Genetic testing company 23andMe announced plans to acquire Lemonaid Health, a virtual care and pharmacy provider, in a $400m agreement expected to close by the end of 2021.
After going public earlier this year, 23andMe began to see a slowdown in purchases of its direct-to-consumer genetic tests, causing the company to search for new revenue drivers outside of its flagship product.
- 23andMe is a consumer genetics company with a mission to help people access and benefit from the human genome. It has multiple FDA authorizations for genetic health risk reports, and began working on drug development with GlaxoSmithKline after an investment from the pharmaceutical company in 2018.
- Lemonaid Health offers same-day telemedicine appointments and prescription drug delivery, leveraging clinical algorithms to assist its medical providers with treatment of a variety of common medical conditions.
- Following the acquisition, 23andMe will be able to provide genetically-informed primary care, using genetic testing as a foundation for individualized treatment plans and disease management. 23andMe plans to accomplish this in part by using its FDA-approved pharmacogenetics reports, which indicate how efficiently different people metabolize certain drugs.
The Takeaway
Combining 23andMe’s consumer business with Lemonaid Health’s telemedicine and pharmacy services gives the company unique positioning in the increasingly crowded virtual primary care market. Activating a large existing customer base with a promise of personalized healthcare has been a popular strategy with recent digital health moves (Headspace Health, Crossfit Precision Care), and could give 23andMe an advantage over more traditional providers.
