Stay updated with the latest news in the Pharmaceuticals sector by signing up for our free updates. You’ll receive a daily email from our myFT Daily Digest, delivering a roundup of the most recent developments in the industry.
Genetic testing company 23andMe has ambitious plans for personalized healthcare. By utilizing data from their at-home testing kits, this San Francisco-based company has built a genetic database with over 13 million individuals. They leverage this database to determine predispositions for certain health conditions, while also contributing to their drug development research program. However, despite the vastness of this database, it has yet to produce significant value.
Founded in 2006 by Anne Wojcicki, the former spouse of Google co-founder Sergey Brin, 23andMe initially focused on providing high-minded genetic testing, but it soon became overshadowed by user interest in ancestral tracing. For a fee of £99, users can simply collect a saliva sample and send it for analysis, receiving a report on their DNA composition by region. Competitors in this space include Ancestry and CRI Genetics.
While these services may be enjoyable, they are also easy to give up. In recent years, privacy-conscious consumers have become more cautious about sharing personal information with technology companies. Prior to going public through a merger with one of Richard Branson’s special purpose acquisition companies during the 2021 SPAC boom, 23andMe was already experiencing declining sales.
SPACs typically have a share price of $10, but 23andMe’s share price has plummeted to $1.14. Consumer services, including their home kits and telehealth platform, generate nearly 80% of the company’s total revenue. Unfortunately, this core business is not seeing growth, and cost-cutting measures such as reducing marketing efforts have resulted in a 6% decrease in revenue in the last quarter. Cash flow could soon become a concern, as the company anticipates a net loss of up to $345 million in the current fiscal year, surpassing their available cash of $314 million.
A potential lifeline for 23andMe lies in their drug development endeavors. Five years ago, the company formed a partnership with GSK and now has approximately 50 programs in progress. The success of just one of these programs could completely transform their business. However, to make this a reality, they will need additional funding for the necessary research and development.
Lex recommends the FT’s Due Diligence newsletter, a curated briefing on the world of mergers and acquisitions. Click here to sign up.
Denial of responsibility! VigourTimes is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
