23andMe board rebuffs CEO plan to take the firm private
Anne Wojcicki, CEO and co-founder of 23andMe
A proposal by 23andMe founder and chief executive Anne Wojcicki to take the genetic testing company private has been rejected by a special committee of the board of directors.
Wojcicki offered to buy all the shares in the company she does not already own last week for $0.40 apiece in cash, according to a Securities & Exchange Commission (SEC) filing, which indicated she and her associates own around 20% of the stock.
The filing alluded to a "constrained capital markets and fundraising environment" that was making it hard to maintain its mission of embedding its testing technology within healthcare systems around the world.
23andMe went public via a merger with a special purpose acquisition company (SPAC) in 2021 and at one point was valued at $3.5 billion, but has found it hard to generate consistent revenue streams, not least because its kits are generally only used once by customers.
Total revenues fell to $220 million last year from around $300 million in 2023, with a net loss of $209 million versus $64 million in the prior year and, since its public debut, 23andMe's shares have lost 96% of their value.
The company formed a special committee earlier this year to explore its strategic options, shortly after the Nasdaq warned the company had six months to bring its share price back above $1. Today, it was trading at $0.38 with a valuation of $203 million.
In a response to Wojcicki's offer, the committee said that it was "disappointed" that she had failed to offer a premium to 23andMe's current stock price, and had not come to the table with committed financing from other investors.
The board members also asked Wojcicki to withdraw her opposition to an alternative transaction so that it can assess whether there is interest from other potential buyers.
"We view your proposal as insufficient and not in the best interest of the non-affiliated shareholders," wrote the committee members in a letter to Wojcicki. "Therefore, we are not prepared to move forward under the terms provided," they added, although they were open to a limited amount of additional time to submit a revised proposal.
The board has also taken the decision to engage a consultant to look at other strategic options while the CEO comes up with a new offer.
"In your capacity as CEO, we expect your full support in these efforts," they concluded.
Joins US lung cancer genetics project
In the meantime, 23andMe is carrying out its business as usual. Today, it was named as a partner in a research consortium in the US set up to build an open-source database of genetic data in lung cancer, aiming to boost diagnosis rates, find ways to prevent the disease and improve patient care.
The Lung Cancer Genetics Project brings together the genetic testing company with UK-based patient advocacy and research group Oncogene Cancer Research, along with 20 other lung cancer charities, with the goal of recruiting 10,000 adults who have been diagnosed with lung cancer in the US who will receive 23andMe kits at no cost. It is being funded by Troper Wojcicki Philanthropies.
"We hope that by understanding how genetic factors play a role in lung cancer we can improve outcomes and further personalise care for the millions of us diagnosed with lung cancer each year," commented Yvonne Diaz, co-founder and chair of Oncogene Cancer Research, which was diagnosed with stage IV, ALK-positive lung cancer in August 2021.
