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What just happened? DNA testing specialist 23andMe has filed for Chapter 11 bankruptcy protection in order to facilitate a sale. Mark Jensen, chair and member of the special committee of the board of directors, said that after a thorough evaluation, it was decided that a court-supervised sale process would be the best path forward to maximize the value of the business.
23andMe was founded in 2006 as a direct-to-consumer genetics testing specialist and became a publicly traded company in June 2021, trading under the ticker symbol “ME.” At the time, co-founder and CEO Anne Wojcicki said the company had over 11 million users that were using genetics to transform how they diagnose, treat, and prevent human disease.
At its peak, 23andMe’s valuation topped $6 billion, but things wouldn’t last.
The company struggled to recover from a massive data breach that started in April 2023 and ran for a full five months. It was later revealed that hackers had gained access to information on around 5.5 million people that were using the company’s DNA Relatives feature. Exposed data reportedly included names, birth years, ancestry reports, and more. Another 1.4 million users reportedly had family tree data exposed in the breach, a 23andMe rep told TechCrunch.
Consumers also sort of lost interest in “at-home” DNA testing, which some view as a “one and done” model that doesn’t lend itself to repeat business.
The company attempted to restructure, announcing plans late last year to lay off 40 percent of its workforce. The move was expected to save more than $35 million annually with a one-time expense of $12 million related to severance packages. It was perhaps a case of too little, too late.
Share value in 23andMe has cratered, and currently sits at just $0.92 per – down from an all-time high of more than $320.
The company also announced that Wojcicki is resigning as CEO, effective immediately, but will stay on as a member of the board. CFO Joe Selsavage has been appointed interim chief executive, we’re told.
Image credit: National Cancer Institute
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