23andMe Q2 2024 Earnings Call Transcript

There are 6 speakers on the call.

Operator

Hello, and welcome to 23andme's Fiscal Year 20 24 Second Quarter Financial Results Conference Call. As a reminder, this call is being recorded. At this time, all participants are in a 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 Ian Cooney, Senior Director of Investor Relations at 23andme to lead off the call.

Operator

Thank you. Please go ahead.

Speaker 1

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 Q2. A replay of today's webcast will also be available on our website. 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.

Speaker 1

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. We also discuss certain non GAAP measures. Important information on our use of these measures and reconciliation to U.

Speaker 1

S. GAAP may be found in our earnings release. Joining us on our call today are Ann Wachicki, our Chief Executive Officer and Co Founder and Joe Selzevich, our Interim Chief Financial and Accounting Officer Bill Richards, our Head of Therapeutics Discovery and Jennifer Lowe, our Head of Therapeutics Development will join us for Q and A. I'd now like to turn the call over to Anne.

Speaker 2

Thank you, Ian. To kick off the call, I would like to start with an update on our strategy. 23andme's mission has always been to help people access, understand and benefit from the human genome. The 23.me brand is most known for how we transformed access to genetic information and enabled over 14,000,000 people to learn about themselves, Over 80% of our 14,000,000 customers trust and consent to using their genetic information and phenotypic insights for research, Creating the world's largest set of recontactable genotypic and phenotypic data in the world. We have a world class team of statistical geneticists, Bioinformaticists, computational biologists and data scientists leveraging the data to create consumer products and Discoveries for Therapeutics Development.

Speaker 2

As a reminder, we have 3 main businesses powered by our database in creating a new future for Healthcare powered by DNA. First, our Consumer business, where we are taking a precision health approach in generating insights to help customers improve their health and health span based on their unique genotypic and phenotypic profiles. We are moving toward a more subscription based Longitudinal model, so we can have a positive impact and help our customers take action to improve their health over time. The subscription business also offers a much more sustainable and attractive operating model for us to create value for our customers and investors. 2nd, our Research business.

Speaker 2

This is where we are in discussions with collaborators in Pharma, Biotech and Adjacent Industries to sell them licenses to our database. They can then come up with their own insights to help make drug discovery and development where for the past 7 years, we have interrogated our database to pursue targets and develop therapeutics that will hopefully one day help Many of our customers directly. We currently have 1 immuno oncology asset in the clinic in Phase IIIa with encouraging early efficacy activity. Another I O asset with a particularly exciting profile and a pipeline of molecules targeting immunology and inflammation in the discovery phase. We focus the business on creating value from our dynamic data assets and expect to continue to do so in the future.

Speaker 2

As we move toward building a model that helps our customers take Action from their genetic and health data, we aim to meaningfully increase the percentage of subscription based offerings, so we can provide long term value and insights to our customers. As therapeutics assets develop, we expect to partner them out to create near term and longer term value inflections for our shareholders, while also getting them in the best hands to develop through approval and commercialization for the eventual benefit of our customer. Moving to the Q2 and recent events. Yesterday, we launched a new subscription membership called Total Health, a continued effort to be the world's best at risk prediction. Total Health is our most advanced prevention based health membership It includes clinical grade exome sequencing, biannual blood testing and access to clinicians with unique training in genetics.

Speaker 2

Members of Total Health will also receive all the reports and features offered in our existing 23 andMe Plus membership. Through the combination of comprehensive genetic data, blood biomarkers, personal and family health history and Genetics trained clinicians, Total Health will provide members with personalized guidance for ongoing disease prevention and early detection. This membership is for the consumer looking for access to advanced genetic risk testing, so they can focus on ongoing health management through direct access to mitigate or prevent disease. This is Precision Health with the support of a clinician who specializes in genetics. In addition to the launch of Total Health, we continue to add more value to our Last month, we introduced 23.me Health Action Plan, a new digital feature that draws on your Personalized genetic reports, health history survey data as well as blood and biomarker data to provide tailored In addition to suggestions on altering activities like sleep, Diet and exercise, eligible members may also receive recommendations for further clinical actions like getting a blood test, which now can be ordered directly through 23andme.

Speaker 2

We also recently launched 23andme HealthTrax, a digital health tool aimed at driving behavior change by integrating lifestyle and genetics into a single model for the first time. In July, we launched a new FDA cleared pharmacogenetics report for 23 me plus numbers on a commonly prescribed statin called Simvastatin. In 2020, about 8,000,000 people in the U. S. Were prescribed simvastatin, making it among the most prescribed medications in the U.

