from a human genetic target.

So when I look at this, the three prongs here, one is really being very efficient with how, we are using our resources, two, really creating products that are going to solve an incredible opportunity and a need for our customers as well as the healthcare world, and three, really continuing on our path for developing therapeutics that we believe will have a higher likelihood of success because of the Genetic Foundation.

Anything to add there, Steve?

Just a couple of things to put a finer point on it. I think, you know, when we look at, I mean, we got this business to, we got the consumer, business in fiscal 21 to above break even on an operating cash flow basis, and one of the ways that happened is that we were much more efficient in the marketing spend category in terms of the relationship between marketing spend and how much revenue we were driving.

And I think, so I think one of the keys lies in there, and I think the driver of that will, be that segment becomes more driven, the consumer part of that segment becomes more driven by product than it does by marketing.

Our gross profit for the three and 12 months ended March 31, 2022 was $47 million and $133 million, respectively, representing a 6% and 14% increase over the same periods in the prior year.

The improvement in fourth quarter gross profit was driven by the increased revenue as previously mentioned, while the 12 month period. Additionally benefited from cost efficiencies within PGS cost of sales.

Yeah.

Operating expenses for the three and 12 months ended March 31 2022.

Were $117 million and $387 million, respectively, compared to $112 million at $302 million for the same periods of the prior year.

The addition of telehealth operational expenses.

Increased therapeutics related research and development expenses.

A one time net litigation settlement payment and in the case of the 12 month period, one time transaction costs associated with the acquisition of eliminate health.

Yes.

Okay.

Looking at the bottom line net loss for the three and 12 month periods ended March 31, 2022 was $70 million and $217 million, respectively compared to net losses for the same period in the prior year of $67 million and $184 million respectively.

The increase in net loss for the three and 12 month periods were primarily driven by higher operating expenses as noted earlier and in the case of the 12 month period.

Favorable change in fair value of warrant liabilities of $33 million.

Next let us look at our adjusted EBITDA for details about how we define adjusted EBITDA and related reconciliations. Please see our earnings press release.

Total adjusted EBITDA for the three and 12 months ended March 31, 2022 was a deficit of $30 million.

And $151 million, respectively compared to deficits for the same period in the prior year of $11 million and $77 million respectively.

The increase in total adjusted EBITDA deficit was driven primarily by the increase in operating expenses mentioned previously.

Looking specifically at the adjusted EBITDA for the three and 12 months ended March 31, 2022 for the consumer and research services segment.

We saw a surplus of $3 million for the fourth quarter and a deficit of $30 million for the full year.

Third to surpluses in the same periods in the prior year of $18 million and $13 million respectively.

We note that quarterly adjusted EBITDA for the consumer Research services segment has exhibited seasonal variation just as the segment's top line does and.

Yeah.

We ended the quarter with a solid balance sheet, including $553 million in cash, which provides us with sufficient capital to continue to advance both segments.

You know, as I mentioned in the guidance, I mean, we're, you know, we're not planning, on anything material coming from the new businesses this year as Ann and the team get those built and tested and rolled out.

So super important concept there.

Now, let's turn to our updated guidance.

And so we're, the legacy businesses as they're currently configured are the drivers of the, top line and the way that we're resourcing them.

And there is inflation in media spend, and we've taken that into account in looking at, the efficacy of our media spend, and I think we'll be, you know, dialing that back a little bit.

And then I think scale to the top line, you know, returning back to, you know, a good, growth profile as the new products roll out late in the year, also super important because we have some fixed costs in GNA and some of the technical functions in the consumer segment that are, you know, there's a minimum size to them to run the infrastructure.

Our full year fiscal 2023 guidance is based on a conservative approach to planning.

So those are both super important to get that, and that's our first order of business to, get that segment back to contributing cash to the company.

Recognizing the current uncertainties in the general economy and in financial markets.

As you noted, and as we've talked about, we're emphasizing, you know, cash efficiency in, this business over just pure top line growth this year.

