23andMe stock sell-off adds to its woes

Shares in genetic testing company 23andMe have continued to slide from an already weakened position in the last few days after a major investor announced its plan to sell its stake.

The latest decline seems to have been prompted by a notification from Sequoia Capital last Friday that it was planning to divest at least 300,000 shares in 23andMe, according to a Financial Times report, which says the investment group's stake has lost 98% of its value since 23andMe listed in 2021.

23andMe is currently trading at around $3.15, down from more than $18 at the start of the year and more than $200 on its debut.

Last week, 23andMe announced sweeping job losses affecting around 40% of its headcount and an exit from the drug discovery and development business, as it tries to slash $35 million from its annual costs.

The move leaves it focused on its original business of providing saliva-based genetic testing for health and ancestry – which is proving to be difficult to sustain – along with partnerships with biopharma companies to use its genetic data resources for drug discovery and an online health operation that has grown out of its takeover of telehealth firm Lemonaid in 2021.

Mirador alliance

Yesterday, the company announced a new R&D partnership with precision medicine company Mirador Therapeutics, granting the biotech a license to use a "targeted set of aggregated, de-identified genetic and phenotypic data" to find new therapeutics for immunology and inflammation-related diseases.

Mirador will roll the database into its own repository of immune-mediated disease data, which includes over two million human molecular profiles.

Sequoia's loss of faith in 23andMe's business is particularly notable as it was a prominent early investor in the company, leading a $250 million private round in 2017, with managing partner Roelof Botha holding a position on the board until he stepped down in September.

The FT also notes that Peter Taylor – another 23andMe board member who resigned in September – has also recorded his intention to sell nearly 19,000 shares in the company.

At the time, the departing independent directors complained in a letter to the company's founder and chief executive, Anne Wojcicki, that "after months of work, we have yet to receive from you a fully financed, fully diligenced, actionable proposal that is in the best interests of the non-affiliated shareholders."

Their decision to step down came after a plan proposed by Wojcicki, to take the company private with a $0.40 per share purchase of all shares she does not already own, was rejected by a special committee of the board.

23andMe's valuation is currently around $76 million, a far cry from its all-time high of $3.5 billion.