23andMe, a genetic testing company based in San Francisco, has filed for Chapter 11 bankruptcy protection in an effort to cut costs.
Co-founder and CEO Anne Wojcicki has resigned from her position, effective immediately, although she will continue to serve on the company’s board.
The big picture: The company plans to sell “substantially all of its assets” through a court-approved reorganization plan.
- Shares of 23andMe Holding Co. have significantly declined in value, dropping below $1 in premarket trading.
Driving the news: The bankruptcy filing follows a period of turmoil for the company, which has struggled to find a profitable business model since going public in 2021.
- Previous challenges included the resignation of all independent directors in September, a decision to lay off 40% of its workforce in November and the discontinuation of its therapeutics division.
- In January, the company’s board special committee began exploring strategic alternatives, including a possible sale.
What they’re saying: Board Chair Mark Jensen stated that a court-supervised sale was deemed the best approach to maximize the business’s value, cut costs and address legal and leasehold liabilities.
- “We are committed to continuing to safeguard customer data and being transparent about the management of user data going forward, and data privacy will be an important consideration in any potential transaction,” Jensen said.
What we’re watching: Despite the bankruptcy, 23andMe plans to continue its operations and has secured $35 million in debtor-in-possession financing from JMB Capital Partners.
