23andMe Holding Co. Q4 2023 Earnings Call

Operator: Hello and welcome to 23 and me's fiscal year 2020, fourth quarter, and full year financial results conference call. As a reminder, this call is being recorded at this time, and all participants are almost in only mode.

Speaker 1: Hello, and welcome to 23andMe's Fiscal Year 2023 Fourth Quarter and Full Year Financial Results Conference Call. As a reminder, this call is being recorded. At this time, all participants are in listen-only mode. After the program marks, there will be a question-and-answer session. I would now like to turn the call over to Maeve.

Operator: After the preferred remarks, there will be a question-and-answer session. Now, I'll actually turn the call over to Maeve Connetton, Investor Relations at Argo Partners, to lead off the call. Thank you.

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

Speaker 2: to find the press release we issued earlier today reporting our financial results for the quarter and full year.

Speaker 2: A replay of today's webcast will also be available on our website for a limited time within 24 hours after the event.

Maeve Connetton: Please note that certain statements made during this call regarding matters that are not historical facts, including but not limited to, management 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 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.

Speaker 2: Please note that certain statements made during this call regarding matters that are not historical facts, including but not limited to management outlook or predictions for future periods, are forward-looking statements.

Speaker 2: These statements are based solely on information that is now available to us.

Speaker 2: 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 a discussion of numerous factors that may impact our future performance.

Maeve Connetton: We also discuss certain non-GAAP measures. Important information on our use of these measures and reconciliation to US GAAP may be found in our earnings. Joining us on today's call are Anne Wojcicki, our chief executive officer and co-founder, and Joe Zel Savage, our interim chief financial and accounting officer. Kenneth Hillen, our chief therapeutics officer, will join us for Q&A. I'd now like to turn the call over to

Speaker 2: We also discussed certain non-GAAP measures. Important information on our use of these measures and reconciliation to US GAAP may be found in our earnings release.

Speaker 2: Joining us on today's call are Anne Wojcicki, our Chief Executive Officer and Co-Founder, and Jo Zell-Savage, our Interim Chief Financial and Accounting Officer.

Speaker 2: Kenneth Hillen, our Chief Therapeutics Officer, will join us for Q&A. I'd now like to turn the call over to Ann.

Anne Wojcicki: 23 Me had a productive year with numerous accomplishments for both our consumer and therapeutic product lines. Since starting the company, 23 Me has been focused on helping our customers access, understand, and benefit from the human genome. Today, I'm excited to review the progress we made in those areas this past quarter and fiscal year 2020. This year we grew our overall customer base to over 14 million genotype customers, a growth of 11% year-over-year, representing significant progress towards our mission. This has enabled us to create the world's largest crowdsourced platform of genetic information, paired with billions of phenotypic data points contributed by engaged customers.

Speaker 3: Thank you, Meeve.

Speaker 4: 23andMe had a productive year with numerous accomplishments for both our consumer and therapeutic businesses.

Speaker 4: Since starting the company, 23andMe has been focused on helping our customers access, understand, and benefit from the human genome.

Speaker 4: Today, I'm excited to review the progress we made in those areas this past quarter and fiscal year 2023.

Speaker 4: This year we grew our overall customer base to over 14 million genotype customers, a growth of 11% year over year, representing significant progress towards our mission.

Speaker 4: This has enabled us to create the world's largest crowdsource platform of genetic information paired with billions of phenotypic data points contributed by engaged customers.

Anne Wojcicki: Our unique platform helps us discover new genetic insights, develop impactful risk prediction reports for common health conditions, and accelerate the identification of novel drug targets with the goal of bringing new treatments and jurors to people with unmet medical needs. Looking at our consumer business, over the past year, we've seen a significant increase in revenue for our 23 and E plus subscription membership. Now with over 640,000 members, subscribers have grown 51% year over year. To account for the additional benefits we provide members, this month we are increasing subscription prices.

Speaker 4: Our unique platform helps us discover new genetic insights, develop impactful risk prediction reports for common health conditions, and accelerate the identification of novel drug targets with the goal of bringing new treatments and cures to people with unmet medical needs. Looking at our consumer business.

Speaker 4: Over the past year, we've seen a significant increase in revenue for our 23andMe Plus subscription membership.

Speaker 4: Now with over 640,000 members, subscribers have grown 51% year over year.

Anne Wojcicki: We also continue to increase the percentage of customers who opt in to become 23 Me Plus members right at the point they purchase their base kit. We continue to introduce higher value, insight-driven services to increase customer engagement and drive margin in our 23ME plus subscription model. This past quarter, we've added three new health reports for 23M-E-plus members, including reports identifying an individual's likelihood of being diagnosed with preeclampsia and attention deficit, hyperactivity disorder, or ADHD, as well as the first and only direct-to-consumer genetic health risk report cleared by the FDA for hereditary prostate cancer.

Speaker 4: To account for the additional benefits we provide members, this month we increased subscription prices.

Speaker 4: We also continue to increase the percentage of customers who opt in to become 23me Plus members right at the point they purchase their base kit.

Speaker 4: We continue to introduce higher value insight-driven services to increase customer engagement and drive margin in our 23andMe Plus subscription model.

Speaker 4: This past quarter we've added three new health reports for 23andMe plus members, including reports identifying an individual's likelihood of being diagnosed with preeclampsia and attention deficit hyperactivity disorder or ADHD.

Speaker 4: as well as the first and only direct-to-consumer genetic health risk report cleared by the FDA for hereditary prostate cancer.

Anne Wojcicki: With our focus on enhancing the benefits of our subscription service, all 11 new health reports we launched over the past fiscal year were exclusive to 23ME plus members. We now offer over 35 reports on common conditions that can have an impact on millions of customers, including mental health reports for anxiety and depression.

Speaker 4: With our focus on enhancing the benefits of our subscription service, all 11 new health reports we launched over the past fiscal year were exclusive to 23andMe Plus members.

Speaker 4: We now offer over 35 reports on common conditions that can have an impact on millions of customers, including mental health reports for anxiety and depression.

Anne Wojcicki: Looking ahead, we continue to focus on delivering premium insights and features that give members even more actionable information to live healthier lives. For our ancestry and health services, we continue to see growth in ASP and margins as consumers recognize the value of understanding that over a third of their health risks come from their genetics. The mix of kit sales continues to trend higher for our health and ancestry service as opposed to our ancestry only service.

Speaker 4: Looking ahead, we continue to focus on delivering premium insights and features that give members even more actionable information to live healthier lives.

Speaker 4: In our ancestry and health services, we continue to see growth in ASP and margins as consumers recognize the value of understanding that over a third of their health risks come from their genetics.

Speaker 4: The mix of kit sales continues to trend higher for our health and ancestry service, as opposed to our ancestry only service.

