The pioneering American genetic-testing firm 23andMe has declared bankruptcy and is seeking a potential purchaser following a data breach two years ago that exposed information from millions of user profiles.
23andMe, a company offering a mail-in saliva test to identify ancestry or specific health-linked genetic characteristics for under $200, announced on Sunday that they have “submitted a voluntary request for restructuring” to a state bankruptcy court in Missouri.
In its peak a few years back, the frenzy over DNA testing witnessed countless consumers eagerly purchasing kits to uncover their ancestral and health-related details, with 23andMe tests even turning into sought-after presents during holidays.
The firm based in Silicon Valley, which made its debut on the stock market in 2021, boasts 15 million clients and has experienced a drop in revenues over recent months due to waning interest in testing and a security incident involving sensitive information leakage.
23andMe announced that they turned down a buyout proposal from their founder and CEO, Anne Wojcicki, who has stepped down from her role but will continue serving as a member of the company’s board of directors, as stated in the release.
On X, Wojcicki shared that “Although I am disappointed with the outcome and my offer was declined, I support the company and still plan to remain a potential bidder.”
She stated that her decision to step down from her role as CEO was part of a strategy aimed at positioning herself “to lead the charge for acquiring the firm independently.”
Wojcicki, who established 23andMe 19 years ago along with others, recognized the difficulties faced by the firm yet expressed her steadfast confidence in its prospects.
In November, faced with challenges, 23andMe announced the termination of approximately 40% of its workforce, which amounts to around 200 employees. Additionally, the company halted its research initiatives.
In an official document submitted to regulators, 23andMe stated that they have committed to paying around $37.5 million as part of the settlement for allegations connected with the 2023 data breach.
In the 2023 hacking incident, approximately 6.9 million user accounts were compromised, with about 5.5 million of those containing data related to genetic matching.
With previous passwords of customers, the hackers were able to access data encompassing their names, gender, birth year, locations, pictures, health details, and outcomes from genetic ancestry tests.
Following the bankruptcy declaration, Geoffrey Fowler—a tech columnist at the Washington Post—cautioned: “If you’re among the 15 million individuals who have submitted your genetic information to 23andMe, now might be the right moment to remove your data.”
He pointed out the danger “that your information might be sold or moved to another corporation, which could intend to utilize it for different objectives.”
The firm’s stock value dropped by almost 50 percent to reach 92 cents during Monday’s trading session on Wall Street.
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Genetic Testing Company 23andMe Files for Bankruptcy
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