Thank you.

Within the existing consumer businesses of PGS in Telehealth, we are prioritizing the minimus station of adjusted EBITDA deficit, rather than maximizing top line growth.

Because the new genomic health service is not anticipated to fully launch until later in the fiscal year, we do not foresee a meaningful revenue contribution from these new consumer products and services within fiscal year 2023.

As a reminder, our fiscal year 2023 guidance carries a full year impact of the consolidation of the telehealth business into the Companys overall consumer segment versus only five months in fiscal year 2022.

As well as including the current and anticipated effects of general inflation on certain of our costs.

With that as background, we are projecting full year revenue revenue for fiscal year 2023.

Which will end on March 31, 2023 to be in the range of $260 million to $280 million.

We are projecting full year GAAP net loss to be in the range of $350 million to $370 million.

And finally, we are projecting our consolidated full year adjusted EBITDA deficit to be in the range of $195 million to $215 million.

Yep.

We'll take one more question here and then wrap it up.

With that I will now turn the call back over to Ann.

Got it.

The last question is, are you entering any new partnerships?

I don't believe there's anything else that we can announce right now, but we are always, looking at ways that we will be able to enhance our customer offering.

Thank you Steve.

I have a question for me, and I'll hop back in the queue here.

And I would say after, you know, in the post-GSK world, we will definitely think about ways, that we can continue to enhance our research-related partnerships.

So partnerships is always top of our mind.

We're always evaluating opportunities, but nothing today for us to announce.

As you can see we have a big agenda for the coming year. We are excited for the challenge and for the opportunity.

Our success in this endeavor is a win for millions of people.

Just on the CD96 asset, are you still expecting a readout this year on CD96?

I think with that, we'll wrap up the Q&A and I'll turn it over to Anne to wrap up the call.

Now, let's open it up for questions.

Just want to say thank you to everyone for joining and we look forward to talking to, you next quarter.

This concludes today's conference call.

Thank you for participating.

Okay.

At this time to ask a question. Please press star one on your Touchtone phone.

If you like to get out of the queue. Please press the pound key once again Thats star one for a question Star one.

I think GSK filed or noted on a latest call that it's now kind of pushed out a little, bit, but that might be a different combo trial.

Our first question comes from the line of Thiago <unk> from Credit Suisse. Your line is open.

You may now disconnect.

Everyone have a great day.

Thanks for taking the questions. So just two quick ones for me. So the first one is just on cash burn expectations for 'twenty, three or perhaps your current cash position and how much runway does that buy you given the current operational plan.

And I have a couple of questions on the therapeutic side.

So I'm just curious if that CD96 readout is still expected for this year.

Any thoughts on any read through from <unk> T J, a readout across the space to the Cte 96 asset.

And then expectations up additional progress perhaps answering in clinic now that you have 50 active programs.

So it's hard to have visibility, but what could be a reasonable base going forward. Thank you.

Kenneth, do you want to jump in?

Thanks, Thiago, let me hand back to Steve to answer the first part and obviously kind of the second.

Yeah.

Yes, sure so yes.

Starting with the $553 million balance that we've talked about.

Burn rate for the next couple of years.

And so you can kind of look at that we only give guidance for this one year.

On that front.

But more generally I would say.

This.

Configuration gives us a certain amount of time flexibility.

As we think about funding the company in the future and I think.

Even though we do have.

Some benefit of time.

As appropriate.

We will look at every option that makes sense for us to think about.

Our next funding for this company.

And I think we will be opportunistic over time, because we do have the benefit of time.

It's kind of the way we're looking at it right now.

So, sure.

Thanks, Steve.

Sure. Thanks, San Diego, maybe I can just.

Talk first of all just I think you asked about kind of recent data either one of those pieces of data was Roche reported.

Happy to do that.

Thanks.

Data further anti <unk> antibody.

Both had a trial in small cell lung cancer. The second trial in non small cell lung cancer small cell lung cancer trial that was a negative study.

