Genetic testing firm 23andMe files for bankruptcy

Attendees visit the 23andMe booth at the RootsTech annual genealogical event in Salt Lake City, Utah, on February 28, 2019. (George Frey/Reuters via CNN Newsource)

Gene testing firm 23andMe said on Sunday it had filed for Chapter 11 bankruptcy protection in order to facilitate its sale, after years of struggling to find a sustainable business model.

In a statement announcing the bankruptcy, the firm said its CEO, Anne Wojcicki, had resigned effective immediately. She will remain on the company’s board of directors.

“After a thorough evaluation of strategic alternatives, we have determined that a court-supervised sale process is the best path forward to maximize the value of the business,” Mark Jensen, chair and member of the Special Committee of the board of directors, said in the statement.

Late last year, the company said it was cutting about 40% of its workforce - around 200 employees - and discontinuing further development of all its therapies as part of a restructuring program, according to Reuters.

In September, all seven of the company’s independent directors resigned en masse, citing their frustration with the CEO’s “strategic direction” and efforts to take 23andMe private.

The company, which went public in 2021, had never made a profit. The stock shot up following the listing, briefly valuing the company at $6 billion. Wojcicki, who owned 49% of the company, became a billionaire.

Its core product, an at-home DNA testing kit, offers “personalized genetic insights” that the company says can flag potential health risks such as one’s likelihood of developing Alzheimers or certain cancers.

23andMe tried to convert one-time buyers into subscribers with the promise of continued feedback and personalized wellness plans but had reportedly fallen short of its goals.