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23andMe CEO on going public via Richard Branson SPAC Merger: 'a no brainer'

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Virgin Group Founder Sir Richard Branson and 23andMe CEO & Co-Founder Annew Wojcicki join Yahoo Finance to discuss their $3.5 billion SPAC deal.

Video Transcript

MYLES UDLAND: We have talked a lot about SPACs this year, the hottest trend within financial markets. And we have some very exciting news coming over the wire today, news that VG Acquisition Corp, which is a SPAC sponsored by Virgin Group, will take 23andMe public. And we are joined now by Sir Richard Branson, as well as Anne Wojcicki, the CEO and co-founder of 23andMe. Really appreciate both of you taking some time to talk with us this morning.

So, Richard, I'd love to begin just with your view on this transaction, how excited you are about the 23andMe business and where it fits into what you wanted to accomplish with this vehicle when you brought this back to market.

RICHARD BRANSON: Well, obviously very excited. We looked at literally hundreds of companies. And 23andMe stood out from the crowd. I've been an early investor in 23andMe. I even managed to discover that my great, great, great-grandmother was from India and had no idea that I had some Indian blood in me, through 23andMe. And over the years, I've been very impressed with them and her team and everything that they're trying to achieve.

BRIAN SOZZI: Anne, congratulations on this one. 23andMe not a new company. You have been a private company for some time. Why the decision now to become public?

ANNE WOJCICKI: You know, it's all about the maturity, the right time to be public, as well as this opportunity. And I think we're over a decade old now. We have the team in place. We have the infrastructure that's built with our customers. We have this well-validated platform. It's the right time to step up with that maturity of being a public company.

And second, I can't emphasize enough-- who your shareholders are matters. And so, when people ask the question, why an IPO versus a SPAC, the SPAC with Richard and Virgin was a no-brainer. Like, our core value-- our first core value is think big.

And think about what Richard and Virgin embody. Like, it's that mentality of think big. And they have the experience of working in healthcare. So having them as a partner is just-- it was a super exciting opportunity. Plus, it's really the right time for the company to take it to the next level as a public company.

BRIAN SOZZI: Anne, you've been thinking big for many years. And you struck a deal in 2018 with GlaxoSmithKline. They took a $300 million stake in your company to help along the lines of drug development. What are you working on there? Because that was a pretty fascinating transaction.

ANNE WOJCICKI: Yeah, you know, part of the reason why we, like I said, were at that point in maturity, is that in January, my therapeutics team came to us and said, listen, we're just exceeding expectations for what we thought was going to happen. And we have more programs coming forward than we expected.

And so, in order to take advantage and to really move those forward and to help our customers ultimately benefit from the Human Genome, we wanted to have this capital. So I'm really excited about-- we have our first program that is in humans now. And I'm excited to keep watching that go forward.

JULIE HYMAN: So, Richard, it's Julie here. Thank you so much for being here. I'm curious, as you are deploying capital now and you're deploying, obviously, some through this SPAC, how you're thinking about your investing. Are you still doing earlier stage investing? I mean, how are you viewing a SPAC vehicle as a tool in your bigger toolbox?

RICHARD BRANSON: Well, look, we learned about SPAC through taking Virgin Galactic public through a SPAC and liked the experience, liked the speed, the simplicity of it. And therefore, we set up our own SPAC and went searching for a really great company to partner with. At Virgin, we try to partner with companies that can make a real difference in the world, like healthcare companies, energy companies, anything that makes a positive difference.

And 23andMe, for instance, just their drug development side could shorten the development of a new drug using all the knowledge that they've gained over the last 12 years by as much as 3 and 1/2 years, which makes coming up with new drugs that much quicker. And I think 23andMe can lead to people having a much healthier lifestyle, and yeah, and possibly even through drug development and other things that they can save one of our-- save an investor's life or save their children's life. So it's a great company, really worthwhile company to put some money in.

JULIE HYMAN: And let's talk about-- more about what demand the company is seeing, Anne, to bring you back into it. I know last January, you gave an update, where you said you were laying people off. And you were not seeing as high demand from consumers for your test. So a year on, how did things change through the pandemic? What kind of demand are you seeing right now? And what about staffing right now?