And then non small cell lung cancer study as you know it didn't meet its co primary endpoint of progression free survival.

So it's clearly I think a bit of a disappointment there the Roche did see.

It's obviously hard to interpret but you did say that this first analysis.

OS data was immature the study is continuing.

They also noted that wasn't numerical improvement in both of the co primary endpoints. So I think we'll just have to wait and see.

As the data continues to emerge.

In terms of what that means for the <unk> 96 program.

As you know from our immuno oncology signature the.

The genetics in that path, we are around <unk>, six and so one of the things that.

<unk> invested in not just the collaboration program, we had with them on Cte 96, but also.

Anti <unk> antibodies with Ipos.

And then also an anti <unk> antibody with <unk>.

The surface oncology.

I think one of the potentially interesting things is the ability to really drug multiple parts of that pathway.

The <unk> antibody as you know continues in phase one GSK is now leading that.

So I think, you know, as you know, GSK is now solely responsible for the continued development, of GSK-608 against CD96, and so they are going to be responsible for communicating their plans.

It will really be responsible for communication plans moving forward, but hopefully we expect somebody is helpful.

Yes that makes sense I appreciate that thanks.

You know, what I think we can say is that the studies continue to enroll, and so I really, don't have further details on that.

And then you asked about kind of where things were in the pipeline again in part because of the GSK collaboration there's not a great deal that we can say about progress, but obviously, we do have.

So we've identified 50 targets from that database. So we have many programs in our portfolio.

So I think I remain optimistic about continuing to advance.

Those.

But we haven't provided any further guidance on when we would expect next IND or phase one program. We're really working very hard on very excited about the CB 201 program.

As you know starting therapy as one studies in January of this year.

Got it that makes sense. Thanks again for taking the question.

Okay.

Our next question will come from the line of Daniel <unk> from Citi. Your line is open.

Thank you.

I'm not showing any further questions in the queue at this moment.

Hi, guys. Thanks for taking the question.

If I can go back to guidance for 'twenty three.

I'd like to turn the call over to Wade for any additional comments.

And it helps kind of bridge some of these numbers for me. So it seems like your tight trading growth down as you focus more on profitability, which makes a lot of sense.

So so revenue at the midpoint is effectively flat, but it does also include a full year of lemonade revenues, so kind of that core organic revenue is going to be down for the year.

And then adjusted EBITDA loss is also increasing by around $50 million for the midpoint. So it doesn't seem like you're getting the immediate impact of tight trading some of the consumer growth down so I assume that.

The B b.

Increase in the loss is due to <unk>.

Increased.

Therapeutics and in this new genomic health service investment, but maybe if you could put a finer point on that and help bridge between the slowdown in revenue growth organically and.

The expansion of the loss of 23.

Absolutely let me handle the first.

Yes for sure.

So.

As you noted the topline comes with a full 12 months versus five months of this year of the topline of telehealth, but also comes with a full year.

The bottom line of telehealth. So that's part of what gives rise to that difference and thats.

That will hit the consumer research services segment components of EBITDA.

And and.

And as you noted.

We have.

Our continually growing.

Investment on the therapeutic side, that's giving rise to a part of that the other thing thats going on here.

Is that we have.

We have just the inflationary costs on our labor base, which is running at a higher rate.

In terms of merit and promo and all of those things across the entirety of the company.

During this inflationary time and and so that's that's going to run really throughout the business.

And so.

And then in terms of like specifically how the.

Work that we'll do to launch new products, while there will be some modest incremental hiring.

I think I.

Think the effects of actually getting that launched and getting that out there.

Won't be.

As big of an impact for instance is just taking on the full 12 months of the telehealth business.

Operating expenses and that sort of thing so just to put those in relativity.

Yes, that's helpful. Okay, and I just want to understand that this new genomic health service a little bit better.

Is this the service that connects the 23 and me.

Report readouts with eliminate provider.

Provider.

Or is this something in addition to.

