Genetic testing company 23andMe filed for Chapter 11 bankruptcy protection to help the $50 million company sell itself, the company announced Sunday.
23andMe’s saliva-based kits have been helping customers learn about their ancestry since 2006, and the company said it will continue operating while the bankruptcy court facilitates the sale process.
News of the move raised concerns about how the personal data of millions of 23andMe customers will be handled.
California Attorney General Rob Bonta issued a “consumer alert” regarding the “trove of sensitive consumer data 23andMe has amassed,” reminding Californians that they have the right to direct the company to delete their genetic data, destroy their test samples and revoke permission for genetic data to be used for research.
“There are no changes to the way the Company stores, manages, or protects customer data,” 23andMe said in a media release.
THIS IS WHAT NO ONE PLANNED COULD HAPPEN AFTER TAKING A DNA TEST
The company has experienced tumult in recent years. Last November, 23andMe said that it was cutting its headcount by 40%, or more than 200 employees.
Co-founder and CEO Anne Wojcicki has resigned after multiple failed takeover bids, Reuters reports, but she said on X that she did it “so I can be in the best position to pursue the company as an independent bidder.”
23ANDME CUTS 40% OF ITS WORKFORCE
Wojcicki will be replaced by CFO Joe Selsavage on an interim basis.
23andMe said it secured a debtor-in-possession (DIP) financing commitment for about $35 million and expects to continue operating during the sale process. It did not say if it had any other buyout interest or offers.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| ME | 23ANDME HOLDING CO | 0.95 | -0.84 | -46.93% |
It listed both assets and estimated liabilities of $100 million to $500 million.
A month before its restructuring, 23andMe agreed to pay $30 million and give three years of security monitoring to settle a lawsuit accusing it of failing to protect the privacy of 6.9 million customers whose personal information was exposed in a data breach in 2023.
“We want to thank our employees for their dedication to 23andMe’s mission,” Mark Jensen, Chair and member of the Special Committee of the Board of Directors, said in a statement. “We are committed to supporting them as we move through the process.”
“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 said.
FOX Business’ Aislinn Murphy and Reuters contributed to this report.
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