DNA testing company 23andMe Holding Co. has filed for Chapter 11 bankruptcy after it was unable to find a buyer to avoid insolvency proceedings and its Co-founder and Chief Executive Officer Anne Wojcicki resigned.
On Sunday, San Francisco-based company announced that it will look to sell “substantially all of its assets” through a court-approved reorganization plan.
23andMe, founded nearly two decades ago, has faced an uncertain future for some time. Beyond battles to go private, it has struggled to find a profitable business model since going public in 2021.
According to court documents, the firm will continue marketing itself to investors with the goal of getting at least one binding offer by May 7.
The deadline was fixed by lenders, who are seeking court approval to loan 23andMe as much as $35 million from JMB Capital Partners to fund its bankruptcy.
The debt carries a 14% interest rate and would pay a 2% commitment fee, a 6% exit fee and a $100,000 work fee, if approved.
“We expect the court-supervised process will advance our efforts to address the operational and financial challenges we face, including further cost reductions and the resolution of legal and leasehold liabilities,” said Mark Jensen, chair and member of the Special Committee of the Board of Directors.
In a statement, 23andMe said the Chapter 11 filing in St. Louis will also resolve its legal troubles related to a data breach.
The company also said it plans to continue operating throughout the sales process.
In 2021, the DNA testing company was valued at $3.5 billion when it went public.
It has $277.4 million in assets and $214.7 million in liabilities, as per court documents.
Wojcicki is resigning from her role as CEO but will continue to serve on the board. Joe Selsavage has been appointed as interim CEO.
Saliva-based DNA testing
The company became known for its saliva-based DNA testing kits — purchased by millions of customers eager to learn more about their ancestry — and later dived further into health research and drug development.
Last September, all of its independent directors resigned in a rare move following acquisition negotiations with Wojcicki.
In November, the company announced that it would lay off 40% of its workforce, or more than 200 employees, and discontinue its therapeutics division. And in January, the board’s special committee said it was exploring strategic alternatives, including a possible sale.
Shares of 23andMe Holding Co. have shed nearly all their value since last spring — and plunged even farther after Sunday’s bankruptcy filing, trading at under $1 as of midday Monday.
