Dive Brief:
- 23andMe, the DNA testing company once valued at $6 billion, filed for Chapter 11 bankruptcy protection on Sunday as it runs low on cash.
- CEO and co-founder Anne Wojcicki resigned on Sunday but will remain a director on the board. Joseph Selsavage, 23andMe’s chief financial and accounting officer, was named interim CEO.
- Wojcicki proposed taking 23andMe private last year, but a special committee of the board found the offer insufficient. The company is pursuing Chapter 11 bankruptcy to facilitate a sale, which board chair Mark Jensen said in a statement is “the best path forward to maximize the value of the business.”
Dive Insight:
23andMe’s finances have declined amid waning demand for DNA tests. The company reported $191.8 million in revenue in 2024, a 28% decline year over year.
At the end of the year, the company had about $277.4 million in total assets and $214.7 million in total debts, according to a petition filed in the U.S. Bankruptcy Court for the Eastern District of Missouri.
23andMe named creditors with the largest unsecured claims in the petition, including Labcorp’s National Genetics Institute subsidiary, marketing company Jellyfish and Blue Shield of California.
After Wojcicki made a bid to take 23andMe private last year, the company’s independent directors resigned in September. Two months later, the DNA testing firm disclosed plans to cut more than 200 employees, about 40% of its staff, as part of a restructuring. In January, 23andMe announced it was considering strategic alternatives, including a sale.
Now, as the company navigates a court-supervised sale, 23andMe will continue to operate its business as usual. There are no changes to how the company stores, manages or protects customer data, the company said in a statement.
23andMe filed motions with the court seeking the ability to pay employees, vendors and suppliers going forward. The company is also seeking the ability to reject several contracts, including real estate leases in Sunnyvale, California, and San Francisco. 23andMe also plans to use the proceeds to resolve legal liabilities from an October 2023 data breach.
23andMe has received a commitment for up to $35 million in debtor-in-possession financing from investment firm JMB Capital Partners.
The company’s stock price was down nearly 50% to 90 cents Monday afternoon.