ANNE WOJCICKI: It was really a transition. Like, when I think on that point, it was a real transition, where we-- in 2018, we did see more of a cooling, where people were taking a pause and saying we want to-- we're concerned about privacy, and we just want to take a pause. And what we had also planned at that time period was really about emphasizing more and more of the health opportunity.

And ancestry and health have always been key components of the product. But more and more, the future is about the health side. How is it that you can get your genetic information and really benefit from the Human Genome and live a healthier life? And there's a huge opportunity that I see about getting this information and being able to prevent disease. Like, that, to me, is-- it's personally very exciting for me.

And also, when we've surveyed our customers, that is what they are-- like, that is what they're looking for. It's a bigger opportunity on the health side. So when I see opportunities for us going forward, it's really, like, continuing the top line growth, as well as empowering our over 10 million customers to keep taking actions to be healthier.

MYLES UDLAND: Well, and Anne, I guess when you think about the trajectory that maybe 23andMe seems to be on and now that you kind of see it being ongoing going forward, what is the-- it sounds almost like-- and going through the investor deck, there's been kind of an on-the-fly-- pivot is kind of a harsh word to use, but maybe a reorientation of what the possibilities are with the information that you have. How are you thinking about that, especially you're coming on the heels of a global pandemic.

ANNE WOJCICKI: Yeah, I don't-- it hasn't been a pivot. If you think back on our mission statement, it's about helping customers access, understand, and benefit from the Human Genome. And the key thing that we're doing right now is helping our customers benefit. And they're going to benefit in two ways. One is they are going to be empowered with information to help them live a healthier life.

And second is on the therapeutic side, is 23andMe is working hard to say, how do we analyze all this data? How do we understand those genetics so we can develop very personalized therapeutics that potentially could cure diseases? So the pandemic has been-- it's absolutely transformative in healthcare because it's ushered in this whole era of virtual care. And it's ushered in a whole enthusiasm for prevention. We all see what that benefit now is of actually preventing a disease. You know, and we see what those underlying risk factors and the risk that comes with COVID.

So we see an enthusiasm from our customers on two sides. One, virtual care is absolutely something that people have embraced. And second, there's absolutely an enthusiasm, a greater enthusiasm now, on preventing disease.

BRIAN SOZZI: So, Richard, how concerned are you with how tech companies are using our data right now?

RICHARD BRANSON: Oh, I think it's something to be watched. I mean, Anne would actually be a better person to answer to that because she's more in that world than I am. But by and large, I think tech companies have transformed our lives for the good. I mean, I was just saying to my wife this morning, these can be painful. iPads can be painful. But only 20 years ago, I would carry around suitcases full of paperwork and wade through those suitcases and handwrite the letters to people and couldn't get anywhere near as much done as we do today.

So, yeah, I'm sure there are-- I'm sure that each tech company will know where they could improve themselves, where they could-- where they could-- yeah, make-- yeah, where they could improve themselves. And I'm sure they're working hard on doing it. But by and large, I think they've really transformed the world in a positive way.

BRIAN SOZZI: Anne, what type of protocols have you put in at 23andMe to protect consumer data?

ANNE WOJCICKI: So I'm really passionate about this topic, and I would say, like, myself, like, the things that I think about with privacy is about making sure our customers have choice and transparency. And I think about, going back to your last questions here, like, what is it that-- the value that comes from this data is incredible.

But I think that the core tenet of it is that people-- like, people need to realize behind all of this information are the human beings and those lives. And that is absolutely-- we always run the company based on what is best interest for our customer. And also what's best interest is that-- is the choice and that transparency about the decisions that they're making. So, privacy is always a top priority for us. But the tenets of it for how we operate in every way is about choice and transparency.

BRIAN SOZZI: Anne, I do want to go back to what you're doing on the therapeutic side. When might we see that first drug in concert with what you're doing? When might we see that? And what are you focusing on? What's the health issue?