Anne Wojcicki: We've been continuing to refine and improve how customers find, prioritize, and understand their results from the 150 plus reports we offer, leading to more consumers discovering the incredible value 23 Me provides. We remain focused on the continued integration of Lemonade's telehealth and pharmacy services with our genetic services. We're excited about the ongoing successful integration as we continue our journey of transforming the traditional primary care experience and making personalized healthcare a reality. Consumer demand continues for telehealth services addressing a variety of needs, including men's and women's health, as well as mental health services, a particular area of high unmet medical needs.

Speaker 4: We've been continuing to refine and improve how customers find, prioritize, and understand their results from the 150 plus reports we offer.

Speaker 4: leading to more consumers discovering the incredible value 23andMe provides.

Speaker 4: We remain focused on the continued integration of Lemonade's telehealth and pharmacy services with our genetic services.

Speaker 4: We're excited about the ongoing successful integration as we continue our journey of transforming the traditional primary care experience and making personalized health care a reality.

Speaker 4: Consumer demand continues for telehealth services addressing a variety of needs, including men's and women's health, as well as mental health services, a particular area of high unmet medical need.

Anne Wojcicki: Looking ahead at the growth trajectory for our consumer business, I'm excited and proud of the hard work and continued excellence in execution of my consumer leadership team as they continue to drive consumer engagement through delivering high-value insight-driven reports and products, which ultimately increases subscriptions, top-line revenue, and margin. Under the leadership of our dedicated consumer team, including Daniel Chu, our chief products officer, David Baker, our vice president of engineering and chief security officer, John Ward, our chief marketing officer, and Nora Abul-Husson, vice president of Genomic Health, we aim to focus the evolution of our business on providing maximum value to consumers while improving margins and generating revenue growth with the ultimate goal of leading this business to become cash flow positive. Turning to our therapeutic business,

Speaker 4: Looking ahead at the growth trajectory for our consumer business, I'm excited and proud of the hard work and continued excellence in execution of my consumer leadership team as they continue to drive consumer engagement through delivering high value, insight driven reports.

Speaker 4: products which ultimately increases subscriptions, top-line revenue, and margin.

Speaker 4: Under the leadership of our dedicated consumer team, including Daniel Chu, our Chief Products Officer,

Speaker 4: David Baker, our Vice President of Engineering and Chief Security Officer.

Speaker 4: John Ward, our Chief Marketing Officer, and Nora Abulhuffam, Vice President of Genomic Health.

Speaker 4: We aim to focus the evolution of our business on providing maximum value to consumers while improving margins and generating revenue growth with the ultimate goal of leading this business to become Casco Positive.

Anne Wojcicki: We were excited to present at the American Association for Cancer Research, or AACR, annual meeting in April, where we reported our first set of clinical data from the first in human phase 1 slash 2A study of 23 and me 610, our wholly owned antibody targeting CD200 R1. The phase one data demonstrated 23 and me 610 had an acceptable safety and tolerability profile with favorable pharmacokinetics and peripheral CD200 R1 daturation in patients with advanced solid malignancy.

Speaker 4: Turning to our therapeutic business, we were excited to present at the American Association for Cancer Research, or AACR, annual meeting in April , where we reported our first set of clinical data from the first in-human phase 1-2a study.

Speaker 4: 23andMe 610, our wholly owned antibody targeting CD200R1.

Speaker 4: The Phase 1 data demonstrated 23ME610 had an acceptable safety and tolerability profile with favorable pharmacokinetics and peripheral CD200R1 saturation in patients with advanced solid malignancies.

Anne Wojcicki: Based on phase one data, a dose of 23 and me 610, given at 1,400 milligrams intravenously every three weeks, was selected for evaluation of anti-tumor activity in the ongoing phase 2A portion of the phase 1-2A, 23 and me 610 study. The phase 2A portion is designed to evaluate the anti-tumor activity of 23 and me 610 monotherapies in a number of expansion cohorts and further characterize the safety, tolerability, PK, and PD profile of 23 and me 610.

Speaker 4: Based on the phase 1 data, a dose of 23andMe 610 given at 1400 milligrams intravenously every 3 weeks was selected for evaluation of anti-tumor activity in the ongoing phase 2a portion of the phase 1 slash 2a 23andMe 610 study.

Speaker 4: The Phase IIa portion is designed to evaluate the anti-tumor activity of the 23andMe 610 therapy in a number of expansion cohorts.

Speaker 4: and further characterize the safety, tolerability, PK and PD profile of 23 and May 610.

Anne Wojcicki: The expansion cohorts include Clear Cell Rental Cell Carcinoma, Epithelial ovarian, fallopian tube, or primary paracineal carcinoma, neuroendrican cancers, small cell lung cancer, and microsatellite instability high or tumor mutational burden high cancers. A cohort of adolescents with locally advanced, unrespectable, or mostatic, metastatic solid malignancies will also be enrolled.

Speaker 4: The expansion cohorts include clear cell renal cell carcinoma,

Speaker 4: Epithelial ovarian.

Speaker 4: fallopian tube or primary peritoneal carcinoma

Speaker 4: neuroendocrine cancers, small cell lung cancer, and microsatellite instability high or tumor mutational burden high cancers. A cohort of adolescents with locally advanced unresectable or metastatic solid malignancies will also be enrolled.

Anne Wojcicki: Having access to both genetic and phenotypic data through our re-contactable large-scale research platform provides novel insights into diseases and how they can be treated. Studies have shown that therapeutic programs with a human genetic foundation are more than twice as likely to succeed. In addition to 23ME 610, we have a promising portfolio of 23ME owned and collaborative programs with GSK, and we'll decide which of these programs to continue investing in or partner with.

Speaker 4: Having access to both genetic and phenotypic data through our reconfectable large-scale research platform provides novel insights into diseases and how they can be treated.

Speaker 4: Studies have shown that therapeutic programs with a human genetic foundation are more than twice as likely to succeed.

Speaker 4: In addition to 23andMe 610, we have a promising portfolio of 23andMe owned and collaborative programs with GSK and will decide which of these programs to continue investing in or to partner.

Anne Wojcicki: These programs span a range of therapeutic areas, including Immuno-Incology, cardiovascular, and neurology. We are excited to report future updates as we progress the therapeutic side of the business. In addition to our current program, 23 Me is actively seeking to advance our pipeline of genetically validated discovery and clinical programs through new pharmaceutical collaborations. We are also uniquely positioned to partner with industry collaborators to improve R&D productivity through genetically driven targeted identification and portfolio prioritization.

Speaker 4: These programs span a range of therapeutic areas, including immuno-oncology.

Speaker 4: cardiovascular, and neurology. We are excited to report future updates as we progress the therapeutic side of the business.

Speaker 4: In addition to our current programs, 23andMe is actively seeking to advance our pipeline of genetically validated discovery and clinical programs through new pharmaceutical collaborations.

Speaker 4: We are also uniquely positioned to partner with industry collaborators to improve R&D connectivity through genetically driven target identification and portfolio prioritization.

