Why 23andMe CEO Anne Wojcicki Is Raising Prices

23andMe CEO. It's good to catch up. Great to catch up. Prime Day. Amazon Prime Day. It was interesting because there was a lot of press coverage, but 23andMe came up a lot as a product that people searched for and that was discounted in deals. How was that for the company? Prime Day is always a big event for us. I think that, you know, it first started because we realized that people didn't know exactly why they wanted their genetic information. Right. And so having a sale was a good opportunity. It was an awareness thing. It was an awareness. It was an awareness and it was a reason to buy it now. The first year we did it, frankly, we were just shocked. It was always been us and the Instapot. We've been neck to neck about who can be the number one product on Prime Day. But it's always been a great event. Amazon's been a great partner on it. And it's a fun opportunity for us to really promote the product, like talk about the opportunities in health, the opportunities that, you know, what people see with ancestry, how ancestry and health are connected with each other. And it drives a huge number of people to buy the product who were on the fence. It's interesting because there is an element of discounting in deals, but broadly the story with 23andMe is raising prices. Yeah, you know, it's interesting. We've actually always, we've always been in a situation like we started at $1,000 and then we always dropped the price. And this is actually the first time we've recently announced that we are going to be raising prices. And why? And part of that actually comes from the fact that we've realized with our customers that they want more. And I see, it's 17 years into this job and I've realized like our customers come back quite regularly, you know, over 40% of our customers are coming back on a quarterly basis. So people want more. And in order for us to deliver more, like I have a team of product scientists, I have a team that's innovating, that's like understanding polygenic risk scores, like risk of common disease, being able to better and better serve an ancestry product that's accurate about you, better and better, you know, actually help you get the genetic information about your health integrated with your medical records. So all of that costs more. So we realize we have this opportunity now to keep innovating and deliver a better and better product for our customers. When you're on the side of a mountain and the sun is out, it's always a great time to talk about M&A at this time of year. But with 23andMe, I think about Lemonade 2021, but how has that integration gone? In other words, are you kind of test kit customers moving on to use it? Lemonade service. So the reason why we bought Lemonade, and it's interesting, it hasn't been clear to everyone, like what's the synergy? And overwhelmingly, like I look at the history of the human genome, you know, it was sequenced 20 years ago. So we've all been talking about, you know, from the Clinton days till now, like the potential of the genome, like it's going to change healthcare, it's going to change prevention. But most people in this country still have never had a genetic test. Yes. And the question is why? And that largely comes from reimbursement issues. It comes because physicians are not trained on it. We don't necessarily understand the protocols, like how to integrate it. And frankly, like my biggest beef is like prevention in this country just doesn't. It's not something people prioritize. It's not something that makes money. So if I tell you you're higher risk for heart disease, your doctor's going to likely say like, well, you know, we can do X, Y, and Z, but come back when you have heart disease. So how does Lemonade solve that problem? Well, now what I do is I have 14 million people who have 23andMe. Yes. And if they have questions and they want better information about how to integrate this into their actual healthcare and stay healthy, we have access now to physicians who are specifically trained on genomic medicine and specifically preventative genomic medicine about how to take that result. And you're higher risk for chronic kidney disease. You have a genetic variant about a medication and you're suffering from depression. What's the right medication for you? All of that. And I now have a clinical team who knows how to do that. And the brilliance of Lemonade is it has a pharmacy. So specifically on areas like mental health where people really are struggling and finding the right kind of medication to manage it, I have a clinical team now that understands genomics, they understand pharmacogenomics, the right, you know, your genetic variant and the medication that might be best for you to start on. As a piece of business at a basic level, is it making money for 23andMe? Yeah, Lemonade, Lemonade when we bought it is largely focused on more of the, you know, consumer areas like hair loss, erectile dysfunction. So that's a core business. And that is an exciting business. And it's something that we see it tapped into the fact like very, you know, very similar with 23andMe is that there's a consumer component of healthcare. You know, you see this right now with all the GLP ones and weight loss, people want to be more and more in control of their health. So whether it's about something like erectile dysfunction and weight loss or hair loss, or it's about, you know, how do you actually stay healthier longer? There's a great synergy between those two. So that business continues to do well and continue to thrive. And now we're going to be adding on really, you know, 14 million customers from 23andMe. How do they get access to the Lemonade services as well as Lemonade clinicians and services? How are they better integrated in genomics? And is there anything that you think you could go out and buy or acquire that will further sort of increase the value proposition or just give 23andMe customers access