Dive Brief:
- 23andMe said Tuesday it is exploring strategic alternatives such as the sale of the company, a business combination or restructuring.
- The genetic testing company ended 2024 with $79.4 million and told investors it will need to raise money to fund its operations and financial commitments.
- CEO Anne Wojcicki tried to take the company private last year but the board rejected the proposal. The independent board directors later resigned, citing differences with Wojcicki on 23andMe’s future. The company also recently laid off more than 200 people in a restructuring that ended the development of its therapeutics division and all therapeutics programs.
Dive Insight:
23andMe made its name, and built a database of genetic information, by selling consumer DNA tests. The tests provided customers with information on their ancestry and health traits and allowed 23andMe to look at links between genetics and human disease.
The Food and Drug Administration sent a warning letter in 2013 related to health claims in 23andMe’s DNA tests, but the company received de novo authorization in 2017 for 10 genetic health risk tests. 23andMe was valued at $3.5 billion when it went public in 2021.
23andMe had a market cap of nearly $92 million as of Wednesday, according to Yahoo Finance. Shares of the company have fallen from $14.86 one year ago to about $3.39 today as concerns about the financial sustainability of the business have intensified.
23andMe’s accumulated deficit stood at $2.3 billion at the end of September. At that time, the company warned it lacked the money to fund operations for 12 months. 23andMe’s cash reserves fell by around $47 million over the following three months, causing its holdings to dip below $80 million by the end of the year.
The company’s cash fell despite it recognizing $19.3 million of research services revenue as part of its deal with the drugmaker GSK. The cash “represents substantially all remaining revenue” associated with the GSK deal, 23andMe said. Consumer services revenue fell 8% year on year.
With cash running out, the board has begun looking for deals. 23andMe’s repository of genetic data has proven attractive to drug developers in the past, leading GSK to invest $300 million in 2018. The company’s Nasdaq listing could also be of interest to businesses that want to join public markets via reverse mergers rather than initial public offerings.
