DNA testing kit firm 23andMe files for bankruptcy protection
DNA testing company 23andMe has filed for bankruptcy protection in the US while it searches for a buyer, after struggling with heavy losses and facing the aftermath of a data hack.
The genetics company also announced the immediate resignation of its chief executive and co-founder Anne Wojcicki.
Founded in 2006, California-based 23andMe analyses its customers’ DNA through home saliva collection kits to produce personalised genetic reports on health and ancestry.
It has sold more than 12 million DNA testing kits, according to the company’s website, operating in markets including the US, the UK, Canada, and Europe.
23andMe said it had kickstarted voluntary Chapter 11 proceedings in the US – meaning it intends to reorganise its debts and assets to have a fresh start, while remaining in business.
It will also see the company put itself up for sale.
The resignation of Ms Wojcicki is “effective immediately”, by mutual agreement, according to the group.
In a post to social media platform X, formerly Twitter, Ms Wojcicki said she was “disappointed” by the bankruptcy plan but that she had resigned as chief executive so she could “be in the best position to pursue the company as an independent bidder”.
Chairman Mark Jensen said: “After a thorough evaluation of strategic alternatives, we have determined that a court-supervised sale process is the best path forward to maximise the value of the business.”
He said the process would help the firm address “operational and financial challenges” including through further cost-cutting and resolving legal liabilities.
“In addition, we are committed to continuing to safeguard customer data and being transparent about the management of user data going forward, and data privacy will be an important consideration in any potential transaction,” he stressed.
The firm reported a loss before income tax of more than 128 million dollars (£98.8 million) in its latest financial results, covering April to December 2024.
It said lower kit sales and a decline in average selling prices were partly behind a drop in revenues.
In a statement, the company said: “The company intends to continue operating its business in the ordinary course throughout the sale process. There are no changes to the way the company stores, manages, or protects customer data.”
The company has filed customary motions with the Court seeking a variety of “first-day” relief, including the authority to pay employee wages and benefits and compensate certain vendors and suppliers on a go-forward basis.
The statement added: “In addition, 23andMe intends to use the proceedings to resolve all outstanding legal liabilities stemming from the previously disclosed October 2023 cyber incident.”