Anne Wojcicki, the co-founder and CEO of 23andMe Inc., recently addressed attendees at the South by Southwest (SXSW) festival in Austin, Texas, on March 10, 2023. The genetic testing company, however, is currently facing significant challenges and has announced that it is once again exploring strategic alternatives, which may include selling the company or its assets, restructuring, or possibly merging with another business.
Following a tumultuous year in which 23andMe’s stock plummeted by 82%, the company’s shares fell an additional 10% in after-hours trading, temporarily halting trading activity. This announcement came alongside the release of 23andMe’s third-quarter financial results, revealing an 8% decline in revenue in its consumer services segment, down to $39.6 million from $42.9 million in the same quarter the previous year. The company stated that it would require “additional liquidity” to sustain its operations and is actively seeking to raise capital.
The earnings report highlighted concerns about 23andMe’s future, with the management acknowledging “substantial doubt” regarding the company’s ability to continue as a viable entity. Wojcicki has been making efforts to stabilize the company, which has seen its market valuation drop from a peak of $6 billion to under $100 million.
In March, a special committee of independent directors was formed to assess the company’s potential strategies for moving forward. Although Wojcicki proposed taking the company private in July, the proposal was declined due to a lack of committed financing and no premium offered over the then-current share price. Subsequently, the independent directors resigned from the board, citing disagreements with Wojcicki over the company’s strategic direction.
In a bid to restructure, Wojcicki has appointed three new independent directors and announced plans to reduce the workforce by 40% while discontinuing its therapeutics division. The special committee will now oversee the search for strategic alternatives once more, engaging Moelis & Company as its financial advisor and Goodwin Procter as its legal counsel. However, the committee has noted that there is no assurance that a deal will materialize. While Wojcicki has shown interest in taking the company private, it remains uncertain whether she will present another proposal. 23andMe has opted not to provide further comments at this time.