Anne Wojcicki: In addition, we see patient recruitment and disease awareness campaigns as impactful partnership opportunities. This has been demonstrated through the collaboration with Novartis, which we announced in March, to help raise awareness for lipoprotein little A, a little known genetic risk factor for cardiovascular disease. Our new chief corporate development officer, Reza Ofkami, will be leading our efforts to secure new partnerships with potential collaborators following the expiration this summer of the exclusive target discovery term of our GSA collaboration.

Speaker 4: In addition, we see patient recruitment and disease awareness campaigns as impactful partnership opportunities.

Speaker 4: This has been demonstrated through the collaboration with Novartis, which we announced in March 2023.

Speaker 4: to help raise awareness for lipoprotein little a, a little known genetic risk factor for cardiovascular disease.

Speaker 4: Our new Chief Corporate Development Officer, Reza Afkami, will be leading our efforts in securing new partnerships with potential collaborators following the expiration this summer of the exclusive target discovery term of our GSA collaboration.

Anne Wojcicki: Reza was most recently Senior Vice President of Corporate Development and Strategy at Global Blood Therapeutics, a clinical stage biopharmaceutical company focused on innovative therapies for the treatment of sickle cell disease. He led business development, licensing, and strategy for the company. He also played a key role in Pfizer's acquisition of global blood therapeutics in late 2022. He brings over 20 years of corporate strategy and business development experience across the therapeutic industry. We look forward to updating you when material partnership deals are announced. And with that, let me turn the call over to Joe, who will review our financial results for the quarter.

Speaker 4: Reza was most recently Senior Vice President of Corporate Development and Strategy at Global Blood Therapeutics, a clinical-stage biopharmaceutical company focused on innovative therapies for the treatment of sickle cell disease. We led business development, licensing, and strategy for the company.

Speaker 4: He also played a key role in Pfizer's acquisition of global blood therapeutics in late 2022.

Speaker 4: He brings over 20 years of corporate strategy and business development experience across the therapeutic industry.

Speaker 4: We look forward to updating you when material partnership deals are signed. And with that, let me turn the call over to Joe, who will review our financial results for the quarter.

Joseph Selsavage: Thanks, Pam. Our 2003 fiscal year was marked by 10% year-over-year revenue growth in our consumer business, in line with our guidance. We have also made headway on improving our justice EBITA deficit for our consumer and research services segment through margin and operating expense discipline, which we expect to continue into fiscal year 2024. Our revenue for the 3 and 12 months ended March 31st, 2023, was 92 million and 299 million, respectively, representing a decrease of 8% and an increase of 10%, respectively, over the same periods in the prior year.

Speaker 1: Thanks, Dan. Our 2023 fiscal year was marked by a 10% year-over-year revenue growth in our consumer business in line with our guidance. We have also made headway on improving our adjusted EBITDA deficit for our consumer and research services segment.

Speaker 4: through margin and operating expense discipline, which we expect to continue into fiscal year 2024.

Speaker 4: Our revenue for the three and 12 months ended March 31, 2023, was $92 million and $299 million, respectively, representing a decrease of 8% and an increase of 10%, respectively, over the same periods in the prior year.

Joseph Selsavage: The three-month year-over-year decrease in revenue was primarily due to lower research services revenue related to GSC as we took a cumulative revenue adjustment in the fourth quarter of fiscal year 2022 based on a change in estimate of the contract completion to date and a decrease in PGF kits as we reduced our promotional activities in the period to drive higher average selling prices, resulting in lower overall sales but improved. These decreases were partially offset by continued growth in our 12-month revenue growth was primarily due to the full-year inclusion of telehealth services revenue, compared to only five months in the prior year.

Speaker 5: The three month year-over-year decrease in revenue was primarily due to lower research services revenue related to GSK as we took a cumulative revenue adjustment in the fourth quarter of fiscal year 2022 based on a change in estimate of the contract's completion to date and a decrease in PGF kits.

Speaker 5: as we reduced our promotional activities in the period to drive higher average selling prices, resulting in lower overall sales and improved margins.

Speaker 5: These decreases were partially offset by continued growth in our subscription services and GSK's election to extend its exclusive discovery term for a fifth year, which provides greater revenue than prior years.

Speaker 5: 12-month revenue growth was primarily due to the full-year inclusion of telehealth services revenue compared to only five months in the prior year. The 12-month period also benefited from higher average selling prices on PGS kits.

Joseph Selsavage: The 12-month period also benefited from higher average selling prices on PGF kits, more than doubling of our subscription services revenue, and increased research services revenue. Looking at the composition of our revenue, consumer services revenue represented approximately 88% and 83% of total revenue for the 3 and 12 months ended March 31st, 2023, respectively, and research service revenue, which was primarily derived from the GSK collaboration, accounted for approximately 12% and 17% of total revenue Our gross profit for the three and 12-month periods ended March 31st, 2023, was 40 million and 135 million, respectively, representing a 15% decrease and a 1% increase, respectively, over the same periods in the prior year.

Speaker 5: more than doubling of our subscription services revenue, and increased research services revenue.

Speaker 5: Looking at the composition of our revenue, consumer services revenue represented approximately 88% and 83% of total revenue for the three and 12 months ended March 31, 2023 respectively.

Speaker 5: and research service revenue, which is primarily derived from the GSK collaboration.

Speaker 5: accounted for approximately 12% and 17% of total revenue, respectively, for those same periods.

Speaker 5: Our gross profit for the three and 12 month period ended March 31, 2023 was $40 million and $135 million respectively, representing a 15% decrease and a 1% increase respectively over the same periods in the prior year. The decrease in fourth quarter gross profit.

Joseph Selsavage: The decrease in fourth-quarter gross profit was driven primarily by the lower revenues mentioned previously. The improvements in the 12-month gross profit were primarily due to the increase in full-year revenues and higher PGS kit selling prices mentioned previously, which more than offset higher supply chain costs in PGS. Operating expenses for the three and 12-month periods ended March 31st, 2023, were 109 million and 459 million, respectively, compared to 117 million and 387 million for the same periods in the prior year.

Speaker 5: was driven primarily by the lower revenues mentioned previously.

Speaker 5: The improvements in the 12-month gross profit was primarily due to the increase in full-year revenues and higher PGS kit selling prices mentioned previously.

Speaker 5: which more than offset higher supply chain costs in the PGS business.

Speaker 5: Operating expenses for the three and 12 month period ended March 31, 2023 were $109 million and $459 million respectively, compared to $117 million and $387 million for the same period in the prior year.

Joseph Selsavage: The decrease in the fourth quarter operating expenses was primarily driven by a one-time net litigation settlement payment in fiscal year 2022, and timing differences in seasonal marketing campaigns and fewer promotional windows between the comparative periods. The increase in the 12-month operating expenses was primarily due to increased personnel-related expenses from increased stock-based compensation, salaries, and related taxes as a result of inflation and headcount growth, as well as a non-cash impairment charge for an intangible asset related to the previously acquired telehealth.

