23andMe has filed for Chapter 11 bankruptcy protection, marking a significant development in the company’s ongoing efforts to cut costs. The genetic testing company announced that it will seek to sell substantially all of its assets through a court-approved reorganization plan.
Anne Wojcicki, the co-founder and CEO, resigned effective immediately but will remain on the company’s board. Her resignation follows the rejection of a nonbinding acquisition proposal she made to the board a few weeks ago.
Shares of 23andMe Holding Co. have plummeted below $1 in premarket trading, reflecting the company’s struggles since last spring. The decision to file for voluntary bankruptcy comes after months of turmoil, including the resignation of all independent directors last September and an announcement in November about laying off 40% of its workforce, or more than 200 employees, alongside discontinuing its therapeutics division.
In January, the board’s special committee began exploring strategic alternatives, including a possible sale. Board Chair Mark Jensen stated that a court-supervised sale represents the best path forward to maximize business value while helping to cut costs and resolve legal and leasehold liabilities.
Jensen emphasized the company’s commitment to safeguarding customer data and maintaining transparency regarding user data management. Data privacy will remain a critical consideration in any potential transaction.
Despite the bankruptcy filing, 23andMe plans to continue its operations with $35 million in debtor-in-possession financing from JMB Capital Partners. — news from The Associated Press