Speaker 2

S. This new report allows people to understand how their genetics may impact how they respond to the statin and whether or not they may experience side effects. We had another milestone FDA clearance in August to report additional BRCA variants for all 23andme Health Plus with ANSYS three customers. This allows us to report 41 additional variants in the BRCA 1 and BRCA 2 genes known to be associated with higher risk for breast, ovarian, prostate and pancreatic cancer. Many of these additional variants occur more often in populations that have traditionally been underserved by genetic testing, including the African American and Hispanic Latino Communities.

Speaker 2

As part of the FDA clearance, we were also granted the first ever FDA Predetermined change control plan, allowing us to update our Braca report with additional validated variants without additional premarket review. You can begin to see the significant investment we've been making in our product and report innovation within our Consumer business over the last few months. This includes continuing to provide value in the form of membership services, while expanding margins. We've seen better than expected results after increasing our kits and subscription pricing with higher margins partially offsetting reduced kit sale volume. Transitioning to therapeutics.

Speaker 2

We completed the restructuring of the organization with a clear focus on the areas where we believe our data provide us with the greatest strategic advantage. This includes continuing to advance our immuno oncology assets, Certain programs stemming from the GSK collaboration as well as focusing on the immunology and inflammation therapeutic areas. This allows us to pursue the most impactful programs in the most efficient manner in terms of capital and resources. In Q1, we discussed pursuing non exclusive collaborations with pharmaceutical companies for target discovery. We continue to pursue these collaborations across an array of structures and are excited about the opportunity to attract multiple and varied partners in this business.

Speaker 2

Last week, we announced progress in this area with a new 1 year non exclusive data license with GSK, which extends our collaboration. Under the agreement, we will receive a $20,000,000 upfront payment, which enables GSK to conduct drug target discovery and other research using the 23andme database. The license also includes access to certain research services such as further analyses of the 23andme data set not provided in the core data release. The collaboration with GSK has been hugely successful and this collaboration extension validates the power of the 23.me database to consistently produce novel insights for therapeutic development rooted in human genetics. As part of this agreement, we have made the strategic decision to take the royalty option in lieu of the opt in on 3 programs we previously initiated together, which will help us reduce our cash burn and allow us to focus on our wholly owned programs.

Speaker 2

We also continue to advance our pipeline of Clinical and Preclinical Programs. Last week, we presented positive safety and preliminary efficacy data from the Phase 2a clinical trial of our wholly owned immuno oncology program 23andMe 610, an antibody targeting CD200R1. In two presentations at the Society For Immunotherapy of Cancer and Annual Meeting, We showed the therapy is well tolerated at our highest dose level. We also reported stable disease in 52% of response of valuable participants in our Phase 1 dose escalation portion of the study. This includes preliminary clinical activities of 23andme 610 and a patient with neuroendocrine cancer showing a maximum reduction of 19% in target lesions with a single lesion achieving a sustained 58% reduction in the longest dimension.

Speaker 2

The participant continues on study drug Past 40 weeks with stable disease at the time of data cutoff. Overall, we've demonstrated that 23me-six ten is well tolerated and shows promising preliminary efficacy in patients with advanced solid malignancies. We are continuing to enroll the Phase 2a portion of the trial and anticipate reporting further data next calendar year. We are also continuing to advance a preclinical program P-fourteen, an investigational antibody that has dual mechanism targeting ULB P6, 5 and 2 to restore anti tumor immunity through NK and T cells and inducing Fc receptor mediated With these programs advancing, the extension of our GSK collaboration and our streamlined focus on immunology and inflammation, We're excited about the progress and direction of our therapeutics group. In closing, I'd like to provide a brief update on the ongoing cyber security That we initiated early last month.

Speaker 2

Detailed information could be found in an 8 ks we filed with the SEC and on our blog. At this time, we do not have any indication that there has been a data security incident within our own systems. Data privacy and security remain a top priority. We have recently required all customers utilize 2 factor authentication and we will continue to invest in protecting our systems and data. And with that, I'll turn the call over to Joe to review our financial

Speaker 3

Thank you, Anne, and hello, everyone. We remain well positioned to continue advancing our consumer and therapeutics goals. Our margin expansion momentum continued this quarter and the impact of PGS kit and subscription price increases to date has been better than expected, as Anne mentioned earlier. Revenue for the quarter was $50,000,000 representing a decrease of 34% on the strong prior year comparable. The year over year decrease in revenue was primarily due to the conclusion of our exclusive discovery term under our GSK collaboration in July, providing 1 month of collaboration revenue in the quarter compared to a full 3 months in the prior year, as well as non recurring payments from other research partners in the prior year.