Speaker 5: The decrease in the fourth quarter operating expenses was primarily driven by one-time net litigation settlement payments in fiscal year 2022 and timing differences in seasonal marketing campaigns and fewer promotional windows between the comparative periods.

Speaker 5: The increase in the 12-month operating expenses was primarily due to increased personnel-related expenses from increased stock-based compensation, salaries, and related taxes as a result of inflation and headcount growth, as well as a non-cash impairment charge.

Joseph Selsavage: Looking at the bottom line, net loss for the three and 12 months ended March 31st, 2023, was 64 million and 312 million, respectively, compared to the net losses for the same periods in the prior year of 70 million and 217 million. The improvement in fourth quarter net loss was driven mainly by the lower operating expenses mentioned previously, as well as an increase in interest income from cash held in money market funds.

Speaker 5: for an intangible asset related to the previously acquired telehealth business.

Speaker 5: Looking at the bottom line, net loss for the three and 12 months ended March 31, 2023 with $64 million and $312 million respectively compared to the net losses for the same period in the prior year of $70 million and $217 million.

Speaker 5: The improvement in fourth quarter net loss was driven mainly by the lower operating expenses mentioned previously, as well as an increase in interest income from cash held in money market funds.

Joseph Selsavage: The 12-month increase in net loss was primarily due to the higher operating expenses discussed previously and the favorable change in fair value of warrant liabilities of $33 million in fiscal year 2020. Next, we calculate our adjusted EBITA. For details on how we define adjusted EBITA, as well as the corresponding reconciliations to GAF, please see our earnings pressure. Total adjusted evaded deficit for the three months ending on March 31st, 2023, was 39 million, compared to a deficit for the same period in the prior year of 30 million. The total adjusted evita deficit for the 12-month period was 161 million compared to a deficit for the same period in the prior year of 151 million.

Speaker 5: The 12-month increase in net loss was primarily due to the higher operating expenses discussed previously and the favorable change in fair value of warrant liabilities of $33 million in fiscal year 2022.

Speaker 5: Next, our adjusted EBITDA. For details on how we defined adjusted EBITDA, as well as the corresponding reconciliations to GAAP, please see our earnings press release.

Speaker 5: Total adjusted EVA to deficit for the three months ended March 31, 2023 was $39 million compared to a deficit for the same period in the prior year of $30 million.

Speaker 5: Total adjusted EVA deficit for the 12 month period was $161 million compared to a deficit for the same period in the prior year of $151 million.

Joseph Selsavage: We end the quarter with 387 million in cash and cash equivalents, compared to 553 million as of March 31st, 2022. As always, we are actively evaluating the use of our capital for both our consumer and therapeutic businesses, including responsibly opting in and out of therapeutic programs based on opportunity potential and timing of returns as appropriate given market conditions. Now turning to our guidance.

Speaker 5: We ended the quarter with $387 million in cash and cash equivalents compared to $553 million as of March 31, 2022. As always, we are actively evaluating the use of our capital for both our consumer and therapeutics businesses. We are also evaluating the use of our capital for both our consumer and therapeutics businesses.

Speaker 5: including responsibly opting in and out of therapeutic programs based on opportunity, potential, and timing of returns as appropriate given market conditions. Now turning to our guidance. The company's full-year fiscal 2024 guidance is based on a conservative approach, recognizing the current uncertainties in the general economy and financial markets.

Joseph Selsavage: The company's full year fiscal 2020 guidance is based on a conservative approach, recognizing the current uncertainties in the general economy and financial markets. Within the existing consumer businesses of PGS and Telehealth, the company is prioritizing the minimization of cash burns and margin expansions over initiatives and tenets to create incremental top-line growth. For those areas of the business expected to drive future growth, which include the company's new genomic health services and therapeutics, the company plans to focus on the most strategically and financially valuable allocation of capital and invest appropriately.

Speaker 5: Within the existing consumer businesses of PGS and Telehealth, the company is prioritizing the minimization of cash firms and margin expansion over initiatives intended to create incremental top-line growth. For those areas of the business expected to drive future growth, the company is prioritizing

Speaker 5: which include the company's new Genomic Health Services and Therapeutics, the company plans to focus on the most strategically and financial valuable allocation of capital and invest appropriately.

Joseph Selsavage: Given the company's shift in focus to higher margins rather than volume growth, as well as the end of the target discovery term of the GFA collaboration, the company does not foresee meaningful revenue contribution from these areas of consumer in fiscal 2025. Revenue Guidance for Fiscal Year 2024, which will end on March 31, 2021, and 2024, is projected to be in the range of $255 million to $280 million, with a net loss in the range of $340 million to $365 million.

Speaker 5: Given the company's shift in focus to higher margins rather than volume growth, as well as the end of the target discovery term of the GSA collaboration, the company does not foresee meaningful revenue contributions from these areas of consumer in fiscal 2024.

Speaker 5: Revenue guidance for fiscal year 2024, which will end on March 31, 2024, is projected to be in the range of $255 million to $280 million, with a net loss in the range of $340 million to $365 million.

Joseph Selsavage: Full year adjusted, the EBITA deficit is projected to be in the range of 170 million euros to 195 million euros for fiscal year 2025. The adjusted EBA guidance assumes the following. We will continue to advance our therapeutic assets. Second, we will not receive any additional revenue from strategic partnerships. And third, no savings incurred from cost reduction initiatives, such as those related to the evaluation of opting in or out of our GSK programs, licensing or partnering on our therapeutics programs, or other internal operating cost reduction. Adjusted EBTA is our best proxy for cash firms, and we do not assume any use of our ATM programs.

Speaker 5: Full year adjusted EBITDA deficit is projected to be in the range of $170 million deficit to $195 million deficit for fiscal year 2024.

Speaker 5: The adjusted ABA guidance assumes the following. We will continue to advance our therapeutics assets.

Speaker 5: Second, no additional revenue from strategic partnerships. And third, no savings incurred from cost reduction initiatives such as those related to the evaluation of opting in or out of our GSK programs, out-licensing or partnering on our therapeutics programs, or other internal operating cost reductions.

Speaker 5: Adjustment EBITDA is our best proxy for cash burn and we do not assume any use of our ATM program.

Anne Wojcicki: And now, I'll turn the call back over to Ann.

Anne Wojcicki: Thank you, Joe. We continue to build toward a future where genetic information is the foundation of personalized health. We've already provided millions of people with access to critical genetic health information, and doctors are ready for it as well. A survey conducted with Medscape found that over 90% of doctors say genetics is an important part of a patient's complete health picture. I believe 23 Me has an incredible opportunity to leverage genetics to transform how we predict, prevent, and treat many diseases.

Speaker 4: And now, I'll turn the call back over to Anne. Thank you, Joe. We continue to build toward a future where genetic information is the foundation of personalized health.

Speaker 4: We've already provided millions of people with access to critical genetic health information, and doctors are ready for it as well.

