23andMe, the once high-flying American genetic testing company, has declared bankruptcy. This action represents a stunning reversal of fortune for a company that just two years ago was valued at $6 billion. The company has initiated voluntary Chapter 11 reorganization proceedings in the US Bankruptcy Court for the Eastern District of Missouri. This step is intended to initiate a sale process that will create the most business value.
The company is best known for its consumer-facing home DNA test kits. Its worth has nosedived in recent years due to dramatically decreased orders and a catastrophic data breach in 2023. The breach concerned nearly half of 23andMe’s more than 15 million consumers. Many are deeply concerned with the safety of the genetic information that this company stores, especially after this incident.
The aftermath of the breach led California Attorney General Rob Bonta to release an AG consumer alert, last Friday.
"California has robust privacy laws that allow consumers to take control and request that a company delete their genetic data," stated Rob Bonta.
With mounting worries about data privacy and security, he called upon Californians to be active. 23andMe customers should claim their rights under the relevant laws governing their personal data.
"Given 23andMe's reported financial distress, I remind Californians to consider invoking their rights and directing 23andMe to delete their data and destroy any samples of genetic material held by the company," added Bonta.
As one move in the restructuring process, 23andMe’s co-founder Anne Wojcicki has resigned as CEO of the company. Joe Selsavage, the company’s chief financial officer, will take over as interim chief executive. Mark Jensen, chair of 23andMe’s board, hailed the bankruptcy filing as a strategic maneuver. His objectives include making the business saleable and increasing value.
In November, the company took the painful step of laying off around 200 staff members. This action affected about 40% of its workforce and was a response to deepening financial woes. On the heels of those missteps, it would be easy to write off Anne Wojcicki’s optimism about the company’s future.
"If I am fortunate enough to secure the company's assets through the restructuring process, I remain committed to our long-term vision of being a global leader in genetics," Wojcicki stated on X.
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