Anne Wojcicki: Yes. We’re not giving much on Total Health. I think that more and more just – it’s the first real integration with Lemonaid and being able to have on one system access to care, being able to order blood, being able to order medications at some point, being able all in one and all on the 23andMe brands. So I think that is one of the big milestones for us. I think what you can also anticipate in the future is more and more, how do we bring what we’re learning from Total Health also to all of our existing customers. So the 14-plus million customers that we have, how is it that they can get a version of this type of care platform. So I think there’s a lot that we’ve learned. Every time we have launched something new to customers, I think there’s a fair amount that we can learn about what is it they want.
How are they adopting with the right way to explain it to them. As I mentioned before, I think that this is a – it’s a big shift for us to – from just being a test where people are getting information and learning about themselves to where they are now getting that information, but we are helping them apply it. I also would just point to things like HealthTracks, as a way that in Health Action Plan as ways that we are looking more and more to be able to give you your genetic information, your wearables, self-report data all into a score that helps you understand really where you are at on a risk curve for specific disease conditions. So I think more and more, you can see us integrating lots of different data sets to give you something that is truly personalized towards you.
And I think you can see us emphasizing more and more subscriptions, which we call membership, membership products that help people get affordable preventive care.
Steven Mah: Okay. That’s helpful. And one more question. On the effort and the BD effort in terms of partnering…
Anne Wojcicki: We lost…
Operator: I would now like to turn the call back over to Ian for further questions.
Ian Cooney: Thank you. Steven jumps back on. I will now read the top shareholder questions from our Say Technologies Q&A platform. I’ll probably go through five or six here. The first one, which is top of mind for shareholders is what is the plan to stay compliant with NASDAQ listing requirements?
Anne Wojcicki: Yes. This is something that’s obviously top of mind for us as well. We are actively monitoring markets, staying on top of it in discussions considering things like a reverse stock split, but also most importantly, just continuing to execute on the business and showing and confirming shareholder value.
Ian Cooney: Great. And sort of on that same shareholder value team, a big kind of the second most popular question was what are you doing to increase the value of the company? I know we’ve talked about some of that stuff on the call that maybe you can go ahead and reiterate.
Anne Wojcicki: Yes. So three areas that I think are really key for people just to remember where we focus on value. So as I mentioned, on the consumer side, we really focus on expanding the offerings we can provide to customers. So it’s been very much of people buy our product, and it is a one-time sale. And we think about lots of opportunities where we can engage people to come back. We can provide true value for them in the world of preventive care and we can also establish a truly viable membership business where our customers are returning value, and it is a solid and stable recurring business model for the company. So that is number one in consumer and that is very much where we are focused this fiscal year. On research, research is a fascinating area right now, particularly because of the incredible interest in the world of AI and companies that are looking at how to really change their approach to drug discovery, it can start in many different ways, but the foundation is genetics.
Understanding human genetics, understanding how that translates to biology and how you can leverage genetic information to identify drug targets and be more efficient in the entire process. So we are very excited about the collaboration that we signed with – the partnership we signed with GSK, the opportunity to do more and for us to really be a leader in AI drug discovery. Last, in therapeutics. It has been a long journey and a very exciting journey, translating our data into novel therapeutics. And I’m very excited about 1473 and seeing the potential and the opportunities in patients. So we look forward to updating you on 1473 as that progresses. But I am very inspired and excited about what we have been able to do with that translation of data into patients.
Ian Cooney: Great. Thank you, Anne. Next one, what is the cost of the data breach? And what is the plan to increase data security and restore trust in the company?
Joseph Selsavage: We’ve incurred $2.7 million in expenses related to the data breach or data in success cybersecurity incident. To date, we have also booked $1 million in our financials that you see in the 10-Q as we actually booked $1.7 million in anticipated insurance recoveries. We continue to invest in data security. We now require two-factor authentication from all of our customers. And we realize that our business really runs on the trust of our customers, right? It’s what we hold in the highest regard. And we intend to be doing this for a long time and continuing to drive innovation and using genetics to help people manage health risk and improve their health span. And for us, we’re continuing to look at how we can continue to increase data security at 23andMe.
Anne Wojcicki: And just to jump in there, I would say the company, it has been a top priority since we started this company, that data security and privacy and transparency are core values for this company. So we have, as Joe mentioned, we have instituted two-factor authentication. It is core for us, a critical priority for us to be leading in privacy. And you will see us continue to be privacy leaders as we sort of enter into a new era of how people are thinking about all such data.
Ian Cooney: Great. Thank you. Next question, you touched on this a little Anne, but maybe we can dig into a little further, AI is causing a new gold rush for quality data. You have some of the best quality data out there. Are you engaged with any one specifically for AI use cases and how do you create value in that arena for the company?
Anne Wojcicki: Yes. Honestly, it’s a very exciting time because it is – you’ve seen data transform all these other industries and you see it now coming fast and furious for the entire healthcare space and is particularly exciting for the world of drug discovery because drug discovery is so challenging and so expensive. So anything you can do that is going to make it more efficient and have a higher likelihood of success is going to really trickle down and have huge consequence, huge benefits for the entire world. So we see a lot of opportunities for our data. We have the world’s largest recontactable genotype phenotype database that is out there. It has been designed and set up since we started the company. It’s been designed for research.
So we have been engaging in research projects almost since the inception of this company. We have a tremendous amount of experience with translating that data in for therapeutics. So we are working on partnerships that want to mine the data and leverage it. There’s all kinds of varying abilities in the industry of people who are very familiar with AI models and that this could fit in with some of the work that they’re already doing. And then you get other groups that have different types of approaches of how they leverage genetics for drug discovery. But it’s a very exciting time, there’s no doubt that having lots of data is going to be a foundation for therapeutic discovery in the future. We are also leveraging all this data for 23andMe internal research meaning that we are translating that for customers, what are ways that we can leverage all of these insights and the world leaders in risk prediction.
We’re also doing a fair amount of work understanding how you could do DNA language models and how we can be best at predicting financial target, target identification for therapeutics. So there’s a lot of great opportunities out there, and we continue to stay on top of this industry.
Ian Cooney: Excellent. So last one here for Joe, can you address – to the extent that you can anyway, how do you plan to move the business towards profitability?
Joseph Selsavage: We were pleased with the progress we’ve made to date over the past year in moving the business to profitability. It’s really a two-pronged effort, but the most important being driving our growth in both membership and research businesses to have ongoing recurring revenue. And we can also continue to look at how we can optimize our cost structure and really have a high bar for how we invest in the business in the near-term.
Ian Cooney: Great. That’s it for us.
Operator: Thanks for joining us. This concludes today’s conference call. Thank you for participating. You may now disconnect. Everyone, have a great evening.