Eliminate provider that youre going to be investing in.

It is really about connecting the first step I would say, it's really about connecting.

Our customers as well as future customers with a care provider if they want to be able to best interpret.

Best help with the information and I think part of that also gets people onto a plan for how do you actually implement this information into your life. So we look at.

We said that that also is part of our stacked assets like the beginning with the subscription product and how do we actually really enhance that more and more with kind of eliminate acquisition with access to the health care providers as well as the pharmacy component in being able to really do pharmacogenetics. So.

We recently launched a very data product with a couple of reports, giving access to care and I think keeping announcing that we will have a more comprehensive offering.

Yeah later and later in the year early next year.

With respect to how do we really.

Help our customers and future customers get access to a care provider.

And if I can follow up follow the whole kind of plan.

That makes sense and so what would be economic model there be would have like a button on may 23 in the App that says connect to a care provider and then you charge me 50 bucks or something for that or is it a subscription how are you thinking about monetizing that.

Yeah, I mean, I think Thats youre capping I think that is what is happening today. So I don't know if it's not rolled out to 100% of our customers, but there is beta testing right now with some of our customers, saying what type of what.

The types of services you want to get like I said, I think that you can expect us to be doing and investing a lot more work into our subscription programs.

So I think that's where fundamentally when I think back on the last 16 years with the company.

Having to talk to our coach but it could be various online services that are.

Directed by a medical professional that.

That help you really take advantage of the information and again the focus for US really has been answer that unmet need of prevention.

And if you look at a lot of our reports they really help people open up the door to saying you know you don't yet have a condition that you have the opportunity to potentially prevent the how can we now helping implement that into your life.

Yeah, Okay, and then on the lemonade piece of the business outside of this new service that you're you're building out, but kind of the core eliminate or I would say legacy lemonade.

There's obviously been a lot of.

And Steve you mentioned this to inflation.

And tax and it's especially when Youre talking about marketing direct to consumer in some of the social.

And search channels.

That has weighed on all of the DTC oriented.

Company results, how are you thinking about spend.

In some of the eliminate legacy eliminate channels to acquire customers, particularly the mental health and in some of these other very competitive spaces, which has really deteriorated unit economics in this space.

Yes, let me answer that to begin with and then hand it over to Steve.

I would say the reason the reason again, perhaps buying lemonade, but we need to get that infrastructure and all those pieces in place. So that we can execute on genomic medicine and I absolutely like I hear you in terms of cat going up and yes, it's more competitive differentiator that 20 <unk> has is to.

Steve do you want to jump in if there's anything else specific in terms of numbers.

Is the number one category that we focused on at the increment and setting up the <unk>.

Planned for this year and.

As I mentioned in the in the guidance I mean, we're.

We're not planning on anything material coming from the new businesses this year.

Do you get those built and tested and rolled out.

And so were the legacy businesses as they're currently configured are the are the drivers of the top line and the way that we're resourcing them.

And there is inflation in media spend and we've taken that into account and looking at the efficacy of our media spend and I think will be will be dialing that back a little bit.

As you noted.

And as we've talked about we're emphasizing.

Cash efficiency in this business over just pure topline growth.

This year.

Yeah got it and last one for me and I'll hop back in the queue here just on the CD 96 asset are you still expecting.

A readout this year <unk> 96.

Think GSK filed.

Or no download the latest call that it's now kind of pushed out a little bit but that might be a different combo trials. So I'm just curious if that Cte 96 readout is still expected for for this year.

Kenneth.

Yes, so sure happy to do that thanks.

As you know GSK is now is solely responsible for the continued development of GSK six zero rate against <unk> 96, and so they are going to be responsible for communicating their plans.

But.

I think we can say is that the studies continue to enroll and so I really don't have further details on that.

Yeah.

Thank you.

Thank you I'm not showing any further question in queue at this moment I would like to turn the call over to Wade for any additional comments.

Thank you, Victor.

Thank you Victor we have a few questions from investors through our online platform.