Speaker 3

It also reflects our continued focus on driving improved product margins through higher average selling prices and marketing efficiency, resulting in lower overall volume of PGS kit and telehealth orders. These decreases were partially offset by continued growth in our subscription services. Looking at the composition of our revenue, consumer service revenue represented approximately 97% Total revenue for the 3 months ended September 30, 2023 and Research Services revenue, which was primarily derived from the GSK collaboration, accounted for approximately 3% of total revenue for the same period. Our gross profit for the Q2 was $22,000,000 representing a 43% decrease over the same period in the prior year. The decrease in 2nd quarter gross profit was driven primarily by the decrease in research services revenue, while subscription revenue and improved PGS kit selling prices helped to offset through continued margin accretion within their respective categories.

Speaker 3

Turning to expenses. Total operating expenses for the quarter were $101,000,000 compared to $106,000,000 in the same period in the prior year. The improvement in operating expenses was primarily driven by reductions in marketing advertising spend aimed to boost efficiency as noted previously. This improvement also reflects lower personnel related expenses following the reductions in force in June August earlier this year, as well as the disposition of Lemonade Health Limited in the UK, also in August. This decrease was partially offset by continued investment in therapeutics portfolio advancement and also includes one time severance and related charges related to the workforce reductions and transaction related expenses for the UK disposition.

Speaker 3

Looking at the bottom line, net loss for the quarter was 75,000,000 compared to net loss for the same period in the prior year of $66,000,000 The increase in 2nd quarter net loss was driven mainly by the lower Research Services revenue mentioned previously, partially offset by our improved operating expense profile and an increase in interest income from cash held in money market funds. Next, our adjusted EBITDA. For details on how we defined adjusted EBITDA As well as the corresponding reconciliations to GAAP, please see our earnings release. Total adjusted EBITDA deficit For the 3 months ended September 30, 2023 was $45,000,000 compared to $30,000,000 deficit for the same period in the prior year. We ended the quarter with $256,000,000 in cash and cash equivalents compared to $387,000,000 as of March 31, 2023.

Speaker 3

As always, we are actively evaluating the use of our capital for both the consumer and therapeutic businesses, including responsibly opting in or out of therapeutics programs based on opportunity potential and timing of returns as appropriate given market conditions. Now turning to our guidance. As a reminder, the company's full year 2024 guidance is based on a conservative approach, recognizing current uncertainties in consumer sentiment, the macroeconomic environment and geopolitical conditions. Our focus within the existing lines of the TGS and Telehealth Consumer businesses remains unchanged. We continue to prioritize margin expansion and progressing towards cash flow profitability.

Speaker 3

These efforts include ongoing value additions to our current services like the recently announced Health Track and Health Action Plan features within 23andme plus The newly launched Total Health membership, our most advanced and comprehensive precision health service and The reorganization of our Consumer segment to streamline our expense profile. Within the therapeutics business, we continue to invest in programs We believe are most strategically and financially valuable. With the end of the exclusive discovery term under the GSK collaboration in July, We decided to narrow our discovery and development efforts to areas that best align with our core strength. This resulted in a workforce reduction in August as we realigned our resources to the revamped structure and the more recent decision to take the royalty option on several programs initiated together with GSK, which will allow us to reduce cash burn and focus on our wholly owned programs. We expect these decisions to yield meaningful economic benefit in future periods.

Speaker 3

While we're pleased with this year's progress and excited for the launch of Total Health, we remain prudent with our outlook given current uncertainties in the macro environment. Similarly, although the new GSK data license announced last week serves as further validation of our database's value, We expect the deal's $20,000,000 revenue to have minimal impact on this year's results, with the majority landing in fiscal year 2025 given the terms of the agreement. The company is partially adjusting its full year guidance for fiscal year 2024, which ends on March 31, 2024. In terms of revenue, we are updating our fiscal year 2024 guidance to be in the range of $240,000,000 to 250,000,000 with net loss reaffirmed to be in the range of $325,000,000 to $345,000,000 loss. Full year adjusted EBITDA deficit is reaffirmed to be in the range of $160,000,000 deficit to $180,000,000 deficit for fiscal year 2024.