Speaker 4: A survey we conducted with Medscape found that over 90% of doctors say genetics are an important part of a patient's complete health picture control does not

Speaker 4: I believe 23andMe has an incredible opportunity to leverage genetics to transform how we predict, prevent, and treat many diseases.

Anne Wojcicki: We will continue to utilize the world's largest genetic database for research to accelerate therapeutic development at scale. Developing new medicines to treat unmet needs is the ultimate fulfillment of the company's mission to help people access, understand, and benefit from the human genome. We anticipate another milestone year ahead and look forward to keeping you updated on our progress. Thank you, and now we open up the call for questions.

Speaker 4: We will continue to utilize the world's largest genetic database for research to accelerate therapeutic development at scale.

Speaker 4: Developing new medicines to treat unmet needs is the ultimate fulfillment of the company's mission to help people access, understand, and benefit from the human genome.

Speaker 4: We anticipate another milestone year ahead and look forward to keeping you updated on our progress.

Operator: To ask a question, please press star 1-1 on your telephone and wait for a name to be announced. To withdraw your question, please press 1-1 again. Please stand by, we compile the Q&A roster. One moment. And for your first question on the Comfort Line of Daniel Gross Flight from City, your line is open.

Speaker 4: Thank you, and now let's open up the call for questions.

Speaker 1: To ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.

Speaker 1: Please stand by. We'll compile the Q&A roster. One moment.

Speaker 1: In our first question. Comfort line of Daniel grorossflight from City elline is open.

Daniel Gross Flight: Hi, thanks for taking the question. Click on Partnerships. I know there's not much you can disclose until GSK ends in July, but I'm wondering if you can give us a bit of flavor around the structure of those deals or what the possibility is for the structure of those deals. Is it possible that you might be recognizing research revenue after the GSK partnership ends? And that would be an upside to your guidance, or should we just assume that there's going to be de minimis research revenue after your first fiscal quarter?

Speaker 6: Thanks for taking the question. Quick one on partnerships. I know there's not much you can disclose until GSK ends in July , but I'm wondering if you can give us a little bit of flavor around the structure of those deals or what the possibility is for the structure of those deals. Is it possible that you might be recognizing research revenue after the GSK partnership ends?

Kenneth J. Hillan: Thanks, Daniel. It's Kenneth. I can take that and then maybe I'll hand it over to Joe for the second part of your, you know, what I can say. You write that the discovery term of the GSK collaboration will end towards the end of July of 2023, although, of course, the ongoing programs will continue as part of the collaboration. What I can say is that, you know, new partnerships are a top priority for us to make sure that we, you know, keep advancing those opportunities, and we intend to provide you with more information on those as we move forward.

Speaker 7: Discovery term of the GSK collaboration will end towards the end of July of 2023, although of course the ongoing programs will continue as part of the collaboration. What I can say is that new partnerships are a top priority for us to make sure that we keep advancing those opportunities and we intend to provide you with more information on those as we move forward.

Kenneth J. Hillan: We've certainly been pleased with the amount of interest that we have from potential collaborative partners. And, as Anne announced, we're very excited about Riza Kami joining us as our chief corporate development officer. I think it's really good timing for him to not be here given all of his experience in setting up partnerships. So all I can really say is that we look forward to updating you when there are material partnership deals signed, and maybe I can pass on to you about that revenue question.

Speaker 7: We've certainly been pleased with the amount of interest that we have from potential collaborators. As Anne announced, we're very excited about Rizav Kamy joining us as our Chief Corporate Development Officer. I think it's really good timing for him to be here given all of his experience in setting up partnerships.

Speaker 7: So all I can really say is that we look forward to updating you when there are material partnership deals signed and maybe I can pass on to you about that revenue question.

Joseph Selsavage: Thank you, Kenneth. Daniel, on revenue, you know, in our adjusted EBIT guidance, we included the final quarter or final revenue between, you know, April 1st and the end of the GSK collaboration in July. You know, as Kenneth mentioned, we're continuing to, you know, engage in, basically, pursuing additional partnerships and collaborations. And once we actually sign a deal, we will then, you know, announce what we do, and adjust our revenue guidance.

Speaker 5: Thank you, Dennis. Daniel, on revenue, you know, in our adjusted EBITD guidance, we included the final quarter or final revenue between, you know, April 1st and the end of the GSA collaboration in July . You know, as Kenneth mentioned, we're continuing to, you know, engage in, you know, basically.

Speaker 5: pursuing additional partnerships and collaborations. And once we actually sign a deal, we will then, you know, announce, you know, what, and adjust our revenue guidance based on that.

Joseph Selsavage: Our revenue guidance is based on that. Yeah, that makes sense.

Joseph Selsavage: And maybe we can stick with the 24 guide, but really looking at EBITDA and the segmentation there, is $23 million about the right burn rate for the therapeutic spend on a quarterly basis? And then on the consumer side, when do you expect to be adjusted at EBITDA positive on an LTM basis? And then last one there, if I could just throw it in.

Speaker 6: Yeah, that makes sense. Maybe we can stick with the 24 guide, but really looking at EBITDA and the segmentation there, is $23 million about the right burn rate for the therapeutic spend on a quarterly basis. And then on the consumer side,

Speaker 6: When you expect you'll be adjusted EBITDA positive on an LTM basis. And then last one there, if I could just throw it in. I see in your press release you're expecting around 150 million in stock based comp for fiscal 24. That's a step up from 23. I think the street's just been more focused on that more recently. So

Joseph Selsavage: I see in your press release that you're expecting around $100,000 to $150 million in stock-based comp for fiscal 24. That's a step up from 23. I think the street's just been more focused on that more recently. So just curious if you could also lay out your philosophy around stock-based comp and how you use that, the potential dilution there.

Speaker 6: Just curious if you could also lay out your philosophy around stock-based comp and how you use that for the potential dilution there.

Joseph Selsavage: Okay, so, you know, therapeutics adjusted EBITAM, you know, we noted, you know, in RK that, you know, basically, you know, essentially, that is approximately the, you know, adjusted EBITU deficit per quarter, right? And, you know, as we continue to invest in therapeutic assets, you know, that potentially could increase, you know, as we do drug development. You know, from a stock-based compensation perspective, there were a couple changes this year which drove, you know, the increase in stock-based compensation.

Speaker 5: Okay, so therapeutics adjusted EBITDA. We noted in our case that basically

Speaker 5: you know, essentially, you know, that is approximately the, you know, adjusted EBITDA, that's the per quarter, right? And, you know, as we continue to invest in therapeutic assets, you know, that potentially could increase, you know, as you know, as we do drug development.

Speaker 5: From a stock-based compensation perspective, there was a couple changes this year which drove the increase in stock-based compensation. First was essentially as we grow as a public company, we actually gave refresh grants and new hires grants in stock-based comp. And second, we instituted a bonus program.

Joseph Selsavage: The first was, you know, essentially, as we grow as a public company, we actually gave refresh grants and new hire grants in stock-based compensation. And second, we instituted a bonus program, which also is being paid out in RSUs, as we want to make sure that employees are, you know, in the company, and so that also increased our stock-based costs.

