23andMe Files for Bankruptcy, CEO Anne Wojcicki Steps Down

In a shocking turn of events for the genetic testing industry, 23andMe has filed for Chapter 11 bankruptcy and announced the resignation of its co-founder and CEO, Anne Wojcicki. This development marks a significant shift in the company's trajectory and raises questions about the future of direct-to-consumer genetic testing.

Bankruptcy Filing and Leadership Change

23andMe, once a pioneer in the personal genomics space, has initiated Chapter 11 bankruptcy proceedings as part of a strategic move towards a court-managed sale. Concurrent with this announcement, Anne Wojcicki has stepped down from her role as CEO but will remain on the company's board of directors. Joseph Selsavage, the chief financial and accounting officer, has been appointed as interim president and CEO.

The decision comes after a series of attempts by Wojcicki to take the company private. Her most recent offer of $2.53 per share, valuing the company at approximately $74 million, was rejected by the board. Following the bankruptcy announcement, 23andMe's share value plummeted by more than 50%, settling at around 88 cents.

Mark Jensen, chair of the board of directors, stated, "After a thorough evaluation of strategic alternatives, we have determined that a court-supervised sale process is the best path forward to maximize the value of the business." He emphasized that this process would address operational and financial challenges, including cost reductions and the resolution of legal and leasehold liabilities.

Industry Challenges and Company Transition

23andMe's financial troubles reflect broader challenges in the direct-to-consumer genetic testing market. Since going public in 2021 through a $3.5 billion SPAC deal, the company's stock price has dropped by over 97%. This decline coincides with waning consumer interest in at-home DNA and ancestry tests.

The company's attempts to pivot into genetics-informed drug development have also faced setbacks. In November, 23andMe laid off 40% of its staff and shuttered its cancer therapeutics R&D division, which had been developing two immuno-oncology programs in early-phase clinical trials.

Despite these challenges, 23andMe has made significant contributions to genetic research, with over 250 publications resulting from its vast database of customer genetic information. The company has also obtained FDA clearances for direct-to-consumer tests examining genetic cancer risks linked to prostate, breast, and ovarian cancers.

Data Privacy and Future Prospects

A key concern in the bankruptcy proceedings is the fate of the genetic data from more than 15 million customers. Jensen assured that the company is "committed to continuing to safeguard customer data and being transparent about the management of user data going forward," emphasizing that data privacy will be a crucial consideration in any potential transaction.

Wojcicki, in a statement on social media, expressed her intention to remain involved as a potential bidder in the company's future. She acknowledged the company's challenges but reaffirmed her belief in its mission, stating, "Consumers are rising up and asking for more control over their health and want greater knowledge about how to be healthy and why they may have health issues."

As 23andMe navigates this uncertain period, the outcome of its bankruptcy proceedings and potential sale will likely have far-reaching implications for the personal genomics industry and the broader field of precision medicine.