Speaker 3

This updated outlook is a result of our commitment to delivering critical insights and values to our customers through impactful new services while improving our cash flow through better unit economics and cost discipline. Also a reminder that adjusted EBITDA is our best proxy for cash burn. And now I'll turn the call back over to Ann.

Speaker 2

Thanks, Joe. I'm optimistic as we head into fiscal year Q3. We've made incredible progress through the innovation happening within the Consumer business, both by increasing the value of our 23andme plus membership with new features and reports as well as launching Total Health, a new comprehensive subscription offering that positions us to be the world's best at risk prediction. Our therapeutics team continues to demonstrate progress advancing our pipeline of clinical and preclinical programs. And our new GSK non exclusive collaboration extension demonstrates the value of our database as we continue to pursue new opportunities with Pharmaceutical and Biotech Companies.

Speaker 2

With that, let's open it up to questions.

Operator

Thank you. One moment for our first question. It comes from Chad Wachowski with TD Cowen. Please proceed with your question.

Speaker 4

Hey, this is Chad on for Steven Martin. Just wanted to see what type of impact you expect from the cyber attack And did that attribute to the lower guidance? And if so, what steps should be taken to resolve it?

Speaker 3

I can take that question. We haven't really seen any impact on the from the cybersecurity incident on revenue to date. We're continuing to on the cybersecurity incident investigation and we don't have any specific guidance on cost estimates Of that yet or the insurance recoveries, but we'll be updating in the future in future quarters.

Speaker 2

One thing I wanted to add was just we've had a very intentional Push on revenue sorry, on margin expansion. So again, I just want to be able to push that to you as well as that are not on the cybersecurity side, but it has been very For us as a company to be disciplined with our marketing, disciplined with our costs and like really focusing on the margin expansion, which is why we took down That top line because we are not focusing as much on that top line acceleration, but really on margin.

Speaker 4

Got it. And yes, on that point, on the higher price point of Total Health, Can you speak to some of the market research you guys spent time on? How did you come to the price point? And what gives you confidence that Customers are going to be willing to pay that premium versus much cheaper 23andme plus that's obviously having Some expanded product offerings attached to it. Thanks.

Speaker 2

Yes. So I can obviously I can take that as Dan. So I There's a whole world, I think, that is out there where people are looking for access and ease of use for ways that they can make themselves And I think you see an explosion of whether it's a watch or it's a wearable of some sort or And MRI service, where people want to, get be focused on being proactive. So Total Health is all about empowering our customers to really have a comprehensive Assessment of themselves with their genetics, with blood, with medical guidance and those costs are obviously higher Like that is very different than the 23andme Health and Ancestry products that we have, but this is an ongoing. We absolutely anticipate with these customers that we are going to have an ongoing relationship with them where we can really get involved, we can coach, they can have Interactions with healthcare providers, we're going to keep following them up with blood, making sure that they're getting a level of care about themselves that's So we did do a fair amount of market research on this.

Speaker 2

We did do a fair amount of assessment of the What our pricing flexibility could be? There are obviously more costs associated with this product, but I believe there is a significant market at this price level.

Speaker 4

Thanks for the questions.

Operator

Thank you. One moment for our next question. It may come from the line of David Lebovitz with Citi. Please proceed with your question.

Speaker 5

Thank you very much for taking my question. With respect to the increased kit pricing, could you comment If it's had any impact to this point on your marketing strategy or how it might change your what you plan to do into the holiday season?

Speaker 2

So this is Anne. So I assume you mean the base pricing on the Health and Ancestry and not Total Health? I think that has definitely been a priority for us. Our customers see incredible amounts of value from The subscription product, they see a tremendous amount of value from the health and Ancestry service. So it was absolutely and if you think back on How long we had us at a 99 or 199 price point.

Speaker 2

It has been a long time since we have raised those prices. So, we're quite happy to see the response from customers, the continued uptake on our subscription part of the product That obviously as we have increased margin from all of our products that absolutely allows us the opportunity To do more with our marketing spend and particularly top of the funnel marketing spend where we can have more brand awareness. So You should definitely be looking for us to do more with TV and more marketing in Especially for holiday season and going forward.

Speaker 5

Got it. Given the nature of the Total Health product, Is there is it primarily going to be direct to consumer or is there consideration for looking into approaches maybe coming from the healthcare providers themselves, to try to grow the overall product.

Speaker 2

Yes. That's a great question. I think we're in the earliest days of launching this. It is really a soft launch so far. We see demand.

