Once Valued At Billions, 23andMe's CEO Considers Privatization To Secure Company's Future

Anne Wojcicki, co-founder and chief executive of 23andMe Holding Co ME, is contemplating taking the genetics testing company private. 

This potential move comes after a tumultuous three years in public markets that witnessed a significant decline in the company’s valuation, once at $6 billion.

Founded in 2006, 23andMe went public in 2021 via a merger with a special purpose acquisition company, a deal that valued 23andMe at around $3.5 billion.

The SEC filing disclosed Wojcicki’s collaboration with advisers to explore a potential deal, expressing her intention to engage with prospective partners and financing sources. 

Wojcicki, the former spouse of Google founder Sergey Brin, emphasized her opposition to any other buyer acquiring the company. 

Ms. Wojcicki currently owns shares constituting more than 20% of the total outstanding shares and entitling her to approximately 49% of the voting power of the total outstanding shares.

23andMe reported revenue of $44.7 million in the third quarter of fiscal 2024, down 33% Y/Y due to lower research revenue after the conclusion of the GSK Plc GSK collaboration exclusivity term in July 2023 and lower PGS kit volumes.

Net loss for FY24 Q3 was $278 million, compared to a net loss of $92 million for the same period in the prior year.

23andMe ended Dec. 31, 2023, with cash and cash equivalents of $242 million.

Also Read: 23andMe Under Siege: Hacker Reportedly Steals Millions Of Profiles In Genetic Data Heist.

The decline in its stock value reflects the numerous challenges 23andMe faces, the Wall Street Journal notes. 

Despite its DNA tests losing popularity and money, the company attempted to generate recurring revenue through subscriptions but fell short because customers only needed the test once. 

CEO Wojcicki shifted focus to drug development, aiming to leverage the DNA database for pharmaceutical discoveries. 

However, this field requires substantial investment and patience, with results potentially taking a decade. With cash reserves expected to last until 2025, the company is considering going private to secure more funding and flexibility to bring potential drug candidates to market.

In January, 23andMe came under fire in a class action lawsuit, accused of inadequately protecting the privacy of nearly 7 million customers whose personal information was compromised in a data breach last year. 

The lawsuit alleges that the company failed to notify customers with Chinese and Ashkenazi Jewish heritage about being specifically targeted.

Read Next: SoftBank-Backed Genetic Testing Invitae’s Descent from $7B Valuation to Near-Bankruptcy.

Price Action: ME shares are up 50.1% at $0.53 at last check Thursday.