Former unicorn 23andMe files for bankruptcy, shares plunge

Shares of genetic testing service 23andMe have plummeted more than 50% today, March 24, hitting an all-time low. The company, a pioneer in direct-to-consumer genetic testing, has filed for bankruptcy after multiple failed attempts to go private.

Today, 23andMe shares crashed nearly 53% to $0.85 per share — marking their lowest price ever and the first time the stock has fallen below $1 per share. A day earlier, the company announced that it had filed for Chapter 11 bankruptcy protection in a U.S. court. This will allow the business to restructure itself instead of liquidating.

“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,” said Mark Jensen, chairman of the board and special committee member.

Additionally, 23andMe cofounder Anne Wojcicki will step down as CEO. CFO Joe Selsavage will take her place on an interim basis.

If the court approves the Chapter 11 filing, 23andMe will have 45 days to solicit bids for its assets with the help of an independent investment banker. If multiple bids are received, an auction will be held to maximize asset value, the company explained.

According to Bloomberg, citing the bankruptcy filing, 23andMe has $277.4 million in assets and $214.7 million in liabilities. For liquidity, the company has secured up to $35 million in so-called debtor-in-possession financing — a special loan for bankrupt businesses seeking to restructure — from investment bank JMB Capital Partners.

“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 wrote on X (formerly Twitter).

23andMe was founded in 2006 by Wojcicki and geneticist Linda Avey with the goal of making genetic testing accessible to a broader audience. Early investors included Google cofounder Sergey Brin (Wojcicki’s then-husband), Google’s venture fund, and investor Yuri Milner, known for backing Facebook and Spotify.

The company’s growth proved slower than expected. Initially, high test prices ($399 for a test) limited consumer interest, though subsequent fund raises allowed prices to drop to $99 a test. Later, regulatory hurdles emerged when the FDA required additional studies to ensure the accuracy of 23andMe’s gene-based health reports.

Wojcicki took 23andMe public on the Nasdaq in 2021, with the company’s valuation peaking at $6 billion. At the time, Forbes valued it at $1.3 billion but cautioned that 23andMe was “drowning in red ink.” The company’s long-term success, the publication noted, would likely depend on its ability to pivot from genetic testing to drug development. By then, 23andMe had secured agreements for pharma giants GSK of the UK and Almirall of Spain to use its genetics database for drug development. Shortly after its IPO, 23andMe also acquired digital healthcare provider Lemonaid Health for $400 million.

However, this failed to reverse the company’s financial struggles. Losses mounted, and its market capitalization continued to decline. By 2023, 23andMe had begun laying off employees.

In 2024, Wojcicki made her first attempt to take the company private, offering shareholders $0.40 per share. The plan prompted all independent board members to resign in protest.

In autumn 2024, 23andMe announced a new restructuring plan that included cutting 40% of its workforce and shutting down all clinical and preclinical research programs. The company later explored selling Lemonaid Health.

Last month, Wojcicki made a second attempt to take 23andMe private, offering $2.53 per share in partnership with investment firm New Mountain Capital. However, just days later, the offer was withdrawn after New Mountain pulled out.

Wojcicki then made a third offer, this time at $0.41 per share, which was immediately rejected by 23andMe’s special committee.

According to MarketWatch, 23andMe currently has two ratings: one “sell” and one “buy.” Their average target price stands at $8.40 per share, nearly five times the stock’s last closing price.