The long jump to Who Knows %&()#$!@ Where continues. 23andMe’s Incredible Shrinking Act continues with reports that their Lemonaid telehealth/teleprescribing unit is reportedly being shopped. The reports originated with sources talking to Business Insider with pickup in other industry publications like PYMNTS. How far the fishing line has been thrown is unclear. 23andMe has not returned calls from either BI or PYMNTS.
23andMe hasn’t much else to throw out the hatch. In lightening their expense load after their disastrous, poorly handled 2023 consumer data breach and subsequent class action lawsuits, the company last year shuttered its therapeutics discovery unit [TTA 14 August 2024]. By the fall, it scrubbed out 200+ employees or 40% of its remaining workforce, and fully closed its therapeutics development unit though it was still running two clinical trials that would have to be wound down. It was touted as saving $35 million annually but when executed cost $12 million in one-time severance and termination-related costs [TTA 14 Nov 2024]. Somehow it survived a mass resignation of the board [TTA 17 Sept]. 23andMe still merchandises its ancestry, health analysis, and the Total Health annual package on a scale from $99 to $999 annually.
Lemonaid entered the hot GLP-1 prescribing and support business in 2024, adding to its quick-diagnosis/quick-prescribing suite of psychiatric, birth control, erectile dysfunction, diabetes, and cholesterol meds. 23andMe bought it during their 2021 steak-and-trimmings days for $400 million in cash and stock, when 23andMe rolled in cash after their IPO at $300/share and was worth $3.5 billion. At the time, CEO Anne Wojcicki touted the integration of Lemonaid with their genetics as “healthcare that is based on the combination of your genes, your environment, and your lifestyle”. Lemonaid lifted them to a $4.8 billion valuation. Today, 23andMe’s stock, after a reverse stock split, closed today at $3.58 for a market cap of $86 million. Ancestry and health genomics proved to be a ‘one and done’ unsustainable consumer business, with the capture of consumer genetic information proving to be controversial. While featuring its 23andMe ownership, Lemonaid continues in its established business model without a breath of genetics.
The value of Lemonaid as a standalone is unknown. But given the competitive teleprescribing sector it’s in with GLP-1 weight loss drugs peaking, it’s likely at or near maximum value to be cashed in.
Anne Wojcicki for the past year has made no secret of her desire to personally buy the company and take it private. From her recent statements about “transforming healthcare” in five years [TTA 4 Dec 2024] and the company’s latest moves, Lemonaid may be, in her eyes, an off-strategy ‘lemon’. Their 8 January announcement of Discover23 was strictly about merchandising their research database cohort and genomic studies for biomedical research and governments (!) through a Trusted Research Environment (TRE) developed by Lifebit, an outside technology company based in London.
The picture to this Editor is of a company deliberately shrinking, moving away from the consumer market as much as possible, and selling its apparently huge genomic database for research purposes as its real and main business. A clever and timely cashout of Lemonaid will satisfy shareholders–and make the company, now worth less, easier for Wojcicki, who holds the controlling shares, to buy. And from there, who knows?
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