to more ways to use the tests that they took? Well, the exciting aspect for me is post pandemic. Like so many things have come out of that, but people are used to telemedicine and they frankly are more and more used to like you're on your own on health. Like it's really, people struggle at understanding payment. They struggle at finding doctor's appointments. So more and more people are on their own. So there's this huge opportunity for 23andMe to more and more offer a, you know, a vertically integrated system of like, how do I actually really help you? I have the pharmacy. I have a phenomenal team that can ship right away products that you actually want. So how is it that we can really be that leader in keeping you healthy as long as possible and like fully integrating, you know, the prevention? That's what all those spit tests were for. Well, if you think about the origins of 23andMe, you've moved on to something much bigger. And I want to go to something you said a moment ago, preventative. And when will we see, you know, doctors, physicians, call it what you will, sort of say at the beginning of the year or in an annual health check, have you ever taken a 23andMe? Yeah. The opportunity honestly is now. And we've done these Medscape surveys. Medscape is, you know, a service that is like largely targeting clinicians. And the first years that 23andMe was around, we would go to meetings and I would bring a thousand kits to give away. And I'd probably give away five. I'd come home with the other 995. They just weren't interested. There was like no interest. Like, what is this? What am I going to do with this information? Like, why would I want to know? And it's radically changed. And now you have, I forgot the exact numbers, but it's over 80% of clinicians are saying they see that opportunity to integrate genetic information into their clinic. And they acknowledge that it is going to lead to better outcomes. Like the reality is genetics is never going to be the complete solution, but it is an incredibly important clue in the diagnosis and helping you live the optimal life. So 23andMe recently hired Nora Abdul-Hassan. She was the director of genomic medicine at Mount Sinai in New York. She's a phenomenal clinician and a scientist and is leading up now our genomic health initiatives about how are we going to deliver genomic health to 14 million people to essentially almost look at us as like the largest health system that is out there, as well as then partner with all the clinicians that are out there, all the medical centers that are out there that have questions. And physicians want to do a physician-to-physician consult. So how is it that we can actually create that content for the clinical world and then also communicate effectively with them? The question is always the same, though. Who pays for it? I believe, again, and you see this in some ways now with the GLP-1s and all of the weight loss drugs, if you can show consumers the reason why they should self-pay, I believe that they're going to self-pay. And I think it's really important for people to remember, if you self-pay, the objectives are really clear. If your insurance company is paying or your hospital system is paying or even if your employer is paying, there's a different set of incentives. I'm a big believer if you want the best for you, being directly in charge and directly connected, you can also cut out all the middlemen. And that's why people always ask the question, why is 23andMe so much cheaper than all the other genetic tests out there? It's because we have no middlemen. It's just between us and you. So I'm a big believer if you want to take ownership of your own health and you want to be in charge and you want to actually focus on prevention, it has to be more and more in the self-pay world. And 23andMe is really owning and creating this self-pay ecosystem that is about putting people in charge of their own health. Finally, in April, we had some early test results from your in-house developed drug. I'm going to read it because it's named 23andMe-00610 and it is a monoclonal antibody. Correct. What is that? Well, people don't realize. One of the things that is amazing, 23andMe's mission is really about helping you access, understand, and then benefit from the human genome. And one of the amazing aspects that you can get from huge amounts of genomic information is insights into biology, and we're then translating those insights into therapeutics. So we have a whole therapeutics team. We've partnered with GSK, and we're all about how do we find truly novel therapies to treat unmet diseases. So this is our first one. It was in Phase 1. We just announced the results on Phase 1. It's an immuno-oncology program. It is in cancer. We're looking at it in ovarian, renal cell, small cell, lung cancer, and a number of other cancers. The Phase 1 results looked promising. It was safe. You saw some side effects about autoimmune conditions, which is what you expect to see in an immuno-oncology program. Our poster talked about neuroendocrine and one stable disease. So we've expanded. We're in Phase 2A now. It's super exciting. And I love, like, one of the things that, again, I love is, like, health care is something that we all relate to. We're all going to die. We're all going to be sick at some point. So if we can all come together and crowdsource, we can actually collectively solve a lot of our problems in health care. And what you have is going to be different than what I have. So it means I can be a control for you, and you can be a control for me. And together, if we all bond together, we can actually make a real difference. So 23andMe really has led in crowdsourced research. We have over 250 publications that have come out in this whole pipeline of therapeutics. And the goal is, like, I want to serve my customers. I want to be able to develop innovative, novel drugs that are going to then benefit my customers and really change those lives.