Speaker 5: which also is being paid out in RSUs as we want to make sure that employees are invested in the company and so that also increased our stock-based costs.

Joseph Selsavage: Okay, and then on the consumer side, when do you expect to be EBIT-positive on an LTM basis there?

Joseph Selsavage: And we don't have a specific date on when we will be cash flow positive. As we mentioned, you know, and, you know, basically in our comments, we are actually driving towards that goal. And you can see, you know, in our 10-K that we've made meaningful progress on that in fiscal year 20203. And we'll be continuing towards that goal in fiscal year 2012.

Speaker 5: Okay, and then on the consumer side, when do you expect to be EBITDA positive on an LTM basis there? We don't have a specific date on when we will be cash flow positive. As we mentioned, basically in our comments, we are actually driving towards that goal.

Speaker 5: And you can see, you know, in our 10K that we made meaningful progress on that in fiscal year 2023, and we'll be continuing towards that goal in fiscal year 2024.

Speaker 5: in our 10K that we made meaningful progress on that in fiscal year 2023. And we'll be continuing towards that goal in fiscal year 2024. Got it. Thanks for the color.

Operator: Got it. Thanks for the color. One moment for the next question.

Speaker 8: One moment for our next question.

Speaker 8: One moment for our next question.

Operator: And our next question will come from Callan. Your line is open. Good. Thanks.

Unknown Attendee: Great. Thanks for taking the questions. A question on the Novartis collaboration on Lipopotein A. You know, appreciate that it's a blood-analyte test, not a genomic test. Is that going to be something you guys run in your Klee lab, or are you going to outsource to a third party? And then can you give a bit more color on how exactly you and Novartis are going to be, you know, monetizing this offering?

Speaker 1: And our next question will come from the line of Steven Ma from Callan. Your line is open. Great. Thanks for taking the questions. Question on the Novartis collaboration on lipoprotein A. You know, I appreciate that it's a blood-analite test, not a genomic test. Is that going to be something you…

Anne Wojcicki: I can take the first part of it. So yes, we, it is absolutely correct. We do not have that as part of our existing business; it's not part of genetics. So we are actively looking for, you know, how we're going to enable our customers to be able to get access to blood. So that is something that came as part of the lemonade acquisition and something that we are definitely going to make sure it's feasible as part of this. So what I do look at, like strategically, when I think about a program like this Novartis collaboration, 23 Me is incredibly good at engaging customers. You know, we have 13 million plus customers.

Speaker 4: I can take the first part of it. So, yes, it is absolutely correct. We do not have that as part of our existing... It's not part of genetics. So, we are actively looking for, you know, how we're going to enable our customers to be able to get access to blood. So, that is something that came as part of the lemonade acquisition and something that we are definitely...

Speaker 4: going to make sure it's feasible as part of this. So what I do look at, like strategically, when I think about a program like this Novartis collaboration, 23andMe is incredibly good at engaging customers. You know, we have 13 million plus customers. We have an incredible way of contacting individuals, sending them information.

Anne Wojcicki: We have an incredible way of contacting individuals, sending them information, and we have educated millions of people about the power of genetic information. So we have the ability now to do that with other people, indications, and, like you know, lipoprotein little is a good example of where I think we can really educate, bring people in, and drive awareness around the testing. So it is it's early with that type of collaboration, but I think that there's a lot of interest overall in the entire sector about lipoprotein little a lay. And I think there's a lot, there's a real role for 23 me to drive a lot of that awareness.

Speaker 4: we have educated millions of people about the power of genetic information. So we have the ability now to do that with other.

Speaker 4: indications and like you know lipoprotein little a is a good example of where I think we can really educate Bring people in and drive awareness around the testing So it is it's early with that type of collaboration But I think that there's a lot of interest overall in the entire sector about lipoprotein little a and I think there's a lot

Kenneth J. Hillan: And maybe, Anne, maybe I can just add, if that's okay, just one of the really interesting things about LypoCotein Lidl-A is that it's not just an important risk factor, but it's audible. So actually, you know, with more than 14 million genotype customers, we have the potential ability to predict those people who may be at greatest risk of having elevated levels. And then, as Anne said, what we then, you know, through our lemonade health telehealth platform, would have the potential to do.

Speaker 4: there's a real role for 23andMe to drive a lot of that awareness.

Speaker 7: And maybe, Anne, maybe I can just add, if that's okay, just I think one of the really interesting things about lipoprotein little a is it's not just an important risk factor but it's also. So actually, you know, with more than 14 million genotype customers, we have the potential ability to predict those people who may be at greatest risk of having elevated levels. And then at the end.

Kenneth J. Hillan: and go on to get blood levels of lipoprotein, middle E. So I think it's really putting the genetics and the telemedicine platform together that really adds a lot of power there. Okay, yeah, no, yeah, that makes

Speaker 7: You know said what we then you know through our eliminate health telehealth platform Would have the potential to then go on to get blood levels of lipoprotein little a so I think it's really putting the genetics And the telemedicine platform together that really adds a lot of power there Okay, yeah, no that yeah that makes a lot of sense. Do you envision?

Anne Wojcicki: Do you imagine this being a model for the integrated genetic services and the lemonade PCP offering and, you know, and, you know, along the same lines, have you guys finalized the rollout strategy for the Genomic Health Services business?

Anne Wojcicki: We definitely see this, you know, this is a good example of where I think we can leverage all the assets of 23ME and lemonade and actually bring that also to a partner like Novartis. So I think that this is absolutely something that we've actually done historically in the past, where we have recruited individuals who have a specific genotype or a specific phenotype, and we've done that for either academic partnerships or therapeutic pharmaceutical partnerships.

Speaker 4: see this, you know, this is a good example of where I think we can leverage

Speaker 4: all the assets of 23andMe and Lemonade and actually bring them also to a partner like Novartis. So I think that this is absolutely something that we've actually done historically in the past where we have recruited individuals who have a specific phenotype or a specific phenotype and we've done that for either academic partnerships or therapeutic pharmaceutical partnerships. But we have that ability to do a lot more now with the Lemonade acquisition being able to have.

Anne Wojcicki: But we have that ability to do a lot more now with the lemonade acquisition, being able to have people being able to order tests, add additional kinds of follow-up, and types of testing. So, we do look at actually doing, I think there's a real opportunity to do more and more of this. So what was your second question again?

Speaker 4: people being able to order tests, add additional kind of follow-up, different kinds of testing. So

Unknown Attendee: Oh, on the genomic health services, the formal strategy. Just wondering when we should expect to get some details.

Speaker 4: We do look at actually doing, I think there's a real opportunity to do more and more of this. So what was your second question again?

Speaker 4: On the genomic health services, the formal strategy, just wondering what we should expect to get some details. Well, you're going to, you'll start to see things that are starting to come together now. For instance, like more and more being able to have, you know, we've already announced before that we have certain reports where you can get a physician consult. Mental health is a big area of prioritization for us because that's something that we need to be aware of.

