23andMe (ME-57.85%) on Sunday filed for bankruptcy protection after struggling to combat weak demand for its DNA testing kit and the fallout of a data breach that effected millions of customers.
The San Francisco-based biotechnology firm said it had entered Chapter 11 proceedings in the U.S. Bankruptcy Court for the Eastern District of Missouri to facilitate a sale. It plans to continue operating through the proceedings.
The filing marks the latest downward turn for 23andMe, which went public in 2021 through a merger with billionaire Richard Branson’s SPAC in a deal that valued it at $3.5 billion. The company’s stock fell 44% to 79 cents per share on the news.
CEO Anne Wojcicki, who co-founded the company 19 years ago, said she would resign to help with the sale. She will be replaced by CFO Joe Selsavage in the interim.
Wojcicki’s own bids to take over the company were rejected on multiple occasions. Earlier this month, she offered to take the company private at 41 cents per share.
“There is no doubt that the challenges faced by 23andMe through an evolving business model have been real, but my belief in the company and its future is unwavering,” Wojckiki said in a statement published on social media.
“If I am fortunate enough to secure the company’s assets through the restructuring process, I remain committed to our long-term vision of being a global leader in genetics and establishing genetics as a fundamental part of healthcare ecosystems worldwide,” Wojcicki added.
The company was dealt a major blow by a five-month data breach in 2023 that exposed the personal data of almost seven million customers. 23andMe laid off hundreds of employees, stopped developing all therapies, and agreed to a $30 million settlement over the data breach in late 2024.
23AndMe’s primary product, a DNA testing kit that generated details of a person’s ancestry, failed to retain customers due to the one-and-done nature of the business. However, the company still managed to reach more than 15 million customers since 2006. Eighty-five percent of those people allowed 23andMe to use their data for research.
In a statement, 23andMe said there would be no changes to how it stores, manages, or protects customer data. California Attorney General Rob Bonta on Friday warned residents that they may want to invoke their state’s right to direct the company to delete their data, given the company’s financial issues.
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