Sure.

I'm going to take some of the tough questions here.

We have a few questions from investors through our online platform.

Answer these.

Our first question is what are the future plans for 23 and me we have ideas for creating future products and do you have any plan to monetize your current products.

I'm going to take some of the top questions here, and we'll answer these.

Yes, I can take that and I think if I catch the justice.

That program I mean, we definitely feel like there's an amazing opportunity to evolve the product and I would say the rise of telemedicine, Nevada.

Online pharmacy.

Is it really opened up the door, where people are comfortable and used to this kind of interaction with health care providers. So we have always seen with Arizona how can we.

The first question is, what are the future plans for 23andMe?

Serve our customers by giving them a genetic information in the next one helping the next steps they can take on that.

And the challenge with.

Having a lack of reimbursement on console surrounds genetics and lockup.

Lack of training. So we have this opportunity I think to really create a full stack.

Do you have ideas for creating future products, and do you have any plans to modify them?

Product, where people can get access to the information they can learn about it.

And do you have any plans to modify your current products?

Ongoing information.

Help them integrate it.

And as well as they will have direction on health care providers.

I think theres, a real opportunity that really integrated experience and.

Yeah, I can take that, and I think if I catch the gist of the program.

I mean, we definitely feel like there's an amazing opportunity to evolve the product, and I would say 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.

That's what we are focused really on building out for the next year.

I would say, we're quite different from ancestry ancestry really solving a specific which is about getting our records.

And while <unk> has a significant ancestry and component about finding your relatives.

I would say that what we're very much focused on the larger market, which is the health market. So how is it that people can continue to learn about themselves barn about important health information.

So we have always seen this vision of how can we best serve our customers by giving, them genetic information and helping them have the next steps they can take.

And it's been a challenge with physicians having a lack of reimbursement on consults, around genetics and lack of training.

So we have this opportunity now, I think, to really create a full stack. Product, where people can get access to the information, they can learn about it, they, get ongoing information, we will help them integrate it, and as well as they will have direction from healthcare providers.

So I think there's a real opportunity to have a full stack really integrated experience, and that's what we are focused really on building out for the next year.

Thanks.

And as it comes out and then really integrate that into our life and so when we see the customer engagement levels that we have people come back obviously four and relatives.

But they really come back as well as several new health reports, so more and more emphasize on that way and I think that there as well, but while ancestry and 20 <unk>. Both leveraged genetic information will elaborate that for very different purposes, and I would say the health market from all of the analysis, we have done appears to be a larger market.

Our next question is, how are we planning to compete with Ancestry and their subscription, revenue?

Our customers seem to be one and done without much incentive for additional spending.

How are we addressing this?

Yeah.

Thank you.

I would say we're quite different from Ancestry.

I mean, Ancestry really is solving a specific need, which is about getting your records.

The next question is as <unk> has already experienced in the field of Genotyping DNA are you at all interested in investing in the gene editing field, we're partnering with a company involved in this space.

And while 23andMe has a significant Ancestry component about finding your relatives, I, would say that what we're very much focused on is the larger market, which is the health market.

So how is it that people can continue to learn about themselves, learn about important health, information as it's discovered and as it comes out, and then really integrate that in our life.

And so when we see the customer engagement levels that we have, people come back obviously, for new relatives, but they really come back as well for the new health reports.

So more and more we're emphasizing that way.

Thank you.

And I think that there's – but while Ancestry and 23andMe both leverage genetic information, we leverage it for very different purposes.

And I would say the health market, from all the analysis we've done, appears to be a, larger market.

Well I would actually look to Kenneth gene editing is a phenomenal tool that I could say one day definitely having applicability with our with our therapeutics team. So I don't know if theres anything else you want to add to that Ken asked but.

It's a great tool that we can potentially leverage one day for all kinds of research.

Yeah, so happy to respond.

Well, I would actually look to Kenneth.

Very exciting space I think equally though in the CRISPR Cas nine or.

