DNA screening company 23andMe declare personal bankruptcy as need runs out

By Bhanvi Satija, Anusha Shah and Surbhi Misra

(Reuters) -23 andMe on Sunday applied for personal bankruptcy in the united state after fighting with weak need for its origins screening packages and a 2023 information violation that harmed its track record.

The business’s shares dropped 50% to 88 cents in Monday trading after founder Anne Wojcicki, that made several stopped working requisition quotes, surrendered as chief executive officer. 23andMe did not claim whether there are various other interested prospective buyers. It will certainly remain to run throughout the sale procedure, having actually protected $35 million in funding over the weekend break.

Officials, consisting of California Attorney General Rob Bonta, had actually doubted what would certainly occur to the hereditary information gathered by 23andMe, though the business’s personal privacy plans claim that the information might be marketed to various other companies. The business stated the personal bankruptcy procedure will certainly not influence just how it shops, handles or safeguards client information.

23andMe amassed great deals of interest from capitalists when it was very first taken public by means of a special-purpose purchase automobile (SPAC) run by billionaire Richard Branson at a $3.5 billion evaluation in 2021. Its market price came to a head later on that year at virtually $6 billion because of thriving rate of interest in DNA screening packages however need has actually wound down because, harming 23andMe and its Blackstone- possessed competing AncestryDNA.

Sales of the customer packages often grabbed throughout the holiday, however 23andMe has actually had a hard time to maintain clients generally since individuals would certainly utilize the packages as soon as and see little factor to get an additional one. Bernstein experts have actually stated that the marketplace for origins screening packages may be near to touched out.

In 2023, cyberpunks revealed the individual information of virtually 7 million 23andMe clients over a five-month duration, dealing a significant impact to the business’s track record and worsening its development issues. The violation elevated alarm system amongst clients worried regarding their personal privacy and just how DNA-testing companies manage their information.

23andMe ultimately concurred late in 2015 to a $30 million negotiation in a claim pertaining to the violation.

The San Francisco- based company has actually likewise given up 200 workers and quit the growth of all treatments as component of what will certainly be a significant overhaul.

Wojcicki has actually been promoting an acquistion because last April, however has actually been rejected by 23andMe’s board. She supposedly utilized her calls, consisting of ex-husband and Google founder Sergey Brin, to assist drive preliminary financial investments. She will certainly be changed by Chief Financial Officer Joe Selsavage on an acting basis.

Wojcicki stated, in a message on X on Monday, that she means to make an additional proposal, without offering information. Her last deal of 41 cents per share valued 23andMe at regarding $11 million.