23andMe considers business sale amidst financial struggles

23andMe considers business sale amidst financial struggles

USA – 23andMe, a genetic testing specialist, has initiated a strategic review that could lead to the sale of the company.

The board has set up a committee to explore several options, including “a possible sale of the company, business combination, sale of all or part of the company’s assets, licensing of assets, restructuring, or other strategic actions,” according to a statement.

This decision follows recent announcements from the company, including significant job cuts affecting approximately 40% of its workforce and its exit from the drug discovery and development sector.

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These moves aim to reduce annual costs by US $35 million, allowing 23andMe to refocus on its core business: saliva-based genetic testing for health and ancestry, partnerships with biopharma companies for drug discovery, and an online health operation that grew following its acquisition of telehealth firm Lemonaid in 2021.

Rumors surfaced last week that 23andMe might consider selling Lemonaid, which now appears less aligned with the company’s main objectives.

Over recent years, the company has seen its revenue growth stagnate, with a 33% decline in the third quarter of 2024 to US $44.7 million.

This decline is partly due to the one-time nature of genetic testing sales and the unpredictable timing of revenues from its R&D partnerships with companies like GSK and Mirador Therapeutics.

In 2024, 23andMe founder and CEO Anne Wojcicki proposed taking the company private by purchasing the shares she did not already own at US $0.40 per share.

However, this bid was rejected by a special committee of the board, with former independent directors expressing frustration over Wojcicki’s failure to present a “fully financed, fully diligenced, actionable proposal” that would benefit non-affiliated shareholders.

Despite this, the board emphasized that there is “no assurance” that exploring strategic alternatives will lead to any agreements or transactions.

Currently, 23andMe’s shares are valued at around US $3.40, giving the company a market capitalization of just under US $82 million, a significant drop from its US $3.5 billion valuation when it went public via a merger with a SPAC in 2021.