Once worth $6 billion, 23 and me The company has lost 98% of its market value and is on the verge of delisting from Nasdaq after all independent board members resigned in September. So what happened?
Founded in 2006, 23andMe is committed to revolutionizing the once unique genetic testing business through a direct-to-consumer model. Thanks to funding from high-profile backers and celebrity endorsements, the company is able to sell its test kits at affordable prices.
Unlike competitors such as Ancestry.com, 23andMe seeks to leverage its database for drug discovery. The company went public in 2021 and is valued at about $3.5 billion. The funding enables 23andMe to grow its drug research team and spearhead partnerships with pharmaceutical companies.
“We’re really at a point where we’re ready to explode,” 23andMe CEO Anne Wojcicki told CNBC in 2021. “There’s a huge opportunity in therapeutics and there’s a huge opportunity in our consumer business.”
Shortly after listing on the Nasdaq, rising interest rates made financing more difficult and sales began to decline. The company launched a Premium Subscription Products in 2020 The company hoped to make up for the lack of recurring revenue from its test kits, but the strategy failed. The company reported Net loss $312 million In fiscal year 2023, by September 2023, 23andMe’s stock price fell below $1.
In addition to the financial issues surrounding 23andMe, privacy issues The genetic databases of companies around the world are also constantly improving. October 2023, Hackers obtained this information Nearly 7 million customers.
When CNBC asked what would happen to 23andMe’s database if the company was sold or taken private, a company spokesperson said Wojcicki has publicly stated her intention to take the company private and would not consider third-party acquisition offers.
“Anne has also expressed her strong commitment to customer privacy and pledged to maintain the company’s current privacy policies, including beyond the expected completion of the acquisition she is pursuing,” a spokesperson said in an email.
Wojcicki submitted a proposal to take the company private in July, but it was rejected by a special committee of company directors because it did not provide a premium over the closing price of 40 cents a share at the time.
23andMe’s independent directors resigned in September, saying they were frustrated by Wojcicki’s “strategic differences” in the company’s vision.
Now, 23andMe faces a Nov. 4 deadline to keep its stock price above $1 and find new board members to remain listed on Nasdaq. Watch the video above to learn more.
About The Author
