23andMe Moves into Telehealth via $400 Million Lemonaid Acquisition

It’s been a busy year for 23andMe. Consumer DNA testing giant 23andMe. Less than five months after going public, the consumer genetic testing giant has made a major move to establish its position as a leader in DTC primary care by acquiring telehealth drug-delivery provider Lemonaid Health Inc. for $400 million. Here’s a look at the deal and its potential ramifications for the personalized DTC healthcare market.

The 23andMe Vision

Although it began as almost a novelty business offering saliva-based DNA tests that curious consumers can use to acquire information about their ancestry, 23andMe has harbored wider ambitions since launching in 2006. For current CEO and company founder Anne Wojcicki, the larger goal was nothing less than leveraging personalized genetic information to transform the way patients receive health care. “Genetics still has not been adopted into primary care,” noted Wojcicki in an interview.

In 2015, 23andMe dipped its toes into the geneticization-of-primary-care waters by establishing a therapeutics unit charged with using the company’s massive trove of genetic data to develop new drugs. Supporting the unit was a major reason for the company’s decision to go public in June, according to Wojcicki.

23andMe Opens a Lemonaid Stand

On Oct. 22, 23andMe announced that it has reached an agreement to acquire Lemonaid Health Inc. for $400 million, including $100 million in cash and $300 million in common shares. The deal, which is expected to close by the end of the year, brings 23andMe a giant step closer to its vision of integrating itself into the primary care experience, from wellness through diagnosis to treatment and prescription.

Lemonaid operates a nationwide, on-demand telehealth platform offering remote access to medical care and pharmacy services, including online consultations and delivery of prescription medicines. The platform asks users to complete an online assessment providing details of their health history. A team of doctors and nurse practitioners then review the information, sometimes asking users questions, and then offering free delivery of prescription medicines.

The service operates on a sliding scale of payments, from $25 for a telehealth visit, between $10 and $65 for lab tests and $95 per month for ongoing care for chronic diseases like anxiety and depression. It covers conditions like urinary tract infections (UTIs), birth control, acne, hair loss, hypothyroidism, erectile dysfunction, sexually-transmitted diseases and insomnia, amongst others.

The Business Integration Plan

“We believe that by combining Lemonaid Health’s telemedicine platform… with our consumer business, we are taking an important step in transforming the traditional primary care experience and making personalized healthcare a reality,” Wojcicki said. The immediate plan calls for training Lemonaid’s doctors how to harvest the potential of 23andMe’s pharmacogenetics reports for determining which drugs are likely to work best for a particular individual when prescribing drugs for Lemonaid customers. While there is no “defined product roadmap,” Wojicki said the eventual goal is to create a mode of care that best makes use of genomic information.

Lemonaid chief executive officer and co-founder Paul Johnson will become general manager of 23andMe’s consumer business and run continue to run the division, according to the company statement. Ian Van Every, Lemonaids’s U.K. managing director, will remain in a similar role with 23andMe.

Takeaway

When the history of personalized, genetics-based DTC medicine is written many years from now, the wedding of 23andMe’s genetics data and consumer expertise with Lemonaid’s telehealth platform may prove to have been a pivotal moment. “By starting with genetics as the foundation, we will give patients and healthcare providers better information about health risks and treatments, opening up the door to prevent as well as better manage disease,” noted Wojicki in a statement.