Human genetics and biotechnology company 23andMe has filed for Chapter 11 proceedings in the U.S. Bankruptcy Court for the Eastern District of Missouri to facilitate a sales process.
In a press release, the company said it intends to continue operating its business throughout the sales process and no changes will be made to the way the company will store, manage or protect customer data.
Anne Wojcicki is resigning from her role as CEO, and Joe Selsavage, chief financial and accounting officer, has been named interim CEO by the board. Wojcicki will continue to serve as a board member.
“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,” Mark Jensen, chair and member of the special committee of the board of directors, said in a statement.
The commencement of the bankruptcy proceedings comes in the wake of the rejection by the special committee of the final non-bidding acquisition proposals made by Wojcicki and her affiliates on March 10.
In a Linkedin post, Wojcicki said: “While I am disappointed that we have come to this conclusion and my bid was rejected, I am supportive of the company and I intend to be a bidder. I have resigned as CEO of the company so I can be in the best position to pursue the company as an independent bidder.
“Nineteen years ago, when I co-founded 23andMe, the direct to consumer industry did not exist and most people had no idea why they would ever want to see their genome,” she said. “So much has changed. There is now a thriving direct to consumer industry and over 15 million people are now 23andMe customers.”
THE LARGER TREND
Following the announcement of the bankruptcy, California Attorney General Rob Bonta issued a consumer alert.
“California has robust privacy laws that allow consumers to take control and request that a company delete their genetic data,” Bonta said in a statement.
“Given 23andMe’s reported financial distress, I remind Californians to consider invoking their rights and directing 23andMe to delete their data and destroy any samples of genetic material held by the company.”
23andMe went public through a Special Purpose Acquisition Company (SPAC) backed by Richard Branson in 2021. Its stock (NASDAQ: ME) reached a high of $320.80 per share in 2021 and is currently trading at $0.90 per share.
In 2022, biotech company GSK extended its drug discovery partnership with 23andMe that lasted until July 2023. The collaboration began in 2018 when GSK provided $300 million to 23andMe.
That same year, 23andMe scored FDA 510(k) clearance for a test to detect a hereditary marker for prostate cancer. The risk report provides information on whether users have the G84E mutation in the HOXB13 gene, which studies have shown can increase a person’s risk of developing prostate cancer.
In 2019, Erin Trimple of 23andMe sat down with HIMSSTV to discuss how the company was shaping new trends in personalized care and how to use genetic information to improve health and the importance of equipping primary care providers to talk with their patients about genetics.
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