Genetic Testing Giant Faces Financial Collapse
Biotech company 23andMe has filed for bankruptcy in the US after struggling with declining demand for its ancestry testing kits and the impact of a major data breach. The company, once valued at $3.5 billion when it went public in 2021, has seen a sharp drop in market value.
On Monday (March 24), shares of 23andMe plunged 46% to just 96 cents following the resignation of co-founder and CEO Anne Wojcicki. She will be replaced on an interim basis by Chief Financial Officer Joe Selsavage.
23andMe Data Breach and Financial Troubles
A five-month-long data breach in 2023, which exposed the personal information of nearly 7 million customers, severely damaged the company’s reputation. As a result, 23andMe laid off 200 employees and halted its therapeutic development programs. It also agreed to a $30 million settlement in a lawsuit related to the breach.
The genetic testing industry has faced declining demand in recent years. AncestryDNA, a competitor, was acquired by Blackstone Group in 2021, but both companies have struggled with falling sales.
Wojcicki Eyes Another Buyout Attempt
Wojcicki has been seeking a buyout since April 2023, but her attempts have been repeatedly rejected by 23andMe’s board. Despite this, she announced on X (formerly Twitter) that she plans to make another bid. Her most recent offer of 41 cents per share valued the company at just $11 million—far below its current valuation of $50 million and its 2021 peak of $6 billion.
23andMe has secured $35 million in financing and will continue operations during the sale process. The company has not disclosed whether it has received other buyout offers. It listed its assets and liabilities between $100 million and $500 million.
With inputs from Reuters
