From Founder to Bidder: 23andMe CEO Resigns As Genetics Company Files for Bankruptcy
23andMe co-founder Anne Wojcicki is stepping down as CEO—but not stepping away. She plans to pursue the company as an independent bidder
23andMe has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Eastern District of Missouri, initiating a sales process during which the company says it will continue operating as usual, with no changes to how it stores, manages or protects customer data.
The biotech and genetics company’s co-founder and CEO, Anne Wojcicki, is also exiting from her leadership role effective immediately but will remain a member of the board.
The 23andMe special committee recently rejected an acquisition proposal from Wojcicki. Last September, all seven of 23andMe’s board of directors collectively resigned, citing differences over the company’s “strategic direction” after Wojcicki signaled interest in taking 23andMe private.
She acknowledged the bankruptcy news on social media, writing that while she is disappointed in the special committee’s decision to take 23andMe through the Chapter 11 process after her bid was rejected, she remains supportive of the company—and isn’t giving up.
“I have resigned as CEO of the company so I can be in the best position to pursue the company as an independent bidder,” she confirmed in a post on LinkedIn.
“We have had many successes, but I equally take accountability for the challenges we have today,” Wojcicki, who co-founded the company in 2006, continued. “There is no doubt that the challenges faced by 23andMe through an evolving business model have been real, but my belief in the company and its future is unwavering. Consumers are rising up and asking for more control over their health and want greater knowledge about how to be healthy and why they may have health issues.”
The company has made a name for itself in terms of accessible DNA testing that unlocks ancestry information as well as personalized health insights.
“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 and establishing genetics as a fundamental part of healthcare ecosystems worldwide,” Wojcicki added.
In the meantime, Joseph Selsavage, 23andMe’s chief financial and accounting officer, will serve as interim CEO. Matt Kvarda, a managing director at Alvarez & Marsal, has been appointed chief restructuring officer.
If approved by the court, 23andMe and an independent investment banker will solicit qualified bids over a 45-day process. Should there be multiple qualified bids submitted during the court-supervised sale process, 23andMe plans to conduct an auction. 23andMe confirms it has filed customary motions with the court seeking a variety of “first-day” relief, including paying employee wages and benefits and compensating certain vendors and suppliers on a go-forward basis. A motion has also been filed seeking approval to reject numerous contracts, including real estate leases in Sunnyvale and San Francisco.
The company says all proceedings will be directed to resolve its outstanding legal liabilities stemming from its October 2023 cyber incident, where the data of roughly 6.9 million people was accessed by hackers, according to TechCrunch. 23andMe subsequently settled a $30 million lawsuit last fall related to the data breach.
The biotech and genetics company says it’s received a commitment for debtor-in-possession financing of up to $35 million from JMB Capital Partners, which, subject to court approval, is expected to support 23andMe during the Chapter 11 process.
Mark Jensen, 23andMe’s chair and member of the special committee of the board of directors, noted that the decision came after a “thorough evaluation of strategic alternatives” and that a court-supervised sale process is “the best path forward.”
“We expect the court-supervised process will advance our efforts to address the operational and financial challenges we face, including further cost reductions and the resolution of legal and leasehold liabilities,” Jensen said. “We believe in the value of our people and our assets and hope that this process allows our mission of helping people access, understand and benefit from the human genome to live on for the benefit of customers and patients.”
Last November, the California-based 23andMe announced it would reduce its workforce by 40% (impacting more than 200 employees) and sunset its therapeutics programs to streamline operations and reduce costs.
The uncertainty of 23andMe’s future and its ongoing financial woes prompted California Attorney General Rob Bonta to issue a consumer alert to 23andMe customers, reminding them that they can direct the biotech company to remove and destroy their personal information.
“California has robust privacy laws that allow consumers to take control and request that a company delete their genetic data,” Bonta said in a release that included instructions for customers. “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.”