23andMe Holding Co. (NASDAQ:ME) Q4 2023 Earnings Call Transcript May 25, 2023

23andMe Holding Co. beats earnings expectations. Reported EPS is $-0.14, expectations were $-0.16.

Operator: 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 a listen-only mode. After the prepared remarks, there will a question-and-answer session. I would now like to turn the call over to Maeve Conneighton, Investor Relations at Argo Partners to lead off the call. Thank you. Please go ahead.

Maeve Conneighton: Thank you. Before we begin, I encourage everyone to go to investors.23andme.com to find the press release we issued earlier today reporting our financial results for the quarter and 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 historical facts including, but not limited to, management’s outlook or predictions for future periods are forward-looking statements. These statements are based solely on information that is now available to us. We encourage you to review the section entitled Forward-Looking Statements in our press release, which applies to this call.

Also, please refer to 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 reconciliations to U.S. GAAP may be found in our earnings release. Joining us on today’s call are Anne Wojcicki, our Chief Executive Officer and Co-Founder; and Joe Selsavage, our Interim Chief Financial and Accounting Officer; Kenneth Hillan, our Chief Therapeutics Officer, will join us for Q&A. I’d now like to turn the call over to Anne.

Anne Wojcicki: Thank you, Maeve. 23andMe had a productive year with numerous accomplishments for both our consumer and therapeutics businesses. Since starting the Company, 23andMe 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 2023. 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. 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 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 23andMe+ 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 increased subscription prices. We also continue to increase the percentage of customers who opt in to become 23andMe+ 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+ subscription model. This past quarter, we’ve added three new health reports for 23andMe+ 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.

With our focus on enhancing the benefits of our subscription service, all 11 new health works we launched over the past fiscal year were exclusive to 23andMe+ 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 1/3 of the health risks come from their genetics. The mix of kit sales continued to trend higher for our health and ancestry service as opposed to our ancestry-only service.

We’ve been continuing to refine and improve how customers find, prioritize and understand their results from the 150-plus report we offer, leading to more consumers discovering the incredible value 23andMe provides. We remain focused on the continued integration of Lemonaid 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 health care 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.

Under the leadership of our dedicated consumer team, including Daniel Chu, our Chief Product Officer; David Baker, our Vice President of Engineering and Chief Security Officer; John Ward, our Chief Marketing Officer; and Noura Abul-Husn, 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, or AACR, Annual Meeting in April, where we reported our first set of clinical data from the first-in-human Phase 1/2a study of 23ME-00610, our wholly owned antibody, targeting CD200R1.

The Phase 1 data demonstrated 23ME-00610 had an acceptable safety and tolerability profile with favorable pharmacokinetics and peripheral CD200R1 saturation in patients with advanced solid malignancies. Based on the Phase 1 data, a dose of 23ME-00610 given at 1,400 grams intravenously every three weeks was selected for evaluation of antitumor activity in the ongoing Phase 1a portion of the Phase 1/2a 23ME-00610 study. The Phase 2a portion is designed to evaluate the antitumor activity of the 23ME-00610 monotherapy in a number of expansion cohorts and further characterize the safety tolerability, PK and PD profile of 23ME-00610. 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 and resectable or metastatic solid malignancies will also be enrolled. Having access to both genetic and phenotypic data through our recontactable 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-00610, 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, 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, 23andMe is actively seeking to advance our pipeline of genetically validated discovery and clinical programs through new collaborations. We are also uniquely positioned to partner with industry collaborators to improve R&D productivity through genetically driven target identification and portfolio prioritization. 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), a little known genetic risk factor for cardiovascular disease. Our new Chief Corporate Development Officer, Reza Afkhami, will be leading our efforts in securing new partnerships with potential collaborators, following the expiration in the 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. 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.

Joe Selsavage: Thanks, Anne. 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 & 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 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. 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 fourth quarter of fiscal year 2022 based on the change in estimate of the contract completion to date and a decrease in PGS kits as we reduced our promotional activities in the period to drive higher average selling prices, building in lower overall sales but improved margins.

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. 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, 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 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- 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 was driven primarily by the lower revenues mentioned previously. 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- and 12-month periods 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.

The decrease in the fourth quarter operating expenses was primarily driven by a onetime 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 noncash impairment charge for an intangible asset related to the previously acquired telehealth business. Looking at the bottom line, net loss for the 3 and 12 months ended March 31, 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. 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. 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 three months ended March 31, 2023, was $39 million compared to a deficit for the same period in the prior year of $30 million. Total adjusted EBITDA deficit for the 12-month period was $161 million compared to a deficit for the same period in the prior year of $151 million.

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, 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. 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 both 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 invest appropriately. 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, 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. Full year adjusted EBITDA deficit is projected to be in the range of $170 million deficit to $195 million deficit for fiscal year 2024.

The adjusted EBIT guidance assumes the following. We will continue to advance our therapeutic assets; 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. 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 Anne.

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 we conducted with Medscape found that over 90% of doctors say genetics are an important part of a patient’s complete health picture. I believe 23andMe has an incredible opportunity to leverage genetics to transform how we predict, prevent and treat 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 need is the ultimate fulfillment of the Company’s mission to help you 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 let’s open up the call for questions.

Q&A Session

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

Daniel Grosslight: A 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 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 guidance? Or should we just assume that there’s going to be de minimis research revenue after your first fiscal quarter?

