23andMe Q4 2023 Earnings Call Transcript

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Provided by Quartr
May 25, 2023

Key Takeaways

  • Consumer business expansion: Grew customer base to over 14 million (+11% YoY) and 23andMe Plus subscriptions rose 51% YoY to 640,000 members, with new health reports and a price increase to drive higher margin.
  • Therapeutics progress: Phase 1 data for the 23andMe-610 antibody showed acceptable safety and PK, leading to Phase 2a dosing in multiple cancer cohorts, with a robust pipeline and partnership discussions underway.
  • Fiscal 2023 revenue reached $299 million (+10% YoY) but Q4 revenue fell 8% to $92 million, with a net loss of $312 million and an adjusted EBITDA deficit of $161 million; FY 2024 guidance projects revenue of $255–280 million and a wider net loss.
  • Strategic shift toward prioritizing margin expansion and cash burn reduction in consumer DNA and telehealth services, while focusing capital on higher-margin genomic health and therapeutics rather than volume growth.
  • Partnership outlook: New Chief Corporate Development Officer appointed to secure collaborations post-GSK exclusivity (July 2023); Novartis collaboration on lipoprotein (a) illustrates integration of genetics with telehealth and pharmacy services.
AI Generated. May Contain Errors.
Earnings Conference Call
23andMe Q4 2023
00:00 / 00:00

There are 7 speakers on the call.

Operator

Hello, and welcome to 23andme's Fiscal Year 2023 4th Quarter and Full Year 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 Maeve Connaughton, Investor Relations at Argo Partners 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 quarter 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. Please note that certain statements made during this call regarding matters that are not Oracle 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 today's call are Ann Wojcicki, our Chief Executive Officer and Co Founder and Jozelle Zavich, by our Interim Chief Financial and Accounting Officer. Kenneth Hillen, our Chief Therapeutics Officer will join us for Q and A. I'd now like to turn the call over to Anne.

Speaker 2

Thank you, Meeve. 23. Me had a productive year with numerous accomplishments for both our consumer and therapeutics businesses. Since starting the company, 23. Me has been focused on helping our customers access, understand and benefit from the human genome.

Speaker 2

Today, I'm excited to review the progress we made in those areas this past quarter fiscal year 2023. This year, we grew our overall customer base to over 14,000,000 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 crowdsource platform of genetic information paired with billions of phenotypic data points contributed by engaged customers. Our unique platform helps us Discover new genetic insights, develop impactful risk prediction reports for common health conditions and accelerates 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, over the past year, we've seen a significant increase in revenue for our 23andmeplus subscription membership.

Speaker 2

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 increased subscription prices. We also continue to increase the percentage of customers who opt in to become 23meplus 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 23andme plus subscription model. This past quarter, we've added 3 new health reports for to 23 andMe 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 2

With our focus on enhancing the benefits of our subscription service, all 11 new health reports we launched over the past fiscal year We're exclusive to 23andme 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. Looking ahead, we continue to focus on delivering premium insights and features that give members even more actionable information to live healthier lives. 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. The mix of kit sales continues to trend higher for our health and answers your service as opposed to our answers your only service.

Speaker 2

We've been continuing to refine and improve how customers find, and is now covering the incredible value 23andme 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 need. 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.

Speaker 2

Under the leadership of our dedicated consumer team, including Daniel Chiu, our Chief Products Officer David Baker, our Vice President of Engineering and Chief Security Officer John Ward, our Chief Marketing Officer and Nora Abouil Hassan, 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 therapeutics business. We were excited to present at the American Association For Cancer Research for AACR Annual Meeting in April, where we reported our first set of clinical data from the 1st in human Phase 12a study of 23andme 610, our wholly owned antibody targeting in CD200R1. The Phase 1 data demonstrated 23 andMe-six ten Had an acceptable safety and tolerability profile with favorable pharmacokinetics and peripheral CD200 R1 saturation in patients with advanced solid malignancies.

Speaker 2

Based on the Phase 1 data, a dose of 23 andMe-six ten Given at 1400 milligrams intravenously every 3 weeks, we've selected for evaluation of antitumor activity in the ongoing Phase IIa portion of the Phase I2a23andme610 study. The Phase 2a portion is designed to evaluate the antitumor activity of the 23andme-six ten monotherapy in a number of expansion cohorts and further characterize the safety, tolerability, PK and PD profile of 23 andMe-six ten. The expansion cohorts include clear cell renal cell carcinoma, Epithelial ovarian, fallopian tube or primary peritoneal carcinoma, 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. Having access to both genetic and phenotypic data through our recontactable large scale research and are more than twice as likely to succeed.