Gene editing is a phenomenal tool that I could see one day definitely having applicability, with our therapeutics team.

So I don't know if there's anything else you want to add to that, Kenneth, but it's a great, tool that we could potentially leverage one day for our own kinds of research.

There are multiple different types of gene editing tools.

Yeah.

Obviously, we get genetic insights from our database, where we thought there was something that.

It could have the potential to have an impact on patients' lives.

Something like gene editing I think in that case, we might look for opportunities to partner with other companies today, we have the GSK collaboration which is exclusive with GSK. So.

So happy to respond.

As you know theyre not a gene editing company, sorry, I think it would be more of a long term thing for 'twenty three me rather than something in the near term, but could absolutely something that we continue to monitor and observe and we'll look for those kinds of opportunities.

Yeah.

Thank you.

The next question is where do you see the company in five years.

I mean, it's a very exciting space, I think, as people know, in the CRISPR-Cas9.

What a great question I Love I Love I love that kind of vision because that is absolutely. What we are building for is how do you over the long term how are we actually really making a significant impact in our customers' lives with all of the health care system in general.

There are multiple different types of gene editing tools.

I believe strongly that the expertise that 'twenty through me as bringing here.

Is.

How to interact direct to consumer are.

Directly with our customers, how do we engage them and genomic medicine expertise. So when I think about the opportunity over the next five years, it's really about how does <unk> bring genomic medicine to everybody and some of it's going to be direct to consumer some might be through additional channels, but everyone. When I talk.

Obviously, we get genetic insights from our database and where we thought there was something, that could have the potential to have an impact on patients' lives, and it would involve something like gene editing.

To health care providers, everyone can agree that one day.

I think in that case, we might look for opportunities to partner with other companies.

Today, we have the GSK collaboration, which is exclusive with GSK.

And they, as you know, they're not a gene editing company.

So I think it would be more of a long-term thing for 23andMe rather than something in, the near term, but absolutely something that we continue to monitor and observe, and we'll look for those kinds of opportunities.

Thank you.

Thank you it's very exciting.

The next question is about asking about when we'll know more about the current testing of Kenny drugs, I think they're referring to the drugs in clinical testing right now and kind of I know you already answered that question about GSK 608.

So maybe you could just speak for a second about our wholly owned program 2016.

Sure happy to wait so yes, so 'twenty three.

<unk> 10.

It's an antibody that targets CD terms with our one program, which we think is important based on our immuno oncology signature in our biology data.

Immuno oncology.

That program entered the clinic earlier this year, we announced in January 2022.

That we had initiated the clinical trials, we continue to enroll patients in the trial continues.

To make the progress as expected. So we're excited obviously to continue to advance that program forward and then as I referred to earlier, we have one of the things that's really unique about <unk> is that we have a portfolio of programs.

Some of those are most of them are <unk> company in collaboration with GSK, but also some that are wholly owned.

For 2000, and so just looking forward to continuing to move those advance those are the most compelling with the highest probability of success towards the clinic and then ultimately into clinical development.

The next question is, where do you see the company in five years?

Thanks, Ken.

The next question is what are your plans to make the company more profitable for stockholders.

What a great question.

A couple of things and I think that I can answer handover to teens to Steve I think 120, <unk> been really focused on making sure that we are efficient with how we are using all of our resources and making sure that we are.

Really maximizing a lot of the value have especially out of everything that we have recently acquired with lemonade.

<unk>.

It's absolutely clear to me that there is an opportunity to develop additional products that really serve a need in the healthcare world in the consumer world that are found it then genetics and I see the beginnings of our subscription product and the opportunities for us to really enhance that and add a lot more that serves a real need for.

I love that kind of vision, because that is absolutely what we are building for, is, you, know, how do you, over the long term, how are we actually really making a significant impact in our customers' lives as well as the healthcare system in general?

Our customers as well as the health care system in general.

Obviously on therapeutics that has a longer road, but there is a very clear and well defined pathway do have successful compounds.

