The once-famous genetic testing business 23andMe said on Sunday that it was filing for bankruptcy and would look for a buyer.
Additionally, the firm announced that Anne Wojcicki, the CEO and co-founder, is leaving her position immediately and will be replaced as interim CEO by Joe Selsavage, the Chief Financial and Accounting Officer.
About two months following the resignation of its entire board, 23andMe took the step of laying off 40% of its employees in November as part of a reorganization plan.
“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,” 23andMe Chair Mark Jensen stated. “We believe in the value of our people and our assets and hope that this process allows our mission of helping people access, understand and benefit from the human genome to live on for the benefit of customers and patients.”
Consumer and therapeutic services are the two primary service categories that 23andMe provides. According to S&P Capital IQ, the former gives consumers information about their genetic health profile and ancestry, including the likelihood that they may pass on specific illnesses to their offspring.
In addition to doing research on cancer, immunological disorders, and other ailments, the therapeutics unit works to find treatments.
Concerns about data privacy
Concerns regarding the privacy of 23andMe’s customers’ genetic data, which is utilized for a variety of purposes, including ancestry research, have been brought up by the company’s difficulties.
The business stated that it would not alter its methods for handling and safeguarding customer data in order to file for bankruptcy protection.
Although people’s data may be included in a company sale, 23andMe customers must expressly consent to the company sharing their personal information.
A person’s agreement is needed before their genetic data is transferred from one entity to another, according to privacy rules approved by some states.
Any buyer of 23andMe’s assets would have to abide by applicable privacy rules regarding user data, the company stated in its bankruptcy declaration.
Additionally, the business has stated in the past that any consumer information it provides to outside parties is anonymous and cannot be linked to specific individuals.
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Customers can also cancel their accounts on 23andMe. Users must log into their accounts and submit a request in order to accomplish that.
The user must next confirm the email that the corporation sent confirming the request to remove the data.
Before trading began on Monday, 23andMe’s stock, which had previously been worth over $300 per share, had dropped to 79 cents. Compared to the same period last year, when it lost $259.7 million on $44.7 million in revenue, 23andMe reported a third-quarter net loss of $26.8 million on $60.3 million in January.
In the U.S. Bankruptcy Court for the Eastern District of Missouri, the business filed for Chapter 11 protection. 23andMe stated that it would ask for bids from possible buyers over a 45-day period and maybe hold an auction if it were approved in bankruptcy court.
Wojcicki herself is one potential purchaser. In a social media post on Monday, the executive, who recently made an acquisition offer that 23andMe turned down earlier this month, hinted that she would make another bid for 23andMe.
She tweeted, “I have resigned as CEO of the company so I can be in the best position to pursue the company as an independent bidder,” and she added that she still has faith in the company’s business and brand.
“We have had many successes but I equally take accountability for the challenges we have today. There is no doubt that the challenges faced by 23andMe through an evolving business model have been real, but my belief in the company and its future is unwavering,” she stated.
