Genetic testing company 23andMe filed for Chapter 11 bankruptcy protection late Sunday, as the firm continues to grapple with mounting financial challenges and data privacy concerns. Anne Wojcicki, co-founder and chief executive officer, announced her immediate resignation, though she will remain a member of the company's board.
The San Francisco-based company disclosed in a federal court filing in Missouri that it will seek to sell "substantially all" of its assets through a court-supervised reorganization process. Joseph Selsavage, the company's chief financial and accounting officer, will serve as interim CEO.
"We have had many successes but I equally take accountability for the challenges we have today," Wojcicki wrote in a post on X. "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."
Board Chair Mark Jensen stated Sunday, The company has determined that a court-supervised sale was "the best path forward to maximize the value of the business." Jensen added the move would also help the company cut costs and resolve legal and leasehold liabilities.
Once valued at $6 billion and seen as a pioneer in direct-to-consumer DNA testing, 23andMe has struggled to maintain profitability since going public via a special purpose acquisition company (SPAC) merger in 2021. The SPAC deal initially valued the company at $3.5 billion, but its stock has since plummeted. As of Monday, its market capitalization stood at roughly $25 million.
In recent months, the company has taken significant cost-cutting measures. Last November, it announced plans to lay off 40% of its workforce and shutter its therapeutics division. All of the company's independent directors resigned last September following negotiations with Wojcicki, who had made multiple offers to take the company private. The company's board committee rejected her latest proposal earlier this month.
According to the bankruptcy filing, 23andMe lists estimated assets and liabilities each between $100 million and $500 million. The company secured $35 million in debtor-in-possession financing from JMB Capital Partners to support its operations during the restructuring.
Beyond financial troubles, the company has faced heightened scrutiny over data privacy. In October 2023, hackers accessed the personal information of nearly seven million customers. On Friday, California Attorney General Rob Bonta issued a consumer alert urging residents to consider deleting their genetic data from 23andMe's website.
The company said it will continue operating as usual and that there will be no changes to how customer data is managed throughout the sale process. "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," Jensen said.
Wojcicki added, "As I think about the future, I will continue to tirelessly advocate for customers to have choice and transparency with respect to their personal data, regardless of platform."