We're investing.

Our strong conviction around the pipeline, we have especially having a.

Current human genetic targets.

I believe strongly that the expertise that 23andMe has bringing to us over the long term, and the expertise that 23andMe is bringing here is how to interact direct to consumer or directly with our customers, how to engage them, and genomic medicine expertise.

So when I look at that.

Three pronged tier one is really being very efficient with how we are using our resources to really creating products that are going to solve.

So when I think about the opportunity over the next five years, it's really about how, does 23andMe bring genomic medicine to everybody.

And some of it's going to be direct to consumer, but some might be through additional channels.

An incredible opportunity and a need for our customers as well as the health care World.

But everyone, when I talk to healthcare providers, everyone can agree that one day the human, genome is going to be part of care.

It is already an incredibly meaningful tool that could be applied throughout all aspects, of care.

So how are we going to get from the moment today where very few people are actually getting, genetics integrated in their care to a world where it is universal and everyone has the opportunity for truly personalized care?

And three continuing on our path for developing therapeutics that.

Thank you, it's very exciting.

The next question is about asking about when we'll know more about the current testing, of cannabis drugs.

We believe we will have a higher likelihood of success because of that foundation.

Anything to add there Steve.

Just a couple of things to put a finer point on it I think.

I think they're referring to the drugs in clinical testing right now.

And Kenneth, I know you already answered that question about GFK-608, so maybe you could, just speak for a second about our wholly-owned program, 23andMe 610.

When we look at I mean, we got this business too we got the consumer business in fiscal 'twenty, one to above breakeven on operating cash flow basis, and one of the ways that happened is that we were much more efficient in the marketing spend category in terms of the relationship between marketing spend and how much revenue we were driving.

Sure, happy to read.

So yeah, so 23andMe 610, it's an antibody that targets the CD200R1 program, which we, think is important based on our immuno-oncology signature and our biology data in immuno-oncology. That program entered the clinic earlier this year.

We announced in January 2022 that we had initiated clinical trials. We continue to enroll patients, and the trial continues to make the progress as expected.

Again.

Super important concept, there and then I think scale to the top line.

So we're excited, obviously, to continue to advance that program forward.

Returning back to.

A good growth profile as the new products rollout late in the year also super important because we have some fixed costs and G&A in.

And then, as I referred to earlier, one of the things that's really unique about 23andMe, is that we have a portfolio of programs.

Some of those, or most of them, are in collaboration with GSK, but also some that are wholly-owned, assets for 23andMe.

And so just looking forward to continuing to move those, to advance those that are the, most compelling with the highest probability of success towards the clinic, and then ultimately into clinical development.

Thanks, Kenneth.

And some of the technical functions and in the consumer segment that are there is a minimum size to them.

To run the infrastructure. So those are both super important.

If you get that and that's our first order of business to get that that segment back to.

Contributing cash to the company.

Okay.

Thank you I think we'll take one more question here and then wrap it up.

The next question is, what are your plans to make the company more profitable for stockholders?

The last question is.

A couple things, and I think that I can also hand over to Steve.

I think, one, 23andMe has been really focused on making sure that we are efficient with, how we're using all of our resources and making sure that we are really maximizing a lot of the value we have, especially out of everything that we have recently acquired with Lemonade.

Are you entering any new partnerships.

Second, it's absolutely clear to me that there is an opportunity to develop additional products, that really serve a need in the healthcare world and the consumer world that are founded in genetics.

And I see the beginnings of our subscription product and the opportunities for us to really, enhance that and add a lot more that serves a real need for our customers, as well as the healthcare system in general.

I don't believe Theres anything else that we can.

Obviously, on therapeutics, that is a longer road, but there is a very clear and well-defined, path when you do have successful compounds that we're investing, and we believe, with strong conviction around the pipeline we have, especially coming from a human genetic target.

