Former Wall Street darling 23andMe is in trouble, diving into the weight loss drug market with determination
According to a press release issued on Thursday, the company plans to launch a weight loss membership program on its telemedicine platform Lemonaid by the end of this month. Users will be able to access branded drugs or combination formulations of semaglutide, the active ingredient in Novo Nordisk's weight loss drug. 23andMe also plans to initiate a new genetic study focusing on popular diabetes and weight loss medications to identify gene variations associated with weight loss and side effects
Struggling genomics and biotechnology company 23andMe is venturing into one of the hottest areas in the healthcare field - the weight loss drug market.
According to a press release issued on Thursday, the company plans to launch a weight loss membership program on its telemedicine platform Lemonaid by the end of this month. Users will be able to access the branded drug or combination formulation of the active ingredient semaglutide from Novo Nordisk, a heavyweight in the weight loss drug market. 23andMe also plans to initiate a new genetic study focusing on popular diabetes and weight loss medications to identify gene variations associated with weight loss and side effects.
Entering the popular GLP-1 drug market is a new strategy for 23andMe aimed at boosting its stock price and sales.
The release of the above news comes as 23andMe reported first-quarter revenue below expectations. The company's revenue for this quarter was $40 million, significantly lower than the analysts' expected $52.1 million.
With the slowdown in demand for DNA testing, the company's stock has lost nearly 60% of its market value this year, closing at $0.3729 on Thursday.
When 23andMe agreed to go public in 2021, its valuation was $3.5 billion, but the company's stock has been underperforming, remaining below the Nasdaq's minimum requirement of $1 for almost a year. 23andMe must raise its stock price by November to maintain compliance and continue trading.
Recently, 23andMe has shifted towards offering subscription-based products in hopes of creating repeat customers for its consumer business. However, this approach has not yet achieved the initial expected number of registrations for the company.
A few days ago, 23andMe rejected a proposal from CEO Anne Wojcicki to take the company private, with Wojcicki offering to buy outstanding shares at $0.40 per share. An independent committee expressed disappointment in the proposal in a letter, citing the lack of a premium above the stock price and a lack of financing commitments