Anne Wojcicki: Well, you're going to, you'll start to see things that are starting to come together now, for instance, like more and more being able to have, you know, we've already announced before that we have certain reports where you can get a physician consult. Mental health is a big area of prioritization for us because that's something that is a real need. Genetics plays a real role in making sure you get the right kind of medication.

Anne Wojcicki: We have clinicians who are well-trained, and we also have a pharmacy so we can make sure you get the right medication based on your genomes. So that is a high priority area for us to be focusing on, and you'll see more rollouts in the second half of the year.

Unknown Attendee: Okay, great. And if I can sneak a quick one in, given your comments, it looks like the consumer seems to be appreciating the value add from the 23 of Me offerings. You know, given that, do you expect that you can continue to reduce sales and marketing expenses? Thank you.

Speaker 9: of the year.

Speaker 1: Okay, great. And if I could sneak a quick one in, you know, given your comments, it looks like the consumer seems to be appreciating the value add from the 23andMe offerings. Given that, do you expect that you can continue to reduce sales and marketing expenses? Thank you.

Anne Wojcicki: I think that we're focusing on making sure that sales and marketing is more efficient. So we definitely, you know, you can see we've pulled away from some of our top-level brand spending, but really focusing on the sales and marketing then is going to be really efficient and being very aware of what the customer acquisition costs are. Joe, anything to add to that?

Speaker 4: I think that we're focusing on making sure that sales and marketing is more efficient. So we have definitely, you know, you can see we've pulled away from some of our top-level brand spending, but really focusing on the sales and marketing that is going to be really efficient and being very aware of what the customer acquisition costs are. Joe, anything to add on that? And, you know, essentially, I think the other thing to add, as Ann said, you know, we are looking at being efficient in our marketing spans, growing margins, and for us, you know, we'll continue to invest in the business.

Joseph Selsavage: And, you know, essentially, I think the other thing to add is Anne said, you know, we are looking at being efficient in our marketing spans, growing margins. And for us, we'll continue to invest in new sales in marketing if we can drive, you know, additional margins. Yeah, and just to emphasize that, I see

Anne Wojcicki: Yeah, and just to emphasize that, I see a huge opportunity with the combination of genomics and lemonade, telemedicine, and pharmacy, you know, and I think there are opportunities for us to recruit new individuals, new customers, and there's also a huge amount of opportunity to focus all of that within the 14 million customers that we do have. So there's a lot of opportunities, I think in both those segments, internal and external, and obviously, there's different acquisition costs between those different types.

Speaker 4: the 14 million customers that we do have. So there's a lot of opportunities, I think on both those segments, internal and external, and obviously there's different acquisition costs between those different groups.

May: Thank you. Now, I'll turn it over to May for any further questions.

Speaker 1: Okay, thank you. Thank you. Now I'll turn it over to Mae for any further questions.

May: We have a few questions from investors that came in through our Q&A platform that we use through State Technology. I'm now going to ask those top questions that we got on the platform for the management team to answer. The first question is, Any exciting news pertaining to post GSA exclusivity? Can you provide any details, or at least the date on which something will be announced?

Speaker 2: Thank you. We have a few questions from investors that came in through our Q&A platform that we use through State Technologies.

Speaker 2: I'm now going to ask those top questions that we got on the platform for the management team to answer.

Speaker 2: to ask those top questions that we got on the platform for the management team to answer. The first question is,

Speaker 7: Any exciting news pertaining to post GSK exclusivity? Can you provide any details or at least the date on which something will be announced? Yes, Kenneth, I'm happy to take that and just to reiterate, I don't have any exciting news for today, but what I can say is we're very pleased with the progress we're making in terms of ongoing progress.

Kenneth J. Hillan: Yes, Kenneth, I'm happy to take that. And just to reiterate, you know, I don't have any exciting news for today, but what I can say is we're very pleased with the progress we're making in terms of ongoing potential partnership discussions. This really is a very important priority for us to find those right strategic partnerships when that GSK target discovery exclusivity period ends towards the end of July of 2023. You know, I think we've got really great timing with Razat Afkami joining us at 23 and me as our chief corporate development officer. He is now leading those efforts and securing the most productive collaborations possible. And we look forward to updating you when there are material partnership deals signed.

Speaker 7: potential partnership discussions. This really is a very important priority for us to find those right strategic partnerships when that GSK target discovery exclusivity period ends towards the end of July of 2023. I think we've got really great timing with Reza, Afkami, John .

Anne Wojcicki: Great. Next question. Is there a plan to start integrating lemonade services into the 23 and Me app, creating new services for those with an annual plan?

Speaker 2: Great. Next question. Is there a plan to start integrating lemonade services into the 23andMe app, creating new services for those with an annual plan?

Anne Wojcicki: And I can take that one. Yes, you know, do you want me to say, I'll take that one, Joe, and I'll hand it to you?

Anne Wojcicki: Yes, there's definitely a plan to start integrating the lemonade services into a 23Me app and, you know, having a holistic experience where people can learn about their genome, think about, or get access to care if they need it, and also think about pharmacy. And one of the big sweet spots for 23Me is really being able to engage people holistically in very proactive preventative care.

Speaker 4: And I can take that one. Do you want me to take? I'll take that one, Joe, and then I'll hand it to you. Yes, there's definitely a plan to start integrating the Lemonade services into a 23andMe app and, you know, having a holistic experience where people can learn about their genome, think about, you know, get access to care if they need it.

Speaker 4: and also think about pharmacy. And one of the big sweet spots for 23andMe is really being able to engage people holistically in a very proactive preventative care, so that personalized preventative care. So that, I think, is a real exciting market opportunity for us to be able to combine all those services into that kind of very targeted approach for people.

Anne Wojcicki: So that, I think, is a real exciting market opportunity for us to be able to combine all those services into that kind of very hard-based approach for a little bit to have a couple of possible. So that's the former rule over the components of most services in the short term and even if we have to be able to have them. coverage versus conditions for our test, and they say that kind of test of services for the first member is that we could be in the time of medical service. Joe, do you want to jump in? Sure.

Speaker 4: Joe, do you want to jump in?

Joseph Selsavage: Sure, and he said, you know, we are going to continue bailing out these features and integrating lemonade. And, you know, based on our leadership and our dedicated product team, we tend to focus on the evolution of our business and improve, you know, one, our products, you know, but basically, as we said, trying to improve margins and generate revenue growth, but really just trying to add value for our customers.

Speaker 5: Sure, and you know, as Ann said, you know, we are going to continue building out these features and integrating lemonade. And based on it, with our leadership of our dedicated product team, we tend to focus on the evolution of our business and how to improve, one, our products, but basically generating, as we said, trying to improve margins and generating revenue growth, but really just trying to add value for our customers. I think for us, particularly exciting is our focus on integrating lemonade.

