23andMe files for bankruptcy protection
23andMe co-founder and chief executive Anne Wojcicki is hoping to make a bid for the company.
US DNA testing specialist 23andMe has filed for bankruptcy, prompting the resignation of co-founder and chief executive Anne Wojcicki with immediate effect.
The Silicon Valley company said the Chapter 11 filing aims to "facilitate a sale process to maximise the value of its business" and it will continue to operate as normal while the process plays out. It also stressed that there will be "no changes to the way the company stores, manages, or protects customer data."
23andMe said it was looking to sell the business in January, a few weeks after announcing job losses that cut its headcount by around 40% and an exit from drug discovery and development operations as it tried to slice $35 million off its annual costs.
Wojcicki had launched a bid to take the company private with a $0.40 per share offer that was rejected by the board, and her resignation may not spell the end of her involvement with the company. In a post on X, she said she was resigning in order to be "in the best position to pursue the company as an independent bidder."
She continued: "If I am fortunate enough to secure the company's assets through the restructuring process, I remain committed to our long-term vision of being a global leader in genetics and establishing genetics as a fundamental part of healthcare ecosystems worldwide."
23andMe was founded 19 years ago to provide saliva-based genetic testing of health and ancestry to consumers, going public in 2021. It subsequently branched out into drug development, notably forging an alliance with GSK that has since come to an end, and also dipped its toes into telehealth with the acquisition of Lemonaid.
Revenue growth was rapid, but shifted into reverse in recent years, falling 27% to $220 million last year, in part because genetic testing does not generally call for any repeat business and orders for genetic testing kits were markedly lower; but also as a result of the end of its GSK alliance. It was also forced to settle a lawsuit last year alleging it had failed to protect customers' privacy after a data breach.
Filing for bankruptcy could add to the pressure on the company, as California's Attorney General issued an urgent consumer alert to 23andMe customers, advising them to delete their data – undoubtedly the company's core asset – due to its financial distress. It also gave explicit instructions on how to go about that.
AG Rob Bonta said: "I remind Californians to consider invoking their rights and directing 23andMe to delete their data and destroy any samples of genetic material held by the company."
23andMe chair Mark Jensen said the court-supervised process would help the company meet operational and financial challenges, including "further cost reductions and the resolution of legal and leasehold liabilities."
