23andMe announced that it has filed for Chapter 11 bankruptcy protection in the United States. This change represents a turning point for the genetic testing company. This filing is intended to facilitate a quick sale of the company. Its current value is just $11 million, a far cry from the $3.5 billion market capitalization it had when it went public in 2021. In another twist, 23andMe’s co-founder and CEO, Anne Wojcicki, has announced her resignation from that post.
The Chapter 11 filing follows closely after a $500 million legal settlement. The company will pay the $30 million to settle a class-action lawsuit over a massive data breach. The unprecedented incident put the personal information of 6.9 million customers at risk. In addition to monetary damages to settle the breach, 23andMe will offer three years of security monitoring services to people affected by 23andMe's security breach.
"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," stated Chair Mark Jensen.
In an effort to maintain operations during the sale process, 23andMe has secured a debtor-in-possession (DIP) financing commitment of about $35 million. This funding – alongside other strategic support – will allow the company to keep operating as it works through the intricacies of Chapter 11 proceedings.
As part of a broader restructuring initiative, 23andMe has implemented significant workforce reductions, cutting approximately 40% of its employees, or around 200 positions. The company has announced a pause on the advancement of all therapeutic assets. This decision further streamlines their operations and allows them to double down on their core offering.
Even after repeated buyout overtures from Anne Wojcicki, 23andMe’s board has chosen to follow this bizarre path of least… well, you know the rest. The statement comes on the heels of news that the firm has declared bankruptcy. In its bankruptcy filing, it listed assets and liabilities both between $100 million and $500 million.