Once valued at $6 billion, 23andMe has experienced a drastic 98% decline in its value and is at risk of being delisted from the Nasdaq following the resignation of all its independent board members in September. The company, established in 2006, aimed to transform the genetic testing industry by introducing a direct-to-consumer approach, challenging the exclusivity of the field. With support from prominent investors and celebrity endorsements, 23andMe was able to offer its test kits at competitive prices.
Diverging from competitors like Ancestry.com, 23andMe focused on utilizing its database for drug discovery. Going public in 2021 with a valuation of approximately $3.5 billion, the company used the funding to enhance its drug research team and establish collaborations with pharmaceutical firms. CEO Anne Wojcicki expressed optimism about the potential in therapeutics and the consumer sector during an interview with CNBC in 2021.
Following its Nasdaq debut, 23andMe encountered challenges due to increasing interest rates, leading to funding difficulties and a decline in sales. Despite introducing a premium subscription product in 2020 to offset the diminishing revenue from test kits, the strategy did not yield the expected results. By the end of the 2023 fiscal year, the company reported a net loss of $312 million, and by September 2023, its share price had dropped below $1.
In addition to financial issues, concerns regarding privacy surrounding 23andMe’s genetic database have escalated. In October 2023, hackers breached the data of nearly 7 million customers. When questioned by CNBC about the fate of the database in case of a sale or privatization, a company representative stated that Wojcicki intended to privatize the company and was not considering external acquisition offers, emphasizing her commitment to customer privacy.
Despite Wojcicki’s proposal to take the company private in July, which was rejected by a special committee due to its failure to offer a premium above the closing price of 40 cents per share at the time, the independent directors of 23andMe resigned in September, citing disagreements with Wojcicki’s strategic direction for the company.
Currently, 23andMe must maintain its share price above $1 and appoint new board members by the November 4 deadline to retain its listing on the Nasdaq.
