South San Francisco-based genetic testing venture 23andMe saw its shares plunge more than 50% Monday after the company announced it had filed for Chapter 11 bankruptcy protection.
The company announced Sunday it will seek court authorization to sell its assets, calling it “the best path forward to maximize the value of the business,” according to a filing in the U.S. Bankruptcy Court for the Eastern District of Missouri.
Chief Executive Anne Wojcicki will resign but remain on the company’s board, the announcement said.
More than 15 million people have provided 23andMe with DNA samples, representing a trove of genetic information that could be sold in bankruptcy proceedings.
But the company struggled to build a profitable business around DNA testing and its efforts to license data to pharmaceutical companies never caught on.
Valued at $6 billion shortly after going public in 2021, 23andMe gained popularity for offering customers a window into their ancestry and genetic health. The company, however, struggled to gain repeat business, as each customer’s DNA sample needed to be collected only once.
“The often ‘one-time’ nature of sales involving the company’s saliva collection kits resulted in a shrinking customer base and declining topline revenues,” Chief Restructuring Officer Matthew Kvarda told Bloomberg.
The company has $277.4 million in assets and $214.7 million in liabilities, according to court documents.
California Atty. Gen. Rob Bonta issued a warning last week to remind consumers of their right to have their genetic data deleted amid the company’s financial struggles. 23andMe customers can delete their data by logging into their account.
“California has robust privacy laws that allow consumers to take control and request that a company delete their genetic data,” Bonta said. “Given 23andMe’s reported financial distress, I remind Californians to consider invoking their rights and directing 23andMe to … destroy any samples of genetic material held by the company.”
Board of Directors Chair Mark Jensen said in a statement that the company will prioritize the protection of consumer data throughout a sales process. Wojcicki said in a post on X over the weekend that she still aims to buy the company’s assets, but her efforts to take the company private were rejected by a committee this month.
“Data privacy will be an important consideration in any potential transaction,” Jensen said. “We are committed to continuing to safeguard customer data and being transparent about the management of user data going forward.”
In September, all of the company’s independent directors resigned after negotiations with Wojcicki over taking 23andMe private. In November, the company announced it would lay off 40% of its workforce, or more than 200 employees.
23andMe shares closed Monday at 73 cents, down 59%, after Bonta’s warning.
Monday marks the second time 23andMe shares have traded below $1. The company did a reverse, 20-to-1 share split last fall to comply with Nasdaq listing requirements.