Speaker 2

We see that there is there are absolutely clinicians who are out there who would like To offer a comprehensive exome to their patients, but don't necessarily have that interpretation experience. They don't necessarily have The genetics training and that's where we could potentially partner in the future. So I would look for us to focus on direct to consumer in The short term, but absolutely we are exploring what are those additional opportunities As the product continues to go. And I just want to cite and I don't have the specific numbers in front of me, but we did talk about in the past these Medscape surveys that we did, where there is 90 plus percentage of physicians that are interested in integrating genetics into their practice. And so we see ourselves as that global leader in the delivery of genetics based preventative care.

Speaker 2

So how is it that we can enable all of those clinicians who are eager to do more to actually be able to do that? So I think this is a product that will Absolutely have a direct to consumer appeal as well as a potential health care provider appeal.

Speaker 5

Thank you. And on the $20,000,000 payment, are we going to assume that it's basically going to be paid amortized over the year, So kind of $5,000,000,000 per quarter type thing?

Speaker 3

From a cash perspective, we expect to receive $5,000,000 In Q3 and the remainder in Q4 of fiscal year 2024. From a revenue perspective, there's only a small amount in fiscal year 2024 because it will be amortized over the period of the agreement. So the majority will land from a revenue GAAP perspective in fiscal year 2025.

Speaker 5

Got it. And just jumping over to the other side of the world. You recently reported data at SITC. Could you, I guess, characterize the 52% greatest stable disease? Give us a sense of how that might translate ultimately into clinical response when you in your Phase 2a?

Speaker 2

I think the way to interpret that data, this is a Phase 1, all solid tumor cancer patients. The primary goal was to look at safety. We were very pleased to have some patients who did have A longer time on study and so we wanted to communicate that. But we are really Happy that this monotherapy, this is, these are patients who generally do not have a lot of options who have had multiple prior lines A therapy in this group that was 1 through 9. This was also during the dose escalation and so many patients were receiving such therapeutic doses.

Speaker 2

So I think this really sets us up well for the upcoming Phase 2a data that we're hoping to present that we've been enrolling this year. And I think it's just it's really also a sort of a proof that 23 andMe Therapeutics that We've created a really solid molecule that has with PK and has safety that is consistent with the mechanism of this drug.

Speaker 5

One last follow-up here. With respect to the candidate, Is there any mechanistic rationale you can provide for what cancers you might ultimately choose to target.

Speaker 2

So the nice thing about the target that we've chosen CD200R1 And it's Ligand CD200. It is expressed in a wide variety of tumor types. And these tumor That expression will probably play a role in which patients we chose to move forward with. But for the Phase 2a, The disease areas that we chose to do our expansion cohorts in was primarily driven by CD200, our 1 expression and the likely populations we would have in the late stage Phase III population.

Operator

Thank you. And now I will turn it over to Ian for any further questions.

Speaker 1

Thank you, Carmen. I will now read the top shareholder questions from our SAI Technologies platform. This one's for Anne. What are you doing to increase the value of the company?

Speaker 2

That is a great question. This is obviously a top priority for all of us within 23 andMe. I just want to remind you all, we are all shareholders. I am a large shareholder. It is a top priority for us to be able to demonstrate and get the value that we think that We all should be getting from this company.

Speaker 2

So 1st and foremost, the consumer business is full of incredible opportunity. And that is why we obviously, we have the Health and Ancestry product. We have been pivoting into a subscription product more and more for all of our customers. Total Health, I think, is the future of where we are thinking about everything. There is absolutely an opportunity to be able to have more and more people getting access And exome access to their blood, access to clinical care That is focused on prevention.

Speaker 2

So I absolutely believe there's an incredible opportunity for all of us on the consumer side. On partnership, You can see that we already did our GSK partnership, which we announced. There is a real opportunity for 23andme to be helping the entire therapeutics And research business world about how they can recruit better, how they can financially promote, how can they can leverage genetics to their drug discovery and be more efficient and more likely to be successful because of the utilization of genetics. So by being at the end of the GSK collaboration, we really have a significant opportunity now for doing those types of collaboration. So last, I am thrilled about our therapeutics team and our opportunities that we have here.

Speaker 2

The IO programs, as Jennifer just stated, I think our full potential, the SITC data I think shows that. We have our P-fourteen assets, which is slated to file an IND, short as we said shortly, as well as we have the opportunities for all of our discovery That will be wholly owned now by 23andme. So we have previously stated we focused on inflammation immunology. We have a team that has been working for years with GSK on moving from data to the end process of actually having programs in the clinics with humans Filing the INDs ourselves, actually going from, again, the very beginning all the way actually into humans. And I think that there's a huge opportunity for us there.