ANNE WOJCICKI: The first program is Move Forward. It's in humans with GSK. We haven't announced the timeline of when there will be data on it. But it is an immuno oncology program. I'm very excited about it.

JULIE HYMAN: And so, Anne, talk to me about profitability at 23andMe because we talk a lot about a lot of the IPOs and SPACs right now, it's about future, right? It's about growth. What does that look like for you?

ANNE WOJCICKI: We're absolutely continuing to invest in the future. And I think that you should expect that we're continuing to build out the platform to benefit our customers on their own experience and how they are going to be healthier and absolutely continuing to invest in the therapeutic pipelines. So we're, like, very committed to making sure that our customers ultimately benefit from the platform and that it's going to keep requiring the company to keep investing in the consumer business, as well as on the therapeutic side.

MYLES UDLAND: You know, so Richard, obviously, the deal today about 23andMe, but I'd be remiss if I didn't ask you about space and what's happening there. So much exciting stuff has happened just within the last year, both at Virgin and some of the other companies that are trying to-- you know, we're now talking about getting civilians up into space. I'm curious how you're thinking about that part of the market, something that certainly you've been passionate about for a long time.

RICHARD BRANSON: I'm very excited. I mean, it's taken us sort of 16 years to get to this stage. Our next flight is penciled in around Valentine's Day, the next test flight. And then there will be another test flight, and then I'm hoping to go up myself. So, personally very excited. And I think all the people who signed up to go into space with us are extremely excited that we're on the verge of being able to fulfill their dreams.

And then, obviously, we had a big breakthrough with Virgin Orbit two weeks ago, where it's the first company to put this particular kind of rocket into space into orbit. And it put 11 satellites around the world and put them all in the right place around in orbit. And that was a great breakthrough as well.

So, space is exciting. But we have two very, very big and powerful competitors in Elon and Jeff. But we're all doing something slightly different. And if you put the three projects together into one, I think we can all achieve some pretty incredible things.

JULIE HYMAN: Certainly, we love talking about space here on Yahoo Finance as well. Just continue for one more beat on that. So, Richard, you talk about the competition here. And of course, the other big news on this was that Jeff Bezos stepping away from the day-to-day at Amazon might have more time to devote to Blue Origin. How do you think about that rivalry? Do you think about it as a rivalry? Do you all talk to each other and sort of compare notes? Or is it a more sort of adversarial relationship?

RICHARD BRANSON: We're friends. I mean, we're all-- as I said, we're all doing something a little bit different. So, you know, and maybe, actually, Jeff and Elon will go into competition with their much bigger rockets. But at the moment, I think we're all doing something a bit different. And Virgin, we're trying to create a space company that benefits people back here on Earth. Elon has obviously got wonderful plans to go all the way to Mars.

And yeah, I think every one of us has got something pretty exciting going on. Obviously, with Virgin Orbit, we want to connect millions of people who are not connected via satellite. So, yeah, exciting time.

BRIAN SOZZI: Anne, last one to you, where do you think 23andMe is a year from now?

ANNE WOJCICKI: Oh, great question. We're on a journey. And that journey really, you know, I think about. Like, Francis Collins in 2003 made a statement about how the potential of genetics is really to transform prevention, diagnosis, and treatment of disease. So a year feels pretty short in this journey of, like, how do you transform all of it? Like, it's absolutely what we're going after.

So, in a year, I'm enthused about progress that we'll see in our therapeutic programs. And I think that you'll see a lot more developments that come out in our subscription product and what we're doing to really help our customers with the genetic information that we've delivered. So I think you can look there. But like I said, we plan to keep reinvesting in the company. And it's a journey for a big transformation that ultimately will really benefit all of us.

MYLES UDLAND: All right, I think the bar belled imagery of learning more about ourselves and also learning more about the cosmos certainly fits there. Sir Richard Branson, thank you so much for joining the program. Anne Wojcicki as well, co-founder and CEO at 23andMe, really appreciate both of you taking some time to speak with us this morning.

RICHARD BRANSON: Thank you.