So, when I look at just the three prongs here, one is really being very efficient with how, we are using our resources, two, really creating products that are going to solve an incredible opportunity and a need for our customers, as well as the healthcare world, and three, really continuing on our path for developing therapeutics that we believe will have a higher likelihood of success because of the Genetic Foundation.

Anything to add there, Steve?

Right now, but we are always looking at ways that we will be able to enhance our customer offering and I would say after post GSK world definitely think about ways that we can continue to enhance our research related partnership. So partnership is always top of our mind, we're always evaluating opportunities, but nothing today for us to announce.

Just a couple of things to put a finer point on it.

I think, you know, when we look at – I mean, we got this business to – we got the consumer, business in fiscal 21 to above break-even on an operating cash flow basis, and one of the ways that happened is that we were much more efficient in the marketing spend category in terms of the relationship between marketing spend and how much revenue we were driving.

And I think – so, I think one of the keys lies in there, and I think the driver of that, will be that that segment becomes more driven.

The consumer part of that segment becomes more driven by product than it does by marketing.

So, super important concept there.

Thank you.

And then I think scale to the top line, you know, returning back to, you know, a good, growth profile as the new products roll out late in the year, also super important because we have some fixed costs in GNA and some of the technical functions in the consumer segment that are – you know, there's a minimum size to them to run the infrastructure.

I think we'll take one more question here and then wrap it up.

So, those are both super important to get that – and that's our first order of business, to get that segment back to contributing cash to the company.

The last question is, are you entering any new partnerships?

I don't believe there's anything else that we can announce right now, but we are always, looking at ways that we will be able to enhance our customer offering.

And I would say after, you know, in the post-GSK world, we will definitely think about ways, that we can continue to enhance our research-related partnerships.

So partnerships is always top of our mind.

We're always evaluating opportunities, but nothing today for us to announce.

So I think with that, we'll wrap up the Q&A, and I'll turn it over to Anne to wrap up the, call.

All right, thanks.

Okay.

Alright, Thanks, So I think with that we'll wrap up the Q&A and I'll turn it over to Ed to.

To wrap up the call.

I just want to say thank you to everyone for joining, and we look forward to talking to, you next quarter.

Just wanted to say, thank you to everyone for joining and we look forward to talking to you next quarter.

This concludes today's conference call.

Thank you for participating.

You may now disconnect.

Everyone, have a great day.

අපප හොඳින් ඉරාන් එකතු වනු ඇත සම සෝදු වෙන් තබන්න ථවත් තබන්න, ගනීමට මිශ්රණාය ව කෝප්පදය ස්තූලින් පිළිකිරු වගට කරන්න, ඔබට වනු ඇත පිළිකිරු ඇති පිළිකිරු කපා දින 2 කට කර පෙහදීමට එකතු අපි වෙන්න දින 3 ක් වනු කරන්න ඔබට වෙන්න දින 4 ක් පිළිකිරු පිළිකිරු කරන්න, අපි වෙන්න දින 3 ක් දින 3 ක් වනු කරන්න, අපි වෙන්න දින 3 ක් වනු გადარმალ არერ და ჊არე თსერრ და უყთერე, ლერნა ტიერე ბაშო ლანალ სეა არერე დაოეღენ ღხაროდთფვა გარდიტქადბა სერერე სერეშნილერე სხახტენ სოეგნე ეგრიოი დიოი უაიან რეშე სიურე იივწზიე რერე ნარე სიურე რერე ისბე სისუურე კერე რერე სდე რერე ისბე უეთ element სდე ნცსტტ სსსფ სდღე სიუოი სერე ისბე რერე [inaudible] რერე ავაჄალ wiping [inaudible] გრერე პარ ვაარ რერე უენერე რერე სტენერე Good morning and welcome to the 23andMe's fiscal year 2022 fourth quarter and year-end, financial results conference call.

This concludes today's conference call. Thank you for participating you may now disconnect everyone have a great day.

Q4 2022 23andMe Holding Co. Earnings Call

Request a DemoDemo

VG Acquisition

Earnings