The US genetic testing company 23andMe has filed for bankruptcy protection in the US to help sell itself, as its chief executive quit to pursue a bid for the business after several unsuccessful attempts.
23andMe said late on Sunday that it had started voluntary Chapter 11 proceedings in the US Bankruptcy Court for the Eastern District of Missouri to “facilitate a sale process to maximise the value of its business”.
The loss-making company, which provides saliva-based test kits to customers to help them track their ancestry, added that it was operating as usual throughout the sale process. “There are no changes to the way the company stores, manages, or protects customer data,” it said.
The San Francisco-based company said its chief executive and co-founder Anne Wojcicki was stepping down. She has been pushing for a buyout since April last year but was rebuffed by 23andMe’s board.
The company is still reeling from a huge data breach in 2023 that affected the data of nearly 7 million people, about half of its customers. Revenues have fallen as many of its 15 million customers scramble to delete their DNA data from the company’s archives.
Over the weekend the California attorney general, Rob Bonta, urged the company’s users to ask it to “delete your data and destroy any samples of genetic material held by the company”.
Mark Jensen, the company’s chair, said: “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.
“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.”
Fighting for survival, 23andMe has cut the jobs of 200 people, amounting to 40% of its workforce, and stopped development of all its therapies in November. Wojcicki’s ambition has been to turn the company into a drug developer.
Wojcicki will be replaced by its chief financial officer, Joe Selsavage, until a permanent replacement is found but she is staying on the 23andMe board.
She co-founded the business in 2006 with Linda Avey and Paul Cusenza. In a post on X, she said she was “disappointed” by the bankruptcy filing and that her bid to take the company private was rejected. She explained she had resigned “so I can be in the best position to pursue the company as an independent bidder”.
She added: “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.”
Wojcicki offered to pay $0.41 (£0.32) a share earlier this month, down by 84% from an offer in February. Her private equity partner walked away after the board’s rejection of that bid.
Her latest offer valued 23andMe at $11m, below its current market value of just under $48m, and a long way from its $5.8bn peak in February 2021 after its stock market float on the Nasdaq exchange.
Last autumn, 23andMe agreed to pay $30m and give three years of security monitoring to settle a lawsuit accusing it of failing to protect the privacy of 6.9 million customers whose personal information was exposed in the data breach.
23andMe said it had received a commitment for debtor-in-possession financing of up to $35m from the Los Angeles-based private equity firm JMB Capital Partners, to support the business in the months ahead.