Speaker 2

In addition to 23andme 610, we have a promising portfolio of 23andme owned and collaborative programs with GSK, and we'll decide which of these programs to continue investing in or to partner. These programs span a range of therapeutic areas, including immuno oncology, for Cardiovascular and Urology. We are excited to report future updates as we progress the therapeutic side of the business. In addition to our current programs, 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 and D productivity through genetically driven target identification and portfolio prioritization.

Speaker 2

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 2023 to help raise awareness for lipoprotein a little known genetic risk factor for cardiovascular disease. 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 GSK collaboration. 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.

Speaker 2

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 signed. And with that, let me turn the call over to Joe, who will review our financial results for the quarter.

Speaker 3

Thanks, Anne. Our 2023 fiscal year was marked by a 10% year over year revenue growth in in line with our guidance. We have also made headway on improving our adjusted EBITDA 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 12 months ended March 31, 2023 was $92,000,000 $299,000,000 respectively, representing a decrease of 8% and an increase of 10%, respectively, over the same period in the prior year. The 3 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 Q4 of fiscal year 2022 based on the change in estimate of the contract's completion to date and a decrease in PGF kit as we reduced our promotional activities in the period to drive higher average selling prices, resulting in lower overall sales and improved margins.

Speaker 3

These decreases were partially offset by continued growth in our subscription services and GSK's election to extend its exclusive discovery term for 5th year, which provides greater revenue than prior years. 12 month revenue growth was primarily due to the full year inclusion of telehealth services revenue compared to only 5 months in the prior year. The 12 month period also benefited from higher average selling prices on PGS kits, Looking at the composition of our revenue, consumer services revenue represented approximately 88% and 83% of total revenue for the 3 12 months ended March 31, 2023, respectively, And research service revenue, which was primarily derived from the GSK collaboration, accounted for approximately 12% and 17% of total revenue respectively for those same periods. Our gross profit for the 3 12 month period ended March 31, 2023 was $40,000,000 $135,000,000 respectively, representing a 15% decrease and a 1% increase, respectively, over the same periods in the prior year. The decrease in 4th quarter gross profit was driven primarily by the lower revenues mentioned previously.

Speaker 3

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, which more than offset higher supply chain costs in the PGS business. Operating expenses for the 3 12 month periods ended March 31, 2023 were $109,000,000 $459,000,000 respectively, compared to $117,000,000 and $387,000,000 for the same period in the prior year. The decrease in the 4th 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 business. Looking at the bottom line, net loss for the 3 12 months ended March 31, 2023, was $64,000,000 $312,000,000 respectively, compared to the net losses for the same period in the prior year of $70,000,000 217,000 The improvement in 4th 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 3

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 $33,000,000 in fiscal year 2022. Next, our adjusted EBITDA. For details on how we define adjusted EBITDA, as well as the corresponding reconciliations to GAAP, Please see our earnings press release. Total adjusted EBITDA deficit for the 3 months ended March 31, 2023 was $39,000,000 compared to a deficit for the same period in the prior year of $30,000,000 Total adjusted EBITDA deficit for the 12 month period was $161,000,000 compared to a deficit for the same period in the prior year of $151,000,000 We ended the quarter with $387,000,000 in cash and cash equivalents compared to $553,000,000 as of March 31, 2022. As always, we are actively evaluating the use of our capital for both our consumer and therapeutics businesses, including responsibly opting in and out of therapeutic programs based on opportunity potential and timing of returns as appropriate given market conditions.

Speaker 3

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. Within the existing Consumer businesses of PGS and Telehealth, the company is prioritizing the minimization of cash burn and margin expansion over initiatives intended to create incremental top line growth. For those areas of the business expected to drive future growth, which includes 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 is best appropriately.

Speaker 3

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 GSK collaboration. The company does not foresee meaningful revenue contribution from these areas of consumer in fiscal 2024. Revenue guidance for fiscal year 2024, which will end on March 31, 2024, It's projected to be in the range of $255,000,000 to $280,000,000 with a net loss in the range of $340,000,000 to $365,000,000 Full year adjusted EBITDA deficit is projected to be in the range of $170,000,000 deficit to $295,000,000 deficit for fiscal year 2024. The adjusted EBITDA guidance assumes the following. We will continue to advance our therapeutics assets.

