In this article, embattled genetic testing company 23andMe announced on Tuesday that it is once again exploring strategic alternatives, which may involve selling the company or its assets, restructuring, or a business combination. The company’s stock, which plummeted by 82% last year, dropped by 10% in extended trading and was briefly halted.
This announcement coincided with the release of 23andMe’s third-quarter results, revealing an 8% decrease in revenue in the consumer services business, from $42.9 million to $39.6 million compared to the same period last year. The company stated that it will require additional liquidity to support its operations and is seeking to raise capital.
In the earnings release on Tuesday, 23andMe expressed that “Management has determined that there is substantial doubt about the Company’s ability to continue as a going concern.” CEO Anne Wojcicki has been working to sustain the company, which is now valued at less than $100 million, a significant drop from its peak value of $6 billion.
In March, independent directors of 23andMe established a special committee to assess the company’s potential future directions. Despite Wojcicki’s proposal to take the company private in July, it was turned down due to insufficient committed financing and the absence of a premium to the closing share price at that time, as stated by the committee.
Subsequently, all independent directors resigned from 23andMe’s board, citing disagreements with Wojcicki regarding the company’s strategic direction. Wojcicki has since appointed three new independent directors and announced plans to reduce the workforce by 40% and close the therapeutics business as part of a restructuring strategy.
On Tuesday, 23andMe disclosed that the special committee will once again oversee the exploration of strategic alternatives. The committee has engaged Moelis & Company as its financial advisor and Goodwin Procter as its legal advisor. However, the committee emphasized that there is no assurance that a deal will be finalized. While Wojcicki has expressed her interest in privatizing the company, it remains uncertain if she will submit another proposal to that effect.
23andMe declined to provide any comments on the matter.
