23andMe, a genetics testing company, has filed for bankruptcy protection in the United States in an effort to sell itself, with Chief Executive Anne Wojcicki stepping down immediately as the company struggles to stay afloat. The California-based company announced late Sunday that it filed for Chapter 11 bankruptcy proceedings to facilitate a sale process aimed at maximizing the value of its business after exploring strategic alternatives.
In a post on social media platform X, Wojcicki expressed disappointment over a previous bid she made to take the company private being rejected. She stated her resignation would better position her to pursue the company as an independent bidder. The company has been facing skepticism regarding its business model, disputes with investors, and rising concerns over the ownership of its extensive database. It has not reported a net profit and its market capitalization has dropped from a peak of $5.8 billion in February 2021 to less than $50 million for its Nasdaq-listed shares.
Mark Jensen, chair and member of the board’s special committee that announced the Chapter 11 process, stated that the court-supervised process is expected to help address the operational and financial challenges faced by the company, including further cost reductions and the resolution of legal and leasehold liabilities. The company’s revenues have decreased amid declining demand for its “spit kits,” and last year 23andMe announced a restructuring that ended its attempts to develop new medicines, a long-held goal of Wojcicki to turn the business into a drug development company.
Wojcicki has made several attempts to privatize the company and last year proposed to venture capitalists a plan to redefine 23andMe as a healthcare subscription service and genetic data provider. Her initial bid led to the resignation of independent board directors last September, who argued Wojcicki had not provided a “fully financed proposal” and suggested her “concentrated voting power” left few other options. Another bid was rejected earlier this month.
In her social media post, Wojcicki stated her support for the company, expressing a commitment to maintaining the long-term vision of being a global leader in genetics if she manages to obtain the company’s assets through the restructuring process. Joe Selsavage, the current Chief Financial and Accounting Officer, will succeed Wojcicki as interim Chief Executive, with 23andMe planning to continue its operations throughout the sale process. Wojcicki will remain on the company’s board of directors.
23andMe has also secured a commitment for debtor-in-possession financing of up to $35 million from JMB Capital Partners, an investment firm.
