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Genetics testing company 23andMe has filed for bankruptcy protection in the US in a bid to sell itself, with chief executive Anne Wojcicki stepping down immediately as the once high-flying tech group fights for survival.
California-based 23andMe said late on Sunday that it had filed for Chapter 11 bankruptcy proceedings to “facilitate a sale process to maximise the value of its business” after exploring strategic alternatives.
In a post on X on Sunday, Wojcicki said she was disappointed that a previous bid she had made to take the company private was rejected. She was resigning in order to “be in the best position to pursue the company as an independent bidder”, she added.
The company has been facing doubts over its business model, disputes with investors and growing concern over who owns its vast database. It has never reported a net profit and has plunged in value from a peak of $5.8bn in February 2021 to a market capitalisation of less than $50mn for its Nasdaq-listed shares.
“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,” said Mark Jensen, chair and member of the board’s special committee that announced the Chapter 11 process.
Revenues have slumped amid slowing demand for 23andMe’s signature “spit kits”, and the company last year announced a restructuring that halted its efforts to develop new medicines — ending Wojcicki’s long-held ambition to turn the business into a drug development company.
Wojcicki has tried multiple times to take the company private and last year pitched venture capitalists on a deal that would redefine the company as a healthcare subscription business and a provider of genetic data.
Her first bid helped trigger the resignation of independent board directors last September. They complained Wojcicki had failed to offer a “fully financed proposal” and said her “concentrated voting power” left them with few other options. Another bid was rejected earlier this month.
Wojcicki said in her X post on Sunday that she was supportive of the company, adding: “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.”
Joe Selsavage, the company’s chief financial and accounting officer, will replace Wojcicki as interim chief executive, with 23andMe intending to continue operating its business during the sale process. Wojcicki will remain on the company’s board of directors.
23andMe said it had also received a commitment for debtor-in-possession financing of up to $35mn from investment firm JMB Capital Partners.