Kenneth Hillan: Thanks, Daniel. It’s Kenneth. I can take that, and then maybe I’ll hand over to Joe for the second part of you. What I can tell you, 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, the 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. We’ve certainly been pleased with the amount of interest that we have from potential collaboration. As Anne announced, we’re very excited about Reza Afkhami joining us as our Chief Corporate Development Officer.

I think it’s really good timing for him to now 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 Joe, maybe I can ask on to you about that revenue question.

Joe Selsavage: 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.

Daniel Grosslight: Yes, that makes sense. And maybe if 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 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 has 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 and the potential dilution there?

Joe Selsavage: Okay. So on therapeutics adjusted EBITDA, we noted in our K that basically — essentially, that is approximately the — its 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 brands and new hires grants and stock-based comp. And second, we instituted a bonus program which also is being paid out in RSUs as we want to make sure that employees are tested in the Company. And so that also increased our stock-based comp.

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

Joe Selsavage: We don’t have a specific date on when we will be cash flow positive. As we’ve mentioned and basically, in our comments, we are actually driving towards that goal and you can see in our 10-K that we’ve made meaningful progress on that in fiscal year 2023, and we’ll be continuing towards that goal in fiscal year 2024.

Operator: And our next question will come from the line of Steven Mah from Cowen. Your line is open.

Steven Mah: Great. Thanks for taking the question. Question on the Novartis collaboration on Lipoprotein(a). I 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 outsource to a third party? And then if you can give a bit more color on how exactly you and Novartis are going to be monetizing this offering?

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 — 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 Lemonaid acquisition and something that we are definitely going to make sure as 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 aging customers. We have 13 million 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(a) is a good example of where I think we can really educate bring people in and drive awareness around the testing. So, 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(a), and I think there’s a lot — there’s a real role for 23andMe to drive a lot of that awareness.

Kenneth Hillan: And maybe, Anne, maybe I can just add, if that’s okay. Just — I think one of the really interesting things about Lipoprotein(a) is it’s not just an important risk factor . So actually, 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 as Anne said, we then through our Lemonaid Health telehealth platform would have the potential to then go on to get blood levels of Lipoprotein(a). So, I think it’s really putting the genetics and the telemedicine platform together that really adds a lot of power there.

Steven Mah: Okay. Yes. Yes, that makes a lot of sense. Do you envision like this being a model for the integrated genetic services and the Lemonaid PCP offering? And along the same lines, have you guys finalized the rollout strategy for the genomic health services business?

Anne Wojcicki: We definitely see this — this is a good example of where I think we can leverage all the assets of 23andMe and Lemonaid 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 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 Lemonaid 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?

Steven Mah: On the Genomic Health Services, the form strategy. Just wondering what we expect to get some details?

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. 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 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.

Steven Mah: 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 the 23andMe offerings. Given that, do you expect that you can continue to reduce sales and marketing expenses?

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

Joe Selsavage: And essentially, I think the other thing to add that 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.

Anne Wojcicki: Yes. And just to emphasize there, I see a huge opportunity with the combination of genomics and Lemonaid, the telemedicine, the pharmacy. And I think there’s opportunities for us to recruit new individual, 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, on both those segments, internal and external. And obviously, there’s different acquisition costs between those different groups.

Operator: Thank you. Now I’ll turn it over to Maeve for any further questions.

Maeve Conneighton: Thank you. We have a few questions from investors that came in through our Q&A platform that we use through say, 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 excitements news pertaining to post GSK exclusivity? Can you provide any details or at least the date on which something will be announced?

Kenneth Hillan: Yes. It’s 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 Afkhami joining us at 23andMe as our Chief Corporate Development Officer. He is now leading those efforts and securing the most productive collaboration as possible, and we look forward to updating you when there are material partnership deals signed.

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

Anne Wojcicki: And I can take that one.

Joe Selsavage: Yes. Go ahead.

Anne Wojcicki: Joe, I’ll take that one, Joe, and then I’ll hand it to you. Yes, there’s definitely a plan to start integrating the Lemonaid services into the 23andMe app and having a holistic experience for 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 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 Joe, do you want to jump in?

Joe Selsavage: Sure. And as Anne said, we are going to consider bailing out these features and interesting Lemonaid. And based on — with our leadership of our dedicated product team, we intend to focus on the evolution of our business and to improve on 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 Lemonaid services and resources along with 23andMe areas of unmet needs 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 basically services that will add value to customers and add value for us as well.

Maeve Conneighton: Okay. Next question is what is the long-run business outlook for 23andMe? And what are your plans to become profitable?

Joe Selsavage: 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 health care 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 & Research segment to be to improvement and getting towards cash flow positive and as our intent to make additional progress in fiscal year 2024. In therapeutics, basically therapeutics will require investment as we continue to progress our assets to the development drug cycle.

But 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.

Maeve Conneighton: Next question with AI advancing so much, how is 23andMe currently, we’re planning to implement AI into its practices?

Kenneth Hillan: Yes. It’s Kenneth. I’m happy to take that. As you can imagine, with the enormous database and data set 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. I think the recent progress has 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 that can really potentially transform that space. And we believe that 23andMe 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 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.

Maeve Conneighton: Okay. And final question. Considering the financial position, do you believe you will require a dilutive capital raise any time in the future?

Joe Selsavage: 23andMe has a strong current cash position with $387 million 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 million 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. And nor does it include any savings from any potential cost reduction in 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 run rate 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 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.

Maeve Conneighton: All right. Thank you, everyone, for joining us. We look forward to updating you on 23andMe progress on both the consumer business and therapeutic efforts.

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

Maeve Conneighton: Goodbye.