Speaker 2

And then last, I just want to conclude with the fact that genetics, I think is a critical part that needs to be part of everyone's Like their healthcare, how they are actually making decisions in their health as well as part of the therapeutic process. And we have we just want to reiterate that if you start with human genetic information, you are more than twice as likely to be successful with your discovery. So again, genetics should become an integral part of our life, whether it's in our personal life, in our health Or in our therapeutic life and how we are taking medications and developing medication.

Speaker 1

Thank you, Anne. Next question is for Joe. What is the company's plan to address liquidity and decrease cash burn?

Speaker 3

Thank you, Ian. I mean, 1st and foremost, the company is trying to increase its revenue and basically, as Anne mentioned, Really focused on the growth of margin. For us that means less promotions and we increased prices on our kits and subscriptions, Which has been well received by consumers and really we've seen better than expected results there. We've also launched new products. Basically, we talked a little bit about health announcing Total Health, which we launched yesterday.

Speaker 3

And then we actually announced the GSK deal, which also provided $20,000,000 in additional cash for the company. And our corporate development team is continually working on Additional potential deals as well. And then on the cost structure, we've taken significant efforts in this fiscal year to reduce our cost structure. First, we announced previously we've done reductions in force to rebalance our employee headcounts. Next is we are also working with our therapeutics team in making sure we're utilizing our capital on the assets that really will drive the most shareholder value there and help us also reduce our cash and cash burn.

Speaker 3

I mean, all of these efforts will help us decrease our cash burn and extend our current cash runway.

Speaker 1

So we're pleased with the equity efforts to date. Thanks, Joe. This one's for Jennifer. Can you The historical lack of transparency around your drug development efforts and do you plan to be more transparent moving forward?

Speaker 2

Thank you. We have been and continue to be somewhat constrained in what we can talk about with our GSK Collaboration programs and largely those we do not talk about. However, we are as you can see, we've been publishing quite a bit on 610. We will, like many other companies, continue to announce scientifically relevant data at scientific conferences. And We do have a lot of information that we're planning on disbosing just like we did at SITC last week.

Speaker 2

We're also excited to be talking more about R and D programs, the C-fourteen program. It's an NK cell activator and you're going to hear more from us about that mechanism and our plans moving forward. And finally, we're updating our therapeutics website to be launched within the next few months And that will also provide more information than we have in the past.

Speaker 1

Thank you, Jennifer. This one has already been asked in a way, but it was a Last question online, so I'll ask it again, maybe for Anne. Will the recent security incident of customer accounts affect future business opportunities in any way?

Speaker 2

Couple of things here. I want to just point out how we did just sign a new partnership Accessing the 23 andMe data set being able to leverage that for drug discovery, With partner GSK who has been obviously a longstanding partner for us. So I think that it is something that obviously We have notified individuals about, we have commented on. I think it's very important about how we react. As you can see, we also have implemented 2 factor authentication.

Speaker 2

So I think that we are learning. We are Taking the necessary steps forward to adapt to an environment where things like credential stuffing It's happening more and more. We are being very proactive about how we are thinking about data and security. And I think you can see based on collaborations that we are entering now that there is still enthusiasm. And I think based on our BD calendar and the meetings that we're doing, there is absolute enthusiasm for the projects we're doing.

Speaker 2

There is not the incident has not diminished the opportunity for genetics To still really revolutionize healthcare for consumers or for the industry.

Speaker 1

Great. Thank you. Last one, The

Speaker 2

The future of the consumer business is absolutely about subscription. And the reason for that is that we see from our customers and the The margin of behavior we've had over the last 17 years is that our customers are eager to get more. They're eager to engage and they're eager to keep learning about themselves. So for us to be able to financially support that kind of innovation and additional data that our customers are looking for, We need to evolve from a one time payment to a subscription model. And I think that both fits The needs of the company is actually having a sustainable consumer business or rather a thriving consumer business, as well as hits our customer goals of And evolve and continuously enabling themselves to learn more through their genome as well as the additional data that we provide back.

Speaker 2

So yes, the future is subscriptions, and we're very enthused about 23me plus as well as total health offerings. And I think you can look to us to continue to put more products in the subscription and add more features there.

Operator

And thank you all for participating and joining us. This concludes today's conference call And you may now disconnect.

Earnings Conference Call
23andMe Q2 2024
00:00 / 00:00