Genetic testing company 23andMe has filed for bankruptcy protection, after reporting significant financial losses in recent years.
The company is seeking authorisation to be sold under a chapter 11 bankruptcy plan. Its CEO, Anne Wojcicki, is stepping down from her role to pursue a bid to acquire 23andMe.
“After a thorough evaluation of strategic alternatives, we have determined that a court-supervised sale process is the best path forward to maximise the value of the business,” said 23andMe chair Mark Jensen. “We expect the court-supervised process will advance our efforts to address the operational and financial challenges we face, including further cost reductions and the resolution of legal and leasehold liabilities.”
“In addition, we are committed to continuing to safeguard customer data and being transparent about the management of user data going forward, and data privacy will be an important consideration in any potential transaction.”
23andMe said it plans to continue operating during the sale process, having secured US$35 million in funding from JMB Capital Partners to do so.
California Attorney General Rob Bonta recommended last week that the state’s residents ask the company to delete or destroy their genetic data, due to its financial issues. 23andMe has been based in California since its founding.
The company has seen major losses in recent years, reporting a year-over-year revenue drop of 12% and a GAAP net loss of US$59 million last quarter. After reaching a peak valuation of US$6 billion in 2021, its valuation had declined by 99% by 2024.
23andMe also said in November that it would dismiss 40% of its workforce, as well as ending its therapeutics division.
A bid from Wojcicki to acquire the company for US$2.53 per share faltered last month after investor New Mountain Capital withdrew from the deal. A second bid for $0.41 per share was then rejected earlier in March.
Wojcicki has aimed to take the company private. 23andMe’s independent directors resigned from the board in September after rejecting her plan to do so.
“I have resigned as CEO of the company so I can be in the best position to pursue the company as an independent bidder,” said Wojcicki. “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's (NASDAQ: ME) share price closed at US$0.73, down from its previous close at $1.79. Its market capitalisation is $19.58 million.
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