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23andMe Announces Major Layoffs and Reports Revenue Decline Amid Strategic Shift

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On Tuesday, genetic testing company 23andMe reported a revenue decline for its latest fiscal quarter, following its announcement of significant workforce reductions and the closure of its therapeutics division. The company’s revenue for the fiscal second quarter dropped to $44.1 million from $50 million during the same period the previous year. However, 23andMe did report a reduced net loss, down to $59.1 million (or $2.32 per share), compared to a loss of $75.27 million (or $3.17 per share) a year prior.

As part of a restructuring plan, 23andMe revealed on Monday that it would cut 40% of its workforce, impacting over 200 jobs, and wind down all therapeutics programs and ongoing clinical trials. The company is exploring options, including asset sales and licensing agreements, to derive value from its existing therapeutic programs. CEO Anne Wojcicki expressed gratitude to the affected employees and underscored the importance of these steps to refocus on the company’s core consumer services and research collaborations.

The company’s shares have seen significant drops, falling slightly on Tuesday and down roughly 75% for the year. 23andMe has struggled with maintaining its Nasdaq listing, with shares previously below $1 until an October 1-for-20 reverse stock split. In September, all seven independent board members resigned, citing disagreements with Wojcicki regarding the company’s strategic direction. Since then, three new independent directors have joined the board.

Wojcicki has indicated her intention to take 23andMe private, emphasizing that this direction is the most viable for the company’s future. During Tuesday’s earnings call, she stated that the company had taken steps to regain Nasdaq compliance by reconstituting its board and implementing the reverse stock split. Although she did not discuss privatization plans in detail, a September SEC filing reaffirmed her commitment to pursue this path without considering third-party acquisition offers.

 

23andMe CEO Anne Wojcicki Proposes to Take Company Private as Stock Plummets

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Anne Wojcicki, CEO of 23andMe, has submitted a proposal to take the genetic testing company private, as its stock price remains below $1. In a filing with the U.S. Securities and Exchange Commission on Wednesday, Wojcicki offered to buy all outstanding shares of 23andMe’s common stock for 40 cents per share in cash. This proposed price represents an 11% premium to the company’s closing stock price in April.

Wojcicki, who co-founded 23andMe in 2006, initially expressed interest in acquiring the company in April, stating that she would not support any alternative transaction. She aims to complete the transaction “as promptly as possible,” according to the filing. On Wednesday, shares of 23andMe closed at 40 cents.

23andMe, known for its at-home DNA testing kits that provide customers with insights into their ancestry and genetic profiles, went public in 2021 through a merger with a special purpose acquisition company (SPAC), valuing it at approximately $3.5 billion. However, the company has struggled to maintain steady revenue, as customers only need to use its DNA testing product once. Since its public debut, the stock has declined by over 95%.

Wojcicki believes that taking 23andMe private will better equip the company to focus on its long-term mission without the short-term pressures of the public markets. In November, the company received a deficiency letter from the Nasdaq Listing Qualifications Department, giving it 180 days to bring its share price back above $1. In response, 23andMe’s board formed a “Special Committee” in late March to explore options to improve the stock price.

The Special Committee will need to approve or reject Wojcicki’s proposal to take the company private.