Joseph Selsavage: I think, you know, for us, particular excitement is focused on integrating lemonade services and resources along with 23 needs, areas of unmet needs, such as mental health. And one reason we're really excited, too, is that, you know, with our, you know, new product growth, we are basically focusing on subscriptions and really trying to, you know, look at long-term consumer engagement and really providing, you know, basically services that will, you know, add value to customers and add value for us. Thank you.

Speaker 5: services and resources along with 23andMe to areas of unmet need such as mental health. And one reason we're really excited too is with our new product growth is basically focused on subscriptions and really trying to look at long-term consumer engagement and really providing services that will help.

May: Okay, the next question is, what is the long-run business outlook for 23 and me, and what are your plans to become profitable?

Speaker 5: add value to customers and add value for us as well.

Speaker 2: Okay, next question is, what is the long-run business outlook for 23andMe, and what are your plans to become profitable?

Joseph Selsavage: And we continue to make strides, you know, to realizing a future where genetic information becomes a foundation of personal health. Our team is keenly focused on disrupting the healthcare experience by building a personalized health and wellness experience that caters to individuals and utilizing our platforms to accelerate therapeutics research and development at scale. As I mentioned earlier, you know, we made great strides in fiscal 2012, 23, you know, in moving the consumer and research segments to be, you know, to an improvement in getting towards cash flow positive, and this isn't meant to make additional progress in fiscal year 2024.

Speaker 5: And we continue to make strides, you know, to, you know, realizing a future where, you know, genetic information becomes a foundation of personalized health.

Speaker 5: Our team is keenly focused on disrupting the healthcare experience and by building a personalized health and wellness experience that caters to individuals and utilizing our platform to accelerate therapeutics research and development at scale. As I mentioned earlier, we made great strides in fiscal year 2023 in the case of COVID-19.

Speaker 5: moving the consumer and research segments to be, you know, on to a improvement and getting towards cash flow positive. And those are intended to make additional progress in fiscal year 2024. You know, in therapeutics, you know, basically,

Joseph Selsavage: You know, in therapeutics, basically, Fairbios will require investment as we continue to progress our assets through the development drug cycle. And, but, you know, we are going to continue to really take a look at being good stewards of capital and really looking at the evaluation of opting in and out of our programs, partnering, and out licensing as appropriate to make sure we're allocating capital to the best. ROI for shareholders.

Speaker 5: You know, therapies will require investment as we continue to progress our assets, the development drug cycle. But, you know, we are going to continue to really take a look at, you know, being stewards of capital and really looking at the evaluation of opting in and out of our programs, partnering, and outlicensing is appropriate to make sure we're allocating capital.

Kenneth J. Hillan: Next question: with AI advancing so much, how is 23 and me currently or planning to implement AI into its practice? Yeah.

Speaker 5: to the best ROI for shareholders.

Speaker 2: Next question, with AI advancing so much, how is 23andMe currently or planning to implement AI into its practices?

Kenneth J. Hillan: Yeah, it's Kenneth. I'm happy to take that. You know, as you can imagine, with the enormous database and dataset that we have at 23, and AI is already very much an integral part of what we do, and we leverage AI capabilities in a number of areas across our business. You know, I think the recent progress that's been made with things like CATGPT, natural language processing, and chatbot-driven AI technologies. You can imagine, you know, we were just talking about the integration of medicine, primary care, genetics, and then, you know, working with customers and patients, that that can really potentially transform that space.

Speaker 7: Yes, Kenneth, I'm happy to take that. As you can imagine with the enormous database and dataset that we have at 23andMe, AI is already very much an integral part of what we do, and we leverage AI capabilities in a number of areas across our business.

Speaker 7: I think the recent progress that's been made with things like chat GPT, natural language processing, chatbot driven AI technologies, you can imagine, we were just talking about the integration of medicine, primary care, genetics, and then working with customers and patients.

Kenneth J. Hillan: And we believe that 23Me is really uniquely placed to take advantage of this. For example, we believe it will help us. in our PRS research, automating functions within the business at scale, and also helping us, I think, interestingly, in different ways with our drug discovery and development processes. So, you know, we're optimistic that this is going to enable us to deliver products and services at scale in the way that we think we're uniquely placed to take advantage of this in a competitive way at the company. It was very exciting.

Speaker 7: that that can really potentially transform that space. And we believe that 23andMe is really a uniquely place to take advantage of this. For example, we believe it will help us in our PRS research, automating functions within the business at scale, and also helping us, I think, interestingly, in different ways.

Speaker 7: with our drug discovery and development process. So, we're optimistic this is going to enable us to deliver products and services at scale in the way that we think we're uniquely pleased to take advantage of this in a competitive way at the company.

Speaker 7: and development process. So we're optimistic this is going to enable us to deliver products and services at scale in the way that we think we're uniquely pleased to take advantage of this in a competitive way at the company. Very exciting.

Joseph Selsavage: Okay. And the final question, considering your financial position, do you believe you will require a dilutive capital raise anytime in the future?

Speaker 5: Okay, and final question. Considering your financial position, do you believe you will require a diluted capital raise anytime in the future? 23andMe has a strong current cash position with $387 million in cash and cash equivalents as of March 31, 2023.

Joseph Selsavage: 23 has a strong current cash position but $387 million in cash and cash equivalence, you know, as of March 31st, 2021, and 2020. You know, our full-year-adjusted EBITA deficit is projected to be in a range of $170 to $195 million per fiscal year 2024. And that number, as I mentioned earlier, basically assumes that we're going to continue to advance all of our current therapeutic assets and does not assume any additional revenue from new strategic partnerships, nor does it include any savings from any potential cost reduction initiatives that I had mentioned earlier.

Speaker 5: Our full year adjusted EBITDA deficit is projected to be in the range of 170 to 195 million for fiscal year 2024. And that number, as I mentioned earlier, basically assumes that we're going to continue to advance all of our current therapeutic assets and does not assume any additional revenue from new strategic partnerships.

Joseph Selsavage: You know, our adjusted EBIT is our best proxy for cash burn, and so that just gives you a sense of what our cash position and runway look like. And it's a reasonably good period of time that will give us the ability to execute upon a lot of our goals on the consumer side as well as on our therapeutics portfolio. But that said, we will be opportunistic and evaluate our options as it relates to fundraising going forward.

Speaker 5: And nor does it include any savings from any potential cost reduction initiatives that I mentioned earlier. Our adjusted EBIT is our best proxy for cash burn. And so that just gives you a sense of what our cash position and runway looks like. And it's a reasonably good period of time that will give us the ability to execute upon a lot of our goals.

Speaker 5: on the consumer side as well as on our therapeutics portfolio. With that said, we will be opportunistic and evaluate our options as it relates to fundraising going forward. All right. Thank you, everyone, for joining us. We look forward to updating you on 23andMe's progress on both the consumer business and the consumer side.

Unknown Executive: All right, thank you everyone for joining us. We look forward to updating you on 23 and Meath Progress in both the consumer business and