Speaker 3

2nd, no additional revenue from strategic partnerships. And 3rd, 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. Adjusted EBITDA is our best proxy for cash burn, and we do not assume any use of our ATM program. And now, I'll turn the call back over to Ann.

Speaker 2

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 we conducted with Medscape found that over 90% of doctors say genetics are an important part of a patient's complete in the health picture. I believe 23.

Speaker 2

Me has an incredible opportunity to leverage genetics to transform how we predict, prevent and treat in many diseases. 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, Thank you. And now let's open up the call for questions.

Operator

And our first question will come from the line of Daniel Grossleit from Citi. Your line is open.

Speaker 4

Hi, 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, and that would be upside to your guidance or should we just assume that there's going to be de minimis research revenue after your 1st fiscal quarter?

Speaker 5

Thanks, Daniel. It's Kenneth. I can take that and then maybe I'll hand over to Joe for the second What I can say, you're right, 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 New partnerships are a top priority for us to make sure that we keep advancing those opportunities and we Intent to provide you with more information on those as we move forward. We've certainly been pleased with the amount of interest that we have from potential collaborate Anders, as Anne announced, we're very excited about Reza Kamy joining us as our Chief Corporate Development Officer.

Speaker 5

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 Jim maybe I can pass on to you about that revenue question.

Speaker 3

Thank you, Kenneth. Daniel, on revenue, on our adjusted EBITDA guidance, we included the Final quarter or final revenue between April 1 and the end of the GSK collaboration in July. As Kenneth mentioned, we're continuing to engage in basically pursuing additional partnerships and collaborations. And once we actually sign a deal, we will then announce what and adjust our revenue guidance based on that.

Speaker 4

Yes, that makes sense. And maybe if we can stick with the 2024 guide, but really looking at EBITDA and the segmentation there, Is $23,000,000 about the right burn rate for the therapeutic spend on a quarterly basis? And then on the consumer side, when do 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 $150,000,000 in stock based comp for Fiscal 'twenty four, that's a step up from 'twenty three.

Speaker 4

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 as a potential dilution there?

Speaker 3

Okay. So on therapeutics adjusted EBITDA, we noted in our K that basically Essentially, that is approximately the adjusted EBITDA deficit per quarter, right? And As we continue to invest in therapeutic assets, that potentially could increase, as you know, as we do drug development. From a stock based compensation perspective, there was a couple of 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 and stock based comp.

Speaker 3

And second, we instituted a bonus program, which also is being paid out in RSUs as we want to make sure that employees are vested in the company and so that also increased our stock based comp.

Speaker 4

Okay. And then on the consumer side, when do you expect to be EBITDA positive on an LTM basis there?

Speaker 3

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. And you can see in our 10 ks that we made meaningful progress on that in fiscal year 2023 and we'll be continuing towards that goal in fiscal year 2024.

Speaker 4

Got it. Thanks for the color.

Operator

One moment for our next question. And our next question will come from the line of Stephen Ma from Cowen. Your line is open.

Speaker 6

Great. Thanks for taking the questions. Question on the Novartis collaboration on lipoprotein Appreciate that it's a blood analyte test, not a genomic test. Is that going to be something you guys run-in your CLIA lab or are you going to and outsourced to a 3rd party. And then if you can give a bit more color on how exactly you and Novartis are going to be monetizing this offer?

Speaker 2

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 It's not part of genetics. So we are actively looking for 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 is feasible as part of this.

Speaker 2

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. We have 13,000,000 plus customers. 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 indications and lipoprotein is It's a good example of where I think we can really educate, bring people in and drive awareness around the testing.

Speaker 2

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 and I think there's a lot There's a real role for 23andme to drive a lot of that awareness.

Speaker 5

And maybe Anne, maybe I can just add if that's okay. Just I think one of the really interesting things about Live for protein literally, it's not just an important risk factor, but it's also. So actually with more than 14,000,000 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, we then through our Limonid Health, Kelly Health platform would have the potential to then go on to get blood levels of lipoprotein Middle East. So I think it's really putting the genetics and the telemedicine platform together that really adds a lot of power there.

Speaker 3

Okay. Yes, that makes a

Speaker 6

lot of sense. Do you envision like this being a model for the integrated genetic services And the lemonade PCP offering and along the same lines, have you guys finalized the rollout strategy for the genomic health services business.

Speaker 2

We definitely see this this is a good example of where I think we can leverage 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 genotype or 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, people being able to order tests, Add additional kind of follow-up, different kinds 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 6

On the Genomic Health Services, the formal strategy, Just wondering when we should expect to get some details?

Speaker 2

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, 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. We have clinicians who are well trained and we also have a pharmacy.

Speaker 2

So we can make sure you get the right Medication based on your genomics. So that is a high priority area for us to be focusing on, and you'll see more rollouts towards the second half of the year.

Speaker 6

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

Speaker 2

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

Speaker 3

And essentially, I think the other thing to add, as Anne said, we are looking at being efficient in our marketing spend, Growing margins and for us, we'll continue to invest in new sales and marketing if we can drive additional margin.

Speaker 2

Yes. And just to emphasize there, I see a huge opportunity with the combination of genomics And Lemonade, the telemedicine, the pharmacy, and I think there's 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 14,000,000 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.

Speaker 3

Okay. Thank you.

Operator

Thank you. Now I'll turn it over to Mae for any further questions.

Speaker 1

Thank you. We have a few questions from investors that came in through our Q and A platform that we use through SAID Technologies. 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 GSK exclusivity? Can you provide any details or at least the date on which something will be announced?

Speaker 5

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 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 Kamie joining us at 23andme is our Chief Corporate Development Officer. He is now leading those efforts in securing The most productive collaborations possible and we look forward to updating you when there are material partnership deals signed.

Speaker 1

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?

Speaker 2

And I can take that one. Yes. Do you want I'll take that one, Joe, and

Speaker 3

then I'll hand

Speaker 2

it to you. Yes, there's definitely a plan to start integrating the Lemonade services into the 23. Me app And 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 23. Me is really being able to engage people holistically in a very proactive preventative care.

Speaker 2

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 market approach for the treatment of the South accounts and we really touch Joe, do you want to jump in?

Speaker 3

Sure. And as Ann said, we are going to continue building out these features and it's getting Lemonade. And No. Based on with our leadership of our dedicated product team, we tend to focus on the evolution of our business and improve, 1, our products, we're 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 Services and resources along with 23 andMe to areas of unmet need such as mental health.

Speaker 3

And one reason we're really excited too is with our new product growth is basically just focused on subscriptions and really trying to look at long term consumer engagement and really providing basically services that will Add value to customers and add value for us as well.

Speaker 1

Okay. Next question is what is the long run business outlook for 23andme and what are your plans to become profitable?

Speaker 3

We continue to make strides to realizing a future where genetic information becomes a foundation of personalized health. 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 2023 and moving the Consumer and Research segment to be and on to a improvement and getting towards cash flow positive and is our intent to make additional progress in fiscal year 2024. In therapeutics, basically, therapeutics will require investment as we continue to progress our assets, the development drug cycle. And 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 is appropriate, to make sure we're allocating capital to the best ROI for shareholders.

Speaker 1

Next question. With AI advancing so much, how is 23andme currently or planning to implement AI into its practices?

Speaker 5

Yes. It's Kenneth. I'm happy to take that. As you can imagine with the enormous database and data set that we have 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. 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're just talking about the integration of medicine, primary care, genetics, And then working with customers and patients that can really potentially transform that space and we believe that 23.

Speaker 5

Me is really I'm uniquely pleased 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 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 placed to take advantage of this in a competitive way at the company. Very exciting.

Speaker 1

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

Speaker 3

23 andMe has a strong current cash position with at $387,000,000 in cash and cash equivalents as of March 31, 2023. Our full year adjusted EBITDA deficit is projected to be in the range of $170,000,000 to $195,000,000 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 and nor does it include any savings from any potential reduction initiatives that I had mentioned earlier. Our adjusted EBITDA is our best proxy for cash burn. And so that just gives you a sense of what our cash position and runway looks like.

Speaker 3

And so 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. With that said, we will be opportunistic and evaluate our as it relates to fundraising going forward.

Speaker 1

All right. Thank you everyone for joining us. We look forward to updating you on 23andme's progress on both the consumer business and therapeutics efforts.

Operator

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

Speaker 2

Goodbye.

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