DNA testing firm 23andMe files for bankruptcy, CEO resigns

23andMe on Sunday filed for bankruptcy in the U.S. after struggling with the fallout of a data breach and weak demand for its ancestry testing kits that featured in Oprah Winfrey’s annual list of favourite things just eight years ago.

The biotech unicorn has seen a sharp fall in its market value since then. On Monday, its shares fell 46 per cent to 96 cents after co-founder and CEO Anne Wojcicki, who made multiple failed takeover bids, also resigned.

• Are you worried about your 23andMe data? We want to hear from you. Send an email to ask@cbc.ca

Wojcicki will be replaced by chief financial officer Joe Selsavage on an interim basis.

Founded in 2006, 23andMe was the first company to offer autosomal testing by getting users to directly submit saliva samples, which would be analyzed to produce charts of their background and lineage. 

In 2021, billionaire Richard Branson’s SPAC (special-purpose acquisition company) took 23andMe public at a $3.5 billion US valuation. AncestryDNA, which offers similar tests, was also bought by Blackstone Group that same year, despite slowing sales for both the genetic testing companies.

A five-month-long data breach in 2023, which exposed personal data of nearly seven million customers, dealt a major blow to 23andMe’s reputation. Late last year, it laid off 200 employees and stopped development of all therapies.

It also agreed to a $30-million US settlement in a lawsuit related to the breach.

Wojcicki has been pushing for a buyout since last April but has been rebuffed by 23andMe’s board. She reportedly used her contacts including ex-husband and Google co-founder Sergey Brin to help drive initial investments. In September, all of 23andMe’s independent directors resigned from the board amid Wojcicki’s attempts to take the company private. Three new independent directors were appointed in October. 

She intends to make another bid, Wojcicki said in a post on X on Monday, without giving details. Her last offer of 41 cents per share valued 23andMe at about $11 million US, below its current value of $50 million US, and a far cry from its $6 billion US peak in 2021.

23andMe secured a financing commitment of about $35 million US on Sunday and will continue to operate during the sale process. It did not say if it had other buyout offers or interest.

It listed assets and estimated liabilities between $